Asmus v. Capital Region Family Practice

• Decision Date: 30 September 2003
• Docket Number: No. WD 61912.,WD 61912.
• Parties: Richard ASMUS, Appellant, v. CAPITAL REGION FAMILY PRACTICE, et al. Respondents.
• Court: Missouri Court of Appeals

115 S.W.3d 427

Richard ASMUS, Appellant, v. CAPITAL REGION FAMILY PRACTICE, et al. Respondents.

No. WD 61912.

Missouri Court of Appeals, Western District.

September 30, 2003.

James Mitchell Crabtree, Lenexa, KS, for Appellant.

William Jay Powell, Columbia, for Respondent McKnelley.

Albert J. Bronsky, Jr., St. Louis, for Respondent Prasad.

Charles J. McPheeters, Jefferson City, for Respondents Capital Region Family Practice-McCarty Clinic, Caywood, Rogers, Capital Region Family Physicians Clinic, and Capital Region Medical Center.

Before HAROLD L. LOWENSTEIN, P.J., JAMES M. SMART, JR., and EDWIN H. SMITH, JJ.

JAMES M. SMART, JR., Judge.

Richard Asmus appeals the trial court's dismissal of his medical malpractice claim against Capital Region Family Practice, et al., the denial of his motion to amend the petition to remedy its deficiency, and the denial of his motion to reconsider. For the reasons stated below, we reverse the judgment of the trial court.¹

Factual Background

In July of 1999, Plaintiff Richard Asmus brought a medical malpractice lawsuit against four physicians and two healthcare facilities (collectively "Defendants"). Plaintiff's petition alleged, in part, that he suffered a severe decubitus ulcer on his lower back and buttocks as a result of the Defendants' negligence while hospitalized in July of 1997.

Prior to filing his lawsuit, Plaintiff filed for voluntary bankruptcy under Chapter 7 in February of 1999. Plaintiff did not disclose on his schedule of assets that he had an unliquidated potential claim he intended to pursue against the health care providers.

Plaintiff's bankruptcy became final on May 14, 1999, when he received a complete discharge of his debts, which consisted almost entirely of medical expenses owed to a hospital that is not a party to this lawsuit. Shortly before Plaintiff was discharged in bankruptcy, the personal injury attorneys Plaintiff had engaged declined to represent him further as to his malpractice claim. Plaintiff then contacted different attorneys about representing him on this claim. The new attorneys, who continue to represent Plaintiff, were unaware that the unliquidated personal injury action was not listed and exempted from the bankruptcy estate.

This lawsuit was originally filed on July 21, 1999, just before the two-year limitations period was due to expire. In November of that year, Plaintiff dismissed the lawsuit without prejudice. He re-filed the lawsuit on November 9, 2000, taking advantage of Missouri's one-year savings statute.

In his answers to interrogatories, filed on March 13, 2001, Plaintiff acknowledged that he had been discharged in bankruptcy in 1999. At Plaintiff's deposition on November 6, 2001, Plaintiff acknowledged that while still in the hospital in 1997, he formed the belief that he may have a medical negligence claim. Thus, he agreed that he formed the intention to sue the hospital nearly two years before he filed for bankruptcy.

On January 16, 2002, three of the Defendants filed a motion to dismiss, contending that the Plaintiff lacked standing to bring the cause of action in that the cause of action properly belonged to the bankruptcy estate. Defendants maintained that the proper party to prosecute a personal injury claim owned by the estate is the bankruptcy trustee. A fourth Defendant filed for summary judgment on the same grounds in February, followed closely by the final Defendant's motion to dismiss for the same reason.

Shortly after the motions to dismiss were filed, Plaintiff moved to reopen his bankruptcy case in order to amend the schedules to include the unliquidated personal injury action and to have it exempted. Plaintiff also at that time moved the circuit court to amend the medical malpractice petition to add the bankruptcy trustee as a plaintiff. Plaintiff's motions were filed while the defendants' motions to dismiss were pending.

Plaintiff's bankruptcy estate was re-opened on April 17, 2002. Plaintiff filed amended schedules that listed this cause of action, and Plaintiff moved to exempt the claim as an unliquidated personal injury claim. In the meantime, while his motion to exempt the personal injury claim was still pending in bankruptcy court, on May 20, 2002, the trial court granted Defendants' motions, treating them all as motions to dismiss.² The court declined to rule on Plaintiff's motion to amend his pleadings, thereby denying the motion.

Eleven days later, on May 31, 2002, the bankruptcy trustee filed a notice of intended abandonment regarding the claim. Plaintiff then filed a motion to reconsider, attaching the trustee's notice of intended abandonment pointing out that the trustee intended to allow plaintiff to pursue the claim individually. The trial court denied the motion to reconsider, and this appeal follows.

