FILED
DEC 12 2022
NOT FOR PUBLICATION
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: BAP No. NC-22-1115-SGB
THEOS FEDRO HOLDINGS, LLC,
Debtor. Bk. No. 21-30202
MALINKA TACUMA WADE MOYE,
Appellant, Adv. No. 22-03001
v.
PENDER CAPITAL, INC.; PENDER MEMORANDUM*
CAPITAL ASSET LENDING FUND, I,
LP; LABOR COMMISSIONER OF THE
STATE OF CALIFORNIA,
Appellees.
Appeal from the United States Bankruptcy Court
for the Northern District of California
Dennis Montali, Bankruptcy Judge, Presiding
Before: SPRAKER, GAN, and BRAND, Bankruptcy Judges.
INTRODUCTION
Malinka Tacuma Wade Moye appeals from an order granting the
motions to dismiss his adversary proceeding against defendants Pender
Capital, Inc., Pender Capital Asset Lending, Fund 1, LP, (jointly, “Pender
*
This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
Capital”), and the Labor Commissioner for the State of California. Moye’s
complaint failed to state any cognizable claim for relief. Accordingly, we
AFFIRM.
FACTS
In January 2022, Moye commenced his adversary proceeding in the
chapter 11 1 bankruptcy of debtor Theos Fedro Holdings, LLC. His
complaint is factually incomprehensible. It alleges that the debtor is a
limited liability company with its principal place of business in San
Francisco, while defendant Pender Capital is a “loan lending company” in
Sacramento. Moye stated that he was a creditor “violated by defendants.,
with principal place of business in Sf & Sacramen, California under
extortion. Assault. Attempted murder.” Moye also states that “Labor
Commissioner attorneys have prior record of obstructing creditor.” The
complaint includes numerous other statements and allegations of crimes by
others dating back years.
The relationship of any of these defendants to the debtor and its
bankruptcy is unclear. His caption identifies as defendants Pender Capital,
Labor Commissioner for the State of California, and Craft & Layne. There
are scattered references in the five-page complaint to Pender Capital but no
1
Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.
2
mention of it in the prayer for relief. Craft & Layne is not mentioned in the
complaint except its name was handwritten onto the caption as a
defendant. 2 There are roughly three references to the Labor Commissioner
but no explanation of what the Labor Commissioner allegedly did to harm
Moye, or how it relates to the underlying bankruptcy.
Moye alleged in his prayer for relief that the debtor “transferred &
removed funds from United States of America to Greece, or permitted
transfer & removal, of property of estate with the intent to delay, hinder, or
defraud a creditor in violation of provisions of 11 USC 727(a)(2)(b) . . . .”
Moye also references an alleged violation of § 727(a)(2)(A) in the title of his
complaint and in passing within the body of the complaint. There are
similar references to fraudulent transfers allegedly involving the debtor, its
managing member Philip Achilles, and Pender Capital. At one point, Moye
states: “2020: Pender Capital knowingly loan $3,000,000 unto Phillip
[sic]Achilles who previously changed title on 819 Ellis St SF, ca 94109
[“Ellis Property”] to deter transfer unto creditor [Moye] filed claim in lower
and northern district courts.”
This is the closest Moye gets to stating a coherent claim for relief that
might have some link to debtor or its bankruptcy. There are no additional
factual allegations stated to support Moye’s barebones accusations. There
are only the above-referenced conclusory statements. The remainder of the
2
No entity known as Craft & Layne participated in the underlying adversary
proceeding. Nor was Craft & Layne named as a party to this appeal.
3
complaint is a mélange of seemingly unconnected complaints and
grievances against a host of third parties. Many of these same matters are
referenced in the litigation he has unsuccessfully pursued in the state
courts and in the federal district court. See In Re Moye, Case No. C-14-2533
EMC (PR), 2014 WL 3750055, at *1-2 (N.D. Cal. July 28, 2014).
Both Pender Capital and the Labor Commissioner moved to dismiss
the adversary proceeding with prejudice. Both pointed out the defects in
the complaint described above. The Labor Commissioner further pointed
out that the bankruptcy court would lack jurisdiction over many of the
grievances Moye attempted to raise because they appeared wholly
unconnected to debtor’s bankruptcy case. Similarly, Pender Capital noted
that most of the matters referenced in Moye’s complaint concerned alleged
criminal conduct under California law that appears to have occurred years
ago with no connection to debtor’s bankruptcy. Moye responded to the
dismissal motions. But his response was largely incoherent. To the extent
any sense can be made of it, it fails to address the critical issues raised in
the motions to dismiss.
