United Technologies Corp. v. Gaines
| Decision Date | 05 March 1997 |
| Docket Number | No. A96A2544,A96A2544 |
| Parties | , 97 FCDR 1153 UNITED TECHNOLOGIES CORPORATION et al. v. GAINES. |
| Court | Georgia Court of Appeals |
Stuart, Irvin, Stanford & Kessler, A. McArthur Irvin, Gary R. Kessler, Atlanta, Arnall, Golden & Gregory, Jerome L. Kaplan, Ronald C. Thomason, Macon, for appellants.
Meacham & Earley, Christopher L. Meacham, Thomas M. Jones, Columbus, Page, Scrantom, Sprouse, Tucker & Ford, Mark R. Youmans, Columbus, Adams & Hemingway, Ward Stone, Jr., Macon, Carolyn E. Moller, Columbus, for appellee.
On April 16, 1992, Aurora Gaines filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Georgia. The bankruptcy case was converted to a Chapter 7 case and was closed after being resolved by an appointed trustee. On December 3, 1993, Gaines filed a personal tort action in the Superior Court of Muscogee County against United Technologies Corporation d/b/a Pratt & Whitney Division and two of its employees, Steven Hodge and Bobby Herring, for acts allegedly committed between May 1989 and February 1992. United and Herring moved to dismiss Gaines' complaint under OCGA § 9-11-17(a) arguing that Gaines was not the proper party to prosecute the claim because she had failed to schedule it in her bankruptcy petition as a potential asset, and thus, that the claim remained an asset of the bankruptcy estate even though the bankruptcy case had been closed.
In response to the motion to dismiss, Gaines requested time from the superior court to reopen her bankruptcy case. The superior court granted the request. Thereafter, Gaines caused her bankruptcy case to be reopened, and the bankruptcy court appointed Michael Cielinski as trustee of the estate. Subsequently, United and Herring moved the superior court to substitute Cielinski as the real party interest. The trial court denied the motion to substitute, and we granted United and Herring's application for interlocutory review. Upon review, we conclude that Cielinski is the real party in interest regarding the tort action, and thus that the superior court erred in denying the motion to substitute.
In this state, "[e]very action shall be prosecuted in the name of the real party in interest." OCGA § 9-11-17(a). To determine who that party is, one must look to the substantive law and determine who owns the claim and who has the right to pursue an action on the claim. See Rigdon v. Walker Sales, etc., 161 Ga.App. 459, 462, 288 S.E.2d 711 (1982). In this case, the substantive law at issue encompasses both federal bankruptcy and state law.
Under 11 U.S.C. § 541(a)(1) "all legal or equitable interests of [a] debtor in property as of the commencement of the [bankruptcy] case" becomes property of the bankruptcy estate. This includes causes of action, regardless of whether or not such actions are assignable or transferable by the debtor under state law. See 11 U.S.C. § 541(c)(1)(A); Integrated Solutions v. Service Support Specialties, 193 B.R. 722, 727-728(11) (D.N.J.1996). Therefore, by preemptive operation of federal law, when Gaines filed for bankruptcy the cause of action at issue became part of the bankruptcy estate even though OCGA § 44-12-24 normally prohibits the assignment of personal tort causes of action. 1 Once Cielinski was appointed as trustee of the estate, "title" to the cause of action passed to him. And, as such, absent a refusal on his part to do so, he acquired the right alone to prosecute the action. See Gochenour v. George & Francis Ball Foundation, 35 F.Supp. 508, 517 (S.D.Ind.1940), aff'd, 117 F.2d 259 (7th Cir.1941); Nagle v. Commercial Credit Business Loans, 102 F.R.D. 27, 30(2) (E.D.Pa.1983). Thus, when Cielinski was appointed trustee, Gaines was divested of title to the cause of action, and Cielinski became the real party in interest.
We reject Gaines' argument that she may prosecute the action in her own name because Cielinski authorized her to do so by "assigning" her the right to prosecute the action while he retained legal title to it. Although the purported assignment was memorialized in two consent orders...
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