The Proper Party

Plaintiff contends, in both his points on appeal, that the trial court erred in granting the Defendants' motions to dismiss. The judgment stated: "Before the Court are motions to dismiss ... all of which claim that Plaintiff, Richard Asmus, is not the proper party in interest or does not have the right to bring the current cause of action." The court did not explain why it granted the motions, but the reviewing court must presume that the decision was based on one of the reasons in the motion to dismiss. See Turner Eng'g, Inc. v. 149/155 Weldon Pkwy., L.L.C., 40 S.W.3d 406, 409 (Mo.App.2001). The reason for dismissal proffered by all the motions was that the Plaintiff lacked standing to prosecute the claim in that it belonged to the bankruptcy estate and only the bankruptcy trustee could prosecute the claim.

In reviewing the grant of a motion to dismiss, the pleadings are liberally construed and all facts are treated as true, construing the allegations favorably to the plaintiff. Burnside v. Gilliam Cemetery Ass'n, 96 S.W.3d 155, 156 (Mo.App.2003). Questions of law are reviewed de novo. Id.; Jordan v. Willens, 937 S.W.2d 291, 293 (Mo.App.1996). Whether a party has standing to bring a cause of action is a question of law. Kinder v. Holden, 92 S.W.3d 793, 803 (Mo.App.2002). Thus, an examination of the applicable law is in order.

When a debtor files a petition for bankruptcy, all of his property at that point in time, including all legal and equitable interests, become part of the bankruptcy estate. See 11 U.S.C. § 541(a); In re Brooks, 227 B.R. 891, 893 (Bankr.W.D.Mo.1998); Patrick v. Alphin, 825 S.W.2d 11, 13 (Mo.App.1992). This includes an unliquidated personal injury claim. See In re Mitchell, 73 B.R. 93, 94 (Bankr.E.D.Mo.1987). Thus, Plaintiff's unliquidated medical malpractice claim became a part of the bankruptcy estate.

After the estate is opened and a trustee is appointed, the trustee then has the capacity to sue and be sued. Brooks, 227 B.R. at 894; 11 U.S.C. § 701(a)(1); 11 U.S.C. § 323. Upon appointment of the trustee, the "debtor no longer has standing to pursue a cause of action which existed at the time the order for relief was entered." Brooks, 227 B.R. at 894. "[T]he trustee's right to sue on behalf of the estate is an exclusive right." Id. See also Earls v. King, 785 S.W.2d 741, 742 (Mo.App.1990); 8A C.J.S. Bankruptcy, §§ 27, 117 (1988).

The bankruptcy code lists exemptions the debtor may claim from property of the estate. Mitchell, 73 B.R. at 94. Under Missouri law, a debtor may claim any federal exemptions (other than those in 11 U.S.C. § 522(d)) and any exemptions allowed under state law. Id.; § 513.427, RSMo 2000. Section 513.427 allows an exemption for any property "that is exempt from attachment and execution." Because unliquidated personal injury actions, such as this medical malpractice claim, are not subject to attachment and execution prior to judgment and are not assignable, they can be (and generally are) exempted from the bankruptcy estate under Missouri law. Brooks, 227 B.R. at 894; Patrick, 825 S.W.2d at 13. The defendant-respondents agree in this case that the claim in question would qualify as an exempt claim.

To obtain the exemption, however, the debtor must list the property claimed as exempt on the proper schedule of assets.³ Brooks, 227 B.R. at 893-94. Until he does so and the asset is relinquished by the trustee, it remains the property of the estate. Id. at 894. The trustee owns the asset, and, as noted above, the debtor lacks standing to bring the cause of action in his own name. See Brooks, 227 B.R. at 894-95 (debtor lacked standing to bring a malpractice lawsuit after the appointment of the bankruptcy trustee where the claim had not been exempted from the estate prior to filing the lawsuit).

In this case, Plaintiff failed to include the unliquidated personal injury claim as an asset on the proper bankruptcy schedules. Plaintiff maintains that his bankruptcy attorney told him the claim did not need to be listed on the bankruptcy schedules. The claim, as noted above, was a part of the bankruptcy estate, although suit had not been filed. Because the asset was not listed as exempt, it remained the property of the estate, and the bankruptcy trustee had the exclusive right to pursue this claim on behalf of the estate prior to exemption. Thus, we agree that the Plaintiff was not the proper party to bring the cause of action in his own name.

Plaintiff also concedes that he was not the proper party plaintiff, but plaintiff argues that the matter does not end with that determination. Prior to ruling on the motions to dismiss, the court had before it Plaintiff's motion to amend his pleading to add the bankruptcy trustee as a plaintiff. This, according to plaintiff, should have entered into the court's consideration with regard to the motion to dismiss. We agree. Although plaintiff was not the proper party to bring the lawsuit in his own name, his motion to add the bankruptcy trustee would have cured the deficiency in his pleading. Plaintiff contends that the trial court erred in refusing to grant his motion to amend (1) be...