Trowbridge v. Fascio

718 So. 2d 1025, 98 La.App. 4 Cir. 1311, 1998 La. App. LEXIS 2619, 1998 WL 650779
CourtLouisiana Court of Appeal
DecidedSeptember 9, 1998
DocketNo. 98-C-1311
StatusPublished
Cited by3 cases

This text of 718 So. 2d 1025 (Trowbridge v. Fascio) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trowbridge v. Fascio, 718 So. 2d 1025, 98 La.App. 4 Cir. 1311, 1998 La. App. LEXIS 2619, 1998 WL 650779 (La. Ct. App. 1998).

Opinion

JiBYRNES, Judge.

Plaintiff purchased a car from a company other than defendant-relator. Within the month, plaintiff purchased a second car from relator allegedly because relator’s salesman represented that he would somehow cancel the promissory note on the first car. When the plaintiff applied for credit on the second car, he did not disclose the debt on the first car. The note was not cancelled, and the salesman allegedly converted the car for use on a personal vacation.1 Unable to make payments on both notes, the plaintiff filed for bankruptcy. In his Schedule of Assets, he did not disclose the existence of the cause of action he asserts in this case. On November 19, 1996, the bankruptcy judge discharged plaintiff of his debts, and relieved the bankruptcy trustee, Thomas Anderson. Sometime in early January 1997, plaintiff filed this suit asserting breach of contract, intentional misrepresentations, failure to properly supervise employees, conversion, unfair trade practices, and negligent hiring of employees. He sought damages for mental pain and suffering, damage to his credit, damages for having been forced into bankruptcy, and damages for repossession of the first car. The relator filed an |2exception of no right of action. At the hearing, the plaintiff produced a letter from the bankruptcy trustee stating that he abandoned the claim on any recovery that may be obtained in this ease. The trial court denied relator’s exception. Relator seeks this court’s supervisory jurisdiction to review that ruling. Relator argues that when the plaintiff filed for bankruptcy, [1027]*1027the claims became the property of the bankruptcy estate, that the plaintiffs failure to disclose the claim on his Schedule of Assets renders the claim incapable of being abandoned, and that the trustee had no authority to abandon the claim after the November 19, 1996 order relieving him of his duties. Relator.' concludes that the plaintiffs claims against relator are, therefore, still part of the bankrupt estate and that plaintiff has no right to pursue claims of the bankrupt estate.

The exception of no right of action questions whether plaintiff is the proper person to sue for his injuries. La.C.C.P. art. 927(A)(6); Keen v. Louisiana Farm Bureau Ins. Co., 583 So.2d 835 (La.App. 1 Cir.1991), writ denied 587 So.2d 699 (La.1991). The exception raises the issue of whether the plaintiff belongs to the particular class to which the law grants a remedy for the particular harm alleged by the plaintiff. Franks v. Royal Oldsmobile Co. Inc., 605 So.2d 633 (La.App. 5th Cir.1992).

A cause of action becomes the property of the bankruptcy estate upon the filing of the bankruptcy petition, even where the bankrupt claimant fails to list the cause of action in his Schedule of Assets. As stated in Davis v. Avco Finance, 158 B.R. 1000, 1002 (Bankr.N.D.Ind.1993):

The cause of action against defendants arose from an alleged pre-petition violation of the [Fair Debt Collection Practices Act]. Property of the estate encompasses “all legal and equitable interests of the debtor in property as of the commencement of the case”, 11 U.S.C. § 541(a)(1) (Callaghan, 1992-93), which includes causes of action. ... It is a debtor’s duty to file a schedule of assets existing at the time the petition for relief is filed. 11 U.S.C. sec. 521(1). Even though ^Debtors failed to list the cause of action as an asset, it nevertheless became property of the estate pursuant to Section 541(a)(1).

11 U.S.C. Sec. 554(d) provides that:

Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains the property of the estate.

On November 19, 1996 the bankruptcy court entered an order closing the bankruptcy estate and discharging the trustee. As of that date it is undisputed that plaintiffs claims against the relator had neither been administered nor abandoned by the bankruptcy trustee or the court. After that date we conclude that the trustee had no further authority to act in his official capacity. Consequently, any attempt by the said trustee to belatedly abandon assets of the bankrupt estate, including the claim asserted by the plaintiff herein against the relator, would be of no effect. Therefore, the two letters from the trustee dated subsequent to his discharge in which the trustee attempts to abandon plaintiffs claim against the relator are of no effect.2

In opposition to the relator’s writ application, the plaintiff contends that: “[T]he damages were not sustained until after the bankruptcy was filed.” Claims arising subsequent to the bankruptcy filing do not normally form part of the bankrupt estate. Plaintiff would retain the right to assert post-petition claims in his individual capacity. However, plaintiffs petition alleges that: “Because of defendants’ actions, petitioner was forced to have two car notes, and was subsequently forced to file bankruptcy.” Such damages allegedly sustained by the relator antedate the bankruptcy, and, in fact, allegedly caused the bankruptcy. ^Therefore, such claims would have been part of the bankrupt estate at its inception. Plaintiff is not the proper party to assert claims of the bankrupt estate unless those claims have been abandoned:

The law is abundantly clear that the burden is on the debtors to list the asset and/or amend their schedules, and that in order for property to be abandoned by operation of law pursuant to 11. U.S.C. [1028]*1028§ 554(c)3, the debtor must formally schedule the property pursuant to 11 U.S.C. § 521(1)4 before the close of the case.

Jeffrey v. Desmond, 70 F.3d 183, 186 (1 Cir.1995). Here, the cause of action was not scheduled, therefore could not be abandoned by operation of law, and was not abandoned by the trustee or by order of the court. Therefore, plaintiffs pre-petition claims remain property of the bankruptcy estate and he has no right to assert them.

Scarborough v. Duke, 532 So.2d 361 (La. App. 3 Cir.1988), the only case cited by the plaintiff in opposition to the writ application, deals with abandonment for non-prosecution under Louisiana law in Louisiana state courts, rather than ^abandonment of property by the trustee or the court in bankruptcy. Additionally, the cases cited by the Scarborough court indicate that the bankrupt is not the proper party to pursue a cause of action that belongs to the bankrupt estate. For example, in Jones v. Chrysler Credit Corp., 417 So.2d 425, 426 (La.App. 1 Cir.1982), writ denied 420 So.2d 456 (La.1982), cert. denied, 459 U.S. 1114, 103 S.Ct. 747, 74 L.Ed.2d 966 (1983); the court stated that:

Thus, all legal and equitable interests of the bankrupt in property vest in the trustee from the time the bankruptcy is filed. Thereafter, only the trustee can act to recover the assets of the bankrupt. It is the trustee, not the bankrupt, who has the legal capacity to sue upon a cause of action for damages arising prior to the filing of the petition in bankruptcy.

In Johnson v. Best Manufacturing Co., 263 So.2d 436, 439 (La.App.

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Bluebook (online)
718 So. 2d 1025, 98 La.App. 4 Cir. 1311, 1998 La. App. LEXIS 2619, 1998 WL 650779, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trowbridge-v-fascio-lactapp-1998.