Pruitt v. Hancock Medical Ctr.
| Docket Number: | 2005-CA-00132-SCT | |
| Oral Argument: | 09-13-2006 | |
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| Supreme Court: | Opinion Link Opinion Date: 11-16-2006 Opinion Author: RANDOLPH, J. Holding: AFFIRMED |
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| Additional Case Information: |
Topic: Medical malpractice - Property of bankruptcy estate - Standing to assert claim - 11 U.S.C. § 541(a)(1) Judge(s) Concurring: SMITH, C.J., WALLER AND COBB, P.JJ., EASLEY, CARLSON AND DICKINSON, JJ. Dissenting Author : GRAVES, J., Without Separate Written Opinion Concurs in Result Only: DIAZ, J. Procedural History: Dismissal Nature of the Case: CIVIL - MEDICAL MALPRACTICE |
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| Trial Court: |
Date of Trial Judgment: 07-15-2004 Appealed from: Hancock County Circuit Court Judge: Stephen Simpson Disposition: Granted Appellee's Motion to Dismiss without prejudice Case Number: 03-0289 |
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| Party Name: | Attorney Name: | |||
| Appellant: | CHARLES PRUITT AND CATHERINE ELIZABETH
PRUITT |
JENNIFER P. BURKES |
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| Appellee: | HANCOCK MEDICAL CENTER | PATRICK W. KIRBY |
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| Topic: | Medical malpractice - Property of bankruptcy estate - Standing to assert claim - 11 U.S.C. § 541(a)(1) |
| Summary of the Facts: | Charles and Catherine Pruitt filed a complaint alleging that on April 9, 2002, Charles suffered third-degree burns during knee surgery at Hancock Medical Center. However, their Notice of Claim letter alleges the injury occurred on April 11, 2002, and the nature of the injury was discovered the following day, April 12, 2002. On August 21, 2002, the Pruitts filed a voluntary petition for Chapter 7 bankruptcy. In their “Schedule B - Personal Property,” the Pruitts made no reference to any alleged cause of action or claim against HMC. However, HMC was listed under “Schedule F - Creditors Holding Unsecured Nonpriority Claims” for “hospital services” totaling $7,456.18. Thirty-three days after the bankruptcy court granted the Pruitts a discharge of debt and closed the bankruptcy estate, the Pruitts sent a “Notice of Claim” letter to HMC. Following denial of their claim, the Pruitts filed a complaint against HMC. HMC was granted a stay of proceedings due to the insolvency of its insurer. HMC filed a motion for summary judgment. The bankruptcy court entered an order reopening the Pruitts’ bankruptcy estate and allowing amendment to “Schedule B - Personal Property.” The Pruitts filed their amended “Schedule B - Personal Property” listing “Charles Pruitt and Catherine Elizabeth Pruitt vs. Hancock Medical Center and John Doe Defendants, A-D; Hancock County Circuit Court, Civil Action No. 03-0289 … .” At the March 19, 2004 motion hearing, both parties agreed that “if this motion were granted to dismiss … the bankruptcy trustee on an amended petition of this contingent asset would be … time barred, from prosecuting this claim.” Four months later, the trustee had not made an appearance, and the circuit court granted HMC’s motion to dismiss and dismissed the action without prejudice. The Pruitts appeal. |
| Summary of Opinion Analysis: | The Pruitts argue that at the time the complaint was originally filed, there was no bankruptcy estate and there was no trustee. As such, they argue that they had standing to assert their claim because they were the only parties who had any existent actionable interest in this proceeding at that time. The filing of a bankruptcy petition creates a bankruptcy estate. Under 11 U.S.C. § 541(a)(1), the bankruptcy estate includes all legal or equitable interests of the debtor in property as of the commencement of the case. Causes of action need not be formally filed prior to the commencement of a bankruptcy estate to become property of the bankruptcy estate. Here, the cause of action existed at the time of filing the bankruptcy petition. Therefore, the cause of action became property of the bankruptcy estate under 11 U.S.C. § 541(a)(1). If a cause of action belongs to the bankruptcy estate, then the trustee has exclusive standing to assert the claim. Such “exclusive standing” exists even when the cause of action was not disclosed on the schedules of assets filed under Chapter 7. Thus, the cause of action at issue, even though originally unscheduled, remains the property of the bankruptcy estate. Accordingly, the circuit court correctly determined that the Pruitts lack standing to assert the claim. |
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