Cunningham v. J.P. Morgan Chase Bank (In Re Cunningham)
658 F. App'x 343
9th Cir.2016Background
- Chapter 7 debtor Reynaldo F. Marques sued in an adversary proceeding; bankruptcy court dismissed the complaint and denied leave to amend.
- Marques appealed to the district court, which affirmed the bankruptcy court’s orders; he then appealed to the Ninth Circuit pro se.
- Central legal question involved whether Marques had standing to pursue claims that accrued before his Chapter 7 petition.
- Bankruptcy trustee (by operation of law) holds causes of action that accrued prepetition as estate property unless abandoned or administered.
- Bankruptcy court denied reconsideration under Rule 59(e); Marques argued judicial bias and due process violations based on adverse rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to pursue prepetition causes of action | Marques contended he could pursue the claims himself | Claims that accrued prepetition are property of the estate and only the trustee may sue | Dismissed for lack of standing; claims vested in trustee |
| Leave to amend complaint | Amendment could cure defects and allow suit to proceed | Lack of standing is incurable; amendment would be futile | Denied; amendment would be futile |
| Motion for reconsideration (Rule 59(e)) | Challenged dismissal and sought relief from judgment | No basis shown under Rule 59(e) factors for relief | Denied; no grounds for reconsideration |
| Judicial bias / due process | Judge’s rulings reflected bias and violated due process | Adverse rulings alone do not establish bias | Rejected; rulings do not demonstrate legally cognizable bias |
Key Cases Cited
- Christensen v. Tucson Estates, Inc., 912 F.2d 1162 (9th Cir. 1990) (standard of review for district review of bankruptcy court decisions)
- Canatella v. Towers (In re Alcala), 918 F.2d 99 (9th Cir. 1990) (prepetition causes of action are property of the bankruptcy estate)
- Estate of Spirtos v. One San Bernardino Cty. Superior Court Numbered SPR 02211, 443 F.3d 1172 (9th Cir. 2006) (trustee has exclusive right to sue on behalf of the estate)
- Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522 (9th Cir. 2008) (courts may deny leave to amend when amendment would be futile)
- Zimmerman v. City of Oakland, 255 F.3d 734 (9th Cir. 2001) (factors for granting reconsideration under Rule 59(e))
- Liteky v. United States, 510 U.S. 540 (U.S. 1994) (judicial rulings alone almost never constitute valid basis for bias)
- Padgett v. Wright, 587 F.3d 983 (9th Cir. 2009) (court will not consider arguments not distinctly raised in opening brief)