On May 24, 2022, the bankruptcy court entered an order granting the
defendants’ motions to dismiss for the reasons they stated. The bankruptcy
court additionally observed: “Plaintiff cannot obtain relief from this court
regarding criminal law matters or disputes in other state judicial or
administrative proceedings. What limited relief he might be entitled to
under the bankruptcy laws [does] not reach the moving parties or any
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other named defendant.” Moye timely appealed. 3
JURISDICTION
The bankruptcy court has jurisdiction over Moye’s § 727 claim
pursuant to 28 U.S.C. §§ 1334 and 157(b)(2)(J). We have jurisdiction under
28 U.S.C. § 158.
ISSUE
Did the bankruptcy court commit reversible error when it dismissed
Moye’s complaint without leave to amend?
STANDARD OF REVIEW
We review de novo the bankruptcy court’s order granting the
defendants’ Civil Rule 12(b)(6) motions. Barnes v. Belice (In re Belice), 461
B.R. 564, 572 (9th Cir. BAP 2011). De novo review means we give no
deference to the bankruptcy court’s decision. Francis v. Wallace (In re
Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014).
DISCUSSION
A. Civil Rule 12(b)(6) standards.
When we review an order granting a Civil Rule 12(b)(6) motion,
made applicable in adversary proceedings by Rule 7012, we consider the
legal sufficiency of the plaintiff’s complaint. See Johnson v. Riverside
Healthcare Sys., LP, 534 F.3d 1116, 1121–22 (9th Cir. 2008). This means that
3 After the appeal was submitted on the briefs, Moye filed a document with two
attachments from the California Department of Real Estate. This document was not part
of the record before the bankruptcy court and shall not be considered on appeal. Castro
v. Terhune, 712 F.3d 1304, 1316 n.5 (9th Cir. 2013).
5
we must assess whether the complaint presents a cognizable legal theory
and whether it contains sufficient factual allegations to support that theory.
Id. Thus, “for a complaint to survive a motion to dismiss, the non-
conclusory ‘factual content,’ and reasonable inferences from that content,
must be plausibly suggestive of a claim entitling the plaintiff to relief.”
Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citing Ashcroft v.
Iqbal, 556 U.S. 662, 677-78 (2009)).
A claim is facially plausible when it contains factual allegations that,
if taken as true, would allow the court to reasonably infer that the
defendant is liable to the plaintiff. Iqbal, 556 U.S. at 678. “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. Additionally, we do not accept as true mere
legal conclusions; they cannot by themselves establish a plausible claim for
relief. Id.
Determining whether a claim for relief is plausible is “a context-
specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id. at 679. Plausibility “asks for more than
a sheer possibility that a defendant has acted unlawfully.” Id. at 678. If a
complaint contains factual allegations “that are merely consistent with a
defendant’s liability, it stops short of the line between possibility and
plausibility of entitlement to relief.” Id. (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 557 (2007)) (internal quotation marks omitted).
In considering the defendants’ motions to dismiss, the court can take
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into account matters subject to judicial notice, including the other papers
filed in the adversary proceeding and the underlying bankruptcy case. See
Est. of Blue v. Cnty. of Los Angeles, 120 F.3d 982, 984 (9th Cir. 1997); Barron v.
Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).
B. The bankruptcy court did not err in concluding that Moye failed to
state a claim.
Moye’s appeal brief reads similarly to the adversary complaint he
filed in the bankruptcy court; it is impossible to follow. Having reviewed
his complaint and his appeal brief, we agree that the complaint fails to state
any legally cognizable claims for relief. Most of the matters referenced in
the complaint are alleged to have happened long ago. Many of these
matters were the subject of Moye’s unsuccessful litigation in the state court
and in the federal district court—litigation claims he restated so often that
both the state court and the federal district court declared him a vexatious
litigant.
The complaint designated a single cause of action stating that
“defendant’s debts are not dischargeable Pursuant to 11 USC. 727(a)(b)(2)
[sic],” and the “Uniform Fraudulent Transfer Act.” Notably, any challenge
to the debtor’s discharge needed to be directed against the debtor. But
Moye failed to name the debtor as a defendant. Moye cannot state a viable
objection to discharge claim against the named defendants because they are
not the debtor. Only the debtor in a bankruptcy case is potentially subject
7
to the Bankruptcy Code’s discharge provisions. See §§ 727(a), 1141(d).4
Moye also references a fraudulent transfer claim against Pender
Capital. The only factual reference to Pender Capital is that it loaned debtor
several million dollars and received in exchange a note and security
interest in the Ellis Property. This does not state a legally viable fraudulent
transfer claim. In the parlance of Iqbal, Moye’s allegations against Pender
Capital are “threadbare” and “conclusory.” They are not entitled to any
presumption of truth even in the context of a motion to dismiss under Civil
Rule 12(b)(6). See Iqbal, 556 U.S. at 678. These allegations come nowhere
close to permitting the bankruptcy court to infer that Moye plausibly might
be entitled to any relief from Pender Capital. Twombly, 550 U.S. at 557.
