501 S.W.3d 255
Tex. App.2016Background
- In Feb. 2013 Revell was injured at Morrison Supply; he sued for negligence after his chapter 13 bankruptcy filed in Dec. 2012 had been dismissed in Apr. 2013 without discharge.
- Morrison moved for traditional summary judgment, asserting Revell lacked standing because any claim arising during the bankruptcy belonged to the bankruptcy estate and Revell failed to schedule the claim.
- Morrison’s summary-judgment evidence showed Revell’s chapter 13 was dismissed for failure to confirm the plan, creditors received no unsecured distributions, and Revell never listed a contingent claim on his schedules.
- Revell responded that (1) he told the trustee about his injury, (2) § 349(b)(3) revested estate property to him on dismissal, and (3) Kilpatrick is wrongly decided; he also argued creditors and Morrison Supply suffer no prejudice if the suit proceeds.
- The trial court granted summary judgment for Morrison based on standing; Revell appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Revell has standing to pursue the personal-injury claim after dismissal of his chapter 13 | Dismissal under 11 U.S.C. § 349(b)(3) revested the estate’s property (including the claim) in Revell; he told the trustee of the injury | The claim became property of the bankruptcy estate and Revell failed to disclose it on schedules, so he lacks standing | Reversed trial court: § 349(b)(3) revests estate property on dismissal even if the debtor did not list the asset; Revell has standing |
Key Cases Cited
- Kilpatrick v. Kilpatrick, 205 S.W.3d 690 (Tex. App.—Fort Worth 2006) (held undisclosed assets do not revest on dismissal under § 349(b)(3))
- Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473 (2d Cir. 2014) (rejected Kunica and applied § 349(b)(3)’s plain language to revest undisclosed assets on dismissal)
- Norris v. Brookshire Grocery Co., 362 S.W.3d 226 (Tex. App.—Dallas 2012) (applied § 349(b)(3) to revest a dismissed debtor’s claim despite nondisclosure)
- Kunica v. St. Jean Fin., Inc., 233 B.R. 46 (Bankr. S.D.N.Y. 1999) (held only disclosed assets revest on dismissal; criticized and rejected by court)
- In re Income Property Builders, Inc., 699 F.2d 963 (9th Cir. 1983) (described dismissal as restoring parties to prepetition rights)