D'Angelo v. McKean (In re McKean), CASE NO. 11-23743
Decision Date | 15 January 2014 |
Docket Number | ADV. NO. 12-6018,CASE NO. 11-23743 |
Parties | In Re: WILLIAM MCKEAN and MARIANNE MCKEAN, DEBTORS. KAREN D'ANGELO, as Executrix of the Estate of Verona A. McKean, deceased, PLAINTIFF, v. WILLIAM MCKEAN and MARIANNE MCKEAN, DEFENDANTS. |
Court | U.S. Bankruptcy Court — District of Kansas |
____________________
Dale L. Somers
United States Bankruptcy Judge
Opinion designated for on-line use but not print publication.
In this adversary proceeding, the Plaintiff, the Executrix of the Estate of Verona A. McKean, seeks an order excepting from discharge a state court judgment entered in her favor against Defendant William McKean and a ruling denying discharge to Defendants William McKean and Marianne McKean (collectively Debtors). Debtors move to dismiss under Federal Rule of Bankruptcy Procedure 7025, substitution of parties. They contend that the rule requires dismissal because Plaintiff failed, after the Debtors' filing of a statement noting the death of Karen D'Angelo, to timely substitute Brian D'Angelo, the successor representative of the Estate of Verona A. McKean, as Plaintiff.1 The Plaintiff opposes the motion.2 The Court has jurisdiction.3
The relevant facts are undisputed. Debtors filed for relief under Chapter 7 on December 7, 2011. This nondischargeability action was filed on March 2, 2012, by Karen D'Angelo, as Executrix of the Estate of Verona A. McKean. Karen D'Angelo died on March 10, 2012. On April 25, 2012, Debtors filed a pleading entitled Suggestions ofDeath upon the Record (Suggestions of Death)4 which states that it was served upon counsel for the Plaintiff via United States mail and by email through the Bankruptcy Courts's ECF/CM notification system. It recites the foregoing events in this case and concludes with the statement,
On May 10, 2012, Joseph A. D'Angelo, who was appointed administrator of the estate of Karen A. D'Angelo, on a date not revealed in the record, filed a petition in the state court proceedings for probate of the Estate of Verona A. McKean for the appointment of an administrator C.T.A.5 The petition suggests that Brian J. D'Angelo, who is the son of Karen A. D'Angelo and the grandson of Verona McKean, was a suitable person to be granted the letters of administration. Although the record does not include a copy of an order appointing Brian D'Angelo, the Court assumes that such appointment was made, since the caption of some pleadings in this case identify the Plaintiff as "The Estate of Verona A. McKean through Brian D'Angelo as SubstituteRepresentative."6 However, no motion to substitute Brian D'Angelo as Plaintiff has been filed.
Debtors filed the Motion to Dismiss Pursuant to Fed. R. Civ. P. 25(a)(1) on September 6, 2013.
Bankruptcy Rule 7025 provides that Federal Rule of Civil Procedure 25 (Rule 25) applies in adversary proceedings. Rule 25 provides in relevant part:
Rule 25. Substitution of Parties.
(a) Death.
Rule 25 does not prohibit a defendant from filing a suggestion of death of the plaintiff. "In practice, it is not unusual for a defendant to suggest death upon the record to impose upon the plaintiff's side the obligation to move for substitution of a party, as a tactical maneuver of an adversary premised upon expediting the action or getting it dismissed."7
In this case, Debtors contend that this dischargeability proceeding must be dismissed under Rule 25(a)(1)because a motion for substitution of the present representative of the Estate of Verona McKean was not made within 90 days of the service of the statement noting the death of Karen D'Angelo.8 Plaintiff opposes the motion on three grounds: (1) that substitution is not necessary because no new party arises when there is a substitute representative of an estate; (2) that the 90-day period in which to substitute parties did not run because the Suggestion of Death was not properly served; and (3) that Debtors have waived their right to object to a motion to substitute or to request dismissal. The Court will address each of these objections to the motion to dismiss.
The Plaintiff's first defense is that Rule 25(a) is not applicable. The argument is based upon Rule 25(c), which provides that substitution is not mandatory if an interest is transferred. According to Plaintiff, the true plaintiff is the estate of Verona A. McKean, the estate did not die, and the interest in pursuing the litigation merely transferred from Karen D'Angelo to Brian D'Angelo, the substitute representative of the estate. This argument dissolves upon close scrutiny. Subsection (c) of Rule 25 applies to the transfer of an interest, such as by assignment and corporate merger.9 Here there was no transfer of an interest; after the death of the executrix, the estate remained the entity which would benefit from success in this action. But until the appointment of a successor fiduciary for the estate, there was no individual entitled to pursue the litigation on behalf of the estate. The cases cited by the Debtors are distinguishable. Unlike In re Aredia & Zometa Products Liab. Litig.,10 cited by Debtors, this is not a case where only the title of the individual party to the litigation changed; here the party died. In addition, this case is different from Estate of Rains v. Fed. Deposit Ins. Co.,11 also relied upon by Debtors, where the FDIC sought to recover against an individual on a note and upon the individual's death the estate, not the administrator of the estate, was substituted as thedefendant based upon Kansas law. Here the personal representative is the Plaintiff, asserting dischargeability claims on behalf of the Estate of Verona A. McKean.
The Supreme Court of Delaware has rejected an argument similar to the Debtors', that Rule 25(a) does not apply to the death of the administrator of an estate because the Rule governs substitution of parties on death of an individual party and not on death of a representative party. It stated, 12 This Court agrees with the reasoning of the Delaware Court and holds that Rule 25(a) applies upon the death of a personal representative who is a plaintiff in a dischargeability proceeding.
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