Equally significant, it is the bankruptcy estate, not individual
creditors, that have standing to pursue the debtor’s fraudulent transfer
claims. Est. of Spirtos v. One San Bernardino Cnty. Super. Ct. Case Numbered
SPR 02211, 443 F.3d 1172, 1176 (9th Cir. 2006). In chapter 11 cases, it is the
debtor-in-possession, or the chapter 11 trustee in this instance, that has
standing to bring fraudulent transfer claims, unless other parties have been
granted derivative standing to pursue such claims. See Liberty Mut. Ins. Co.
4
Moye references § 727 in his complaint. Section 727 governs the denial of
discharge in chapter 7 cases. The debtor remains in chapter 11, where discharge is
governed by § 1141. The discharge of an entity such as the debtor is specifically
controlled by § 1141(d)(3). See generally 8 Collier on Bankruptcy at 1141.05[4] (16th ed.
2022). Moye’s complaint did not reference § 1141 or the requirements to deny a
discharge to an entity under § 1141(d)(3).
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v. Off. Unsecured Creditors' Comm. of Spaulding Composites Co. (In re
Spaulding Composites Co.), 207 B.R. 899, 903 (9th Cir. BAP 1997) (citing
Hansen v. Finn (In re Curry & Sorensen, Inc.), 57 B.R. 824, 827–29 (9th Cir.
BAP 1986)). Nothing in the record, Moye’s complaint, or his appeal brief
indicates that Moye obtained, or is capable of obtaining, the bankruptcy
court’s authorization to pursue any fraudulent transfer claims on behalf of
the debtor’s bankruptcy estate. Thus, as a matter of law, Moye lacked
standing to assert a claim for fraudulent transfer.
C. Denial of leave to amend.
Under Civil Rule 15, made applicable in adversary proceedings by
Rule 7015, “[i]n dismissing for failure to state a claim, a [bankruptcy] court
should grant leave to amend even if no request to amend the pleading was
made, unless it determines that the pleading could not possibly be cured
by the allegation of other facts.” Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th
Cir. 2016) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). A
bankruptcy court generally must grant leave to amend “unless it
determines that the pleading could not possibly be cured by the allegation
of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). This is
true even if leave to amend was not requested. Id. at 1127; Cook, Perkiss and
Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990).
Dismissal of a complaint without leave to amend is proper if
amendment would be futile. Intri-Plex Techs., Inc. v. Crest Grp., Inc., 499 F.3d
1048, 1056 (9th Cir. 2007) (citing Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d
9
1149, 1160 (9th Cir. 1989)); Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th
Cir. 1990). Amendment is considered futile when allegation of other facts
consistent with the existing pleading could not cure the deficiency. See
Garmon v. Cnty. of Los Angeles, 828 F.3d 837, 846 (9th Cir. 2016) (citing
Reddy, 912 F.2d at 296–97); Schreiber Distrib. Co. v. Serv–Well Furniture Co.,
Inc., 806 F.2d 1393, 1401 (9th Cir. 1986).
Here, Moye never sought leave to amend, nor has he raised this issue
on appeal. Arguably, he has forfeited this argument by not raising it on
appeal. See Okwu v. McKim, 682 F.3d 841, 846 n.4 (9th Cir. 2012) (“Okwu
has waived the argument that she should be allowed to amend her
complaint to re-style some of her § 1983 claims . . . under the Ex Parte
Young exception . . . . She did not make that argument to the district court
or in either of her briefs on appeal.” (citations omitted and emphasis
added)); quoted with approval in City of San Juan Capistrano v. Cal. Pub. Utils.
Comm'n, 937 F.3d 1278, 1282 (9th Cir. 2019).
But even if we were to consider the issue on appeal, Moye cannot
allege any set of facts to support a nondischargeability claim against
defendants who are not debtors in the underlying bankruptcy case. Nor
can we conceive of any set of alleged facts consistent with Moye’s existing
complaint that would justify the bankruptcy court granting him authority
to act as the estate’s representative in pursuing any fraudulent transfer
claims. The remainder of Moye’s grievances, including those intimating at
criminal conduct of others and raising prior nonbankruptcy proceedings,
10
have nothing to do with the debtor’s bankruptcy or with claims within the
jurisdiction of the bankruptcy court. We, therefore, agree with the
bankruptcy court that dismissal with prejudice was warranted as granting
leave to amend would have been futile.
CONCLUSION
For the reasons set forth above, we AFFIRM the bankruptcy court’s
dismissal with prejudice of Moye’s adversary proceeding.
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