Torrez v. Edwards

107 P.3d 1110, 2004 Colo. App. LEXIS 2304, 2004 WL 2903505
CourtColorado Court of Appeals
DecidedDecember 16, 2004
Docket04CA0293
StatusPublished
Cited by7 cases

This text of 107 P.3d 1110 (Torrez v. Edwards) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Torrez v. Edwards, 107 P.3d 1110, 2004 Colo. App. LEXIS 2304, 2004 WL 2903505 (Colo. Ct. App. 2004).

Opinion

Opinion by

Judge RUSSEL.

Plaintiff, Vonne Torrez, appeals the trial court’s judgment in favor of defendants, Earl Edwards and Clifford E. Eley. We affirm.

Plaintiff hired Edwards as her attorney for the purpose of objecting to the discharge of a debt owed to plaintiff by a petitioner in a bankruptcy proceeding. Plaintiff alleged that Edwards failed to represent her properly and asserted claims against him for negligence, breach of contract, and outrageous conduct.

Plaintiff alleged that Eley had negligently carried out his duties as trustee in the bankruptcy action. She asserted claims against him for negligence and outrageous conduct.

Eley filed a motion to dismiss raising a statute of limitations defense. Edwards filed an answer in which he denied liability and asserted that the applicable statute of limitations had expired.

In response to Eley’s motion, plaintiff asserted, for the first time, that her claims were based in fraud and that a three-year limitations period should apply. She filed a motion seeking to amend her complaint.

The trial court denied plaintiffs request to amend her complaint and dismissed the ac *1112 tion with prejudice as to both defendants. The court ruled that plaintiffs action was barred by the statute of limitations.

Plaintiff then filed this appeal.

I. Dismissal as to Eley

After filing his answer brief, Eley moved to dismiss plaintiffs appeal as to him. He argued that the trial court lacked jurisdiction under the “Barton doctrine.” And he argued that, because the trial court lacked jurisdiction, we lack jurisdiction over the appeal.

Although Eley failed to raise this argument in the trial court, we will consider it because it implicates subject matter jurisdiction. See Colo. Dep’t of Pub. Health & Env’t v. Caulk, 969 P.2d 804, 807 (Colo.App.1998).

A. Barton Rule

In Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672 (1881), the plaintiff was injured while riding as a railway passenger. She sued the defendant, who was the receiver of the railroad property, for negligence. Applying common law, the Court held that the trial court lacked jurisdiction because the plaintiff had failed to obtain leave of the court that had appointed the defendant as the receiver.

Following Barton, federal courts developed a similar rule for suits against bankruptcy trustees. Carter v. Rodgers, 220 F.3d 1249, 1252 (11th Cir.2000). This development reflected the fact that “[t]he trustee in bankruptcy is a statutory successor to the equity receiver.” In re Linton, 136 F.3d 544, 545 (7th Cir.1998).

Thus, in the bankruptcy context, the general rule is that “leave of the appointing forum must be obtained by any party wishing to institute an action in a non-appointing forum against a trustee, for acts done in the trustee’s official capacity and within the trustee’s authority as an officer of the court.” In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir.1993); 7 Lawrence P. King, Collier on Bankruptcy ¶ 721.05[1] (15th ed.1987).

This rule is a well-established feature of federal common law. See Carter v. Rodgers, supra, 220 F.3d at 1252; In re Linton, supra, 136 F.3d at 545. It is also reflected, although not expressly stated, in a federal statute that codifies an exception, not applicable here, to the general rule. See § 28 U.S.C. 959(a); In re Linton, supra, 136 F.3d at 545 (the statute “assumes” the general requirement).

B. Jurisdictional Rule

When a bankruptcy proceeding is filed in federal court, that court has “exclusive jurisdiction of all of the property, wherever located, of the debtor as of the commencement of such case, and of property of the estate.” 28 U.S.C. § 1334(e). If brought without permission, suits against the bankruptcy trustee would undermine the integrity of this exclusive jurisdiction:

If debtors, creditors, defendants in adversary proceedings, and other parties to a bankruptcy proceeding could sue the trustee in state court for damages arising out of the conduct of the proceeding, that court would have the practical power to turn bankruptcy losers into bankruptcy winners, and vice versa. A creditor who had gotten nothing in the bankruptcy proceeding might sue the trustee for negligence in failing to maximize the assets available to creditors, or to the particular creditor. A debtor who had failed to obtain a discharge might through a suit against the trustee obtain the funds necessary to pay the debt that had not been discharged.

In re Linton, supra, 136 F.3d at 546.

For this reason, when an action is brought in violation of the Barton rule, the trial court lacks subject matter jurisdiction. This is true for claims brought in state court, see Lurie v. Blackwell, 285 Mont. 404, 948 P.2d 1161, 1164 (1997), as well as in the wrong federal court. See Muratore v. Darr, 375 F.3d 140, 148 (1st Cir.2004); Carter v. Rodgers, supra, 220 F.3d at 1253; In re Kashani, 190 B.R. 875, 884 (B.A.P. 9th Cir.1995). It is true even after the bankruptcy proceedings have concluded. See Muratore v. Darr, supra, 375 F.3d at 147 (citing In re Linton, supra, 136 F.3d at 545-46).

C. Application Here

It is undisputed that plaintiff failed to obtain permission from the bankruptcy court before bringing this action. And plaintiffs allegation — -that Eley was negligent in dis *1113 charging his duties as bankruptcy trustee— clearly is brought against Eley in his official capacity. See Lurie v. Blackwell, supra, 948 P.2d at 1163 (suit was against trustee in his official capacity where the conduct complained of occurred while defendant was performing his official duties as trustee). We therefore conclude that the district court lacked subject matter jurisdiction to adjudicate plaintiffs claims against Eley. See Muratore v. Darr, supra; Lurie v. Blackwell, supra.

It does not follow, however, that we are required to dismiss plaintiffs appeal.

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Bluebook (online)
107 P.3d 1110, 2004 Colo. App. LEXIS 2304, 2004 WL 2903505, Counsel Stack Legal Research, https://law.counselstack.com/opinion/torrez-v-edwards-coloctapp-2004.