In re Ring

138 F. App'x 834
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 29, 2005
DocketNo. 04-1222
StatusPublished
Cited by4 cases

This text of 138 F. App'x 834 (In re Ring) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Ring, 138 F. App'x 834 (7th Cir. 2005).

Opinion

ORDER

After Donna Ring filed for bankruptcy, the trustee proposed to settle a suit that she had pending in Wisconsin state court. Ring objected, but the bankruptcy court approved the settlement. The district court affirmed that decision, as do we.

In February 2002, Ring petitioned a Wisconsin court to award her a share of Ralph Wrezic’s estate; she claimed to be a nonmarital daughter mistakenly omitted from his will. See Wis. Stat. § 853.25(2). The court granted summary judgment for the estate and interested parties, including Wrezic’s widow, reasoning that Ring, who is over 50, had missed a statute of limitations requiring paternity suits to be [836]*836brought before the plaintiffs nineteenth birthday. See Wis. Stat. § 893.88. The court also concluded that Ring, who was pro se, had failed to meet her evidentiary burden because she never responded to the motion for summary judgment. Ring appealed to the Wisconsin Court of Appeals.

That appeal was still pending when Ring filed for bankruptcy in October 2002. Ring listed the state litigation on her Chapter 7 property schedules but valued it at zero. She objected, however, when the trustee sought approval to settle the matter for $12,000. After the settlement was proposed, she also amended her bankruptcy schedules to list the inheritance claim as exempt property, which she now valued at $7,374. Ring chose that amount because it was the remainder available to her under the “wild card” exemption of 11 U.S.C. § 522(d)(5).

Before approving the settlement in January 2003, the bankruptcy court heard testimony from the trustee, who characterized the inheritance claim as frivolous based on his understanding of the statute of limitations and his reading of the trial court’s decision and the pro se brief Ring had filed with the appellate court. Counsel for Wrezic’s widow testified, too, adding that at summary judgment Ring produced no evidence of paternity anyway. The court agreed with the trustee that the bankruptcy estate should not be squandered on “long shot” litigation, a conclusion shared by the district court when Ring appealed. Ring received a discharge in January 2003 immediately after the bankruptcy court approved the settlement. The state appeal, she says, is stayed pending the outcome of her appeal to this court.

Bankruptcy courts may approve a trustee’s proposal to compromise claims of the estate, including legal claims, see 28 U.S.C. § 157(b)(2); W.J. Servs. v. Commercial State Bank of El Campo, 990 F.2d 233, 234 (5th Cir.1993) (per curiam); In re Holy-well Corp., 913 F.2d 873, 881 (11th Cir.1990), subject to review by the district court and, in turn, this court, 28 U.S.C. § 158(a), (d); see In re Weinhoeft, 275 F.3d 604, 604 (7th Cir.2001). Ring argues, however, that the bankruptcy court lacked jurisdiction to approve the settlement due to the “probate exception” to federal jurisdiction and the Rooker-Feldman doctrine. The latter theory is groundless since Rooker-Feldman, see Rooker v. Fid. Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), precludes lower federal courts from reviewing state-court civil judgments, Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,—U.S.-, 125 S.Ct. 1517, 1521—22, 161 L.Ed.2d 454 (2005); Holt v. Lake County Bd. of Comm’rs, 408 F.3d 335, 336 (7th Cir.2005) (per curiam), which is not what the bankruptcy court did.

Nor is the probate exception relevant. That rule precludes a federal court from administering a decedent’s estate or probating a will, see Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946); Storm v. Storm, 328 F.3d 941, 943—44 (7th Cir.2003), or interfering with probate proceedings by contradicting a state court’s judgment, Golden ex rel. Golden v. Golden, 382 F.3d 348, 358—59 & n. 10 (3d Cir.2004). We have not decided whether the exception applies in bankrupt cy cases, although that question divides our sister circuits. Compare Goerg v. Parungao, 844 F.2d 1562, 1565 (11th Cir.1988) (explaining that probate exception applies only to diversity jurisdiction) with In re Marshall, 392 F.3d 1118, 1131—32 (9th Cir.2004) (applying exception to bankruptcy proceedings that resulted in conflicting state and federal judgments). And we need not answer the question here [837]*837because the exception has no possible relevance to this appeal. The bankruptcy court did not interfere with the probate matter; all the bankruptcy court did was decide that the inheritance claim belonged to the bankruptcy estate, and that the trustee’s proposed settlement was in that estate’s best interests.

Alternatively, Ring argues that her inheritance claim was not property of the bankruptcy estate. A debtor’s legal claims are presumptively part of the bankruptcy estate administered by the Chapter 7 trustee. In re Polis, 217 F.3d 899, 901 (7th Cir.2000); Cable v. Ivy Tech State Coll., 200 F.3d 467, 472—73 (7th Cir.1999); see Martin v. Monumental Life Ins. Co., 240 F.3d 223, 232 (3d Cir.2001) (right to appeal adverse judgment legal cause of action belonging to bankruptcy estate). Like other property, though, a legal claim may remain outside the estate if the debtor utilizes an available exemption, 11 U.S.C. § 522, or the claim may revert back to the debtor if the trustee chooses to abandon it as estate property, id. § 554. Ring insists that the trustee abandoned her inheritance claim by promising not to pursue it during a telephone conversation with her bankruptcy lawyer, but Ring waived this contention by not asserting it in the bankruptcy court, see In re Kroner,

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Related

In re Brown
484 B.R. 322 (E.D. Kentucky, 2012)
In re Ring
266 F. App'x 492 (Seventh Circuit, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
138 F. App'x 834, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ring-ca7-2005.