Wells v. Hughes
2017 Ohio 8684
| Ohio Ct. App. | 2017Background
- Ashley Wells entered a land contract with Robert and Brenda Hughes in May 2014 and paid $10,000 as a down payment.
- Ashley filed a civil complaint against the Hugheses on December 17, 2015 alleging fraud, unjust enrichment, and deception.
- Ashley filed for bankruptcy on September 3, 2015 and did not schedule the land-contract interest or the $10,000 payment as assets; her bankruptcy discharged/closed in January 2016.
- During the municipal-court bench trial on October 3, 2016 the court paused proceedings after learning of Ashley’s bankruptcy discharge and questioned her standing.
- The bankruptcy trustee moved to be substituted as plaintiff on February 28, 2017; the trial court denied substitution and dismissed Ashley’s complaint for lack of standing.
- The municipal court’s June 29, 2017 final entry dismissed the remaining counterclaims and is the appealable order at issue; Ashley appeals the denial of the trustee’s substitution and the court’s standing ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ashley had standing to prosecute pre-petition claims after filing bankruptcy | Ashley (through appeal) sought substitution of the bankruptcy trustee as plaintiff to allow the suit to proceed | Defendants argued the claims became property of the bankruptcy estate and only the trustee had standing unless the trustee abandoned the claims | Court held Ashley lacked standing because the pre-petition claims were estate property and the trustee never abandoned them; substitution could not cure the initial lack of standing |
Key Cases Cited
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (court cannot substitute real party in interest when no party with standing invoked jurisdiction)
- Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375 (definition of standing and party’s right to seek judicial relief)
- State ex rel. Teamsters Local Union No. 436 v. Cuyahoga Cty. Bd. of Commrs., 132 Ohio St.3d 47 (standing determines entitlement to have merits decided)
- Tyler v. DH Capital Mgt., Inc., 736 F.3d 455 (trustee generally has exclusive standing to pursue pre-petition causes of action)
- Auday v. Wet Seal Retail, Inc., 698 F.3d 902 (discusses abandonment and reversion of claims to debtor)