Collins v. Federal Land Bank of Omaha
421 N.W.2d 136
Iowa
1988
Check Treatment

*1 In Iowa-Illinois & Electric v. Iowa Gas Commission, Commerce 347 N.W.2d

State COLLINS, Individually Lavetta L. and as (Iowa 423, 1984), we were with faced Surviving Spouse Collins, of John V. request address the merits of an Margaret Birmingham, Adminis which had been dismissed the district Collins, trator of the Estate of John V. standing. Although court for want of re- Appellants, versing the district court’s resolution issue standing resulting and its dismissal OMAHA, FEDERAL LAND BANK OF A petition, we refused to rule Corporation, County Bank, Ida State petition’s Citing Rush, merits. we stated Eugene Knop, Appel and Alvin J. as follows: lees. urges The commission us to decide the No. 86-182.

merits of Planners’ present- contentions ed to but not ruled on Supreme Court of Iowa. so, If we court. were to do we would not 1988. function; performing be our review we deciding would be issues that were not by the

decided district court. This would contrary to

be our function as a court only presented question

review.

our appeal review on Planners’ is the peti-

district court dismissing decision standing.

tion for want of Having deter-

mined that the district court erred in

dismissing petition, we reverse and appeal

remand on permit Planners’

district court to decide the

merits.

(Citations omitted.) Id. See also Iowa Co.,

Gateway, Inc. v. Interstate Power (Iowa 1984).

N.W.2d reasoning applies

Similar here. The dis- ruling

trict court made no on the merits

the declaratory judgment petition appli- adjudication

cation points. of law We

consequently nothing to review. The

summary judgment is reversed and this

case is remanded proceedings for further opinion.

consistent with this

REVERSED AND REMANDED.

All except Justices concur

LAVORATO, J., part. who takes no

CARTER, Justice. Plaintiff Lavetta Collins and the adminis- husband’s trator her deceased estate dismissing appeal from an order their against malpractice claims defendant Alvin Ford. These claims were dismissed on J. ground they prop- had become the erty of the Collinses’ pursued plain- therefore could not be and own behalf. tiffs’ appealed Plaintiffs have also the dismis- against of claims other defend- sal three As to the defendants ants the case. Ford, plaintiffs’ failure other than we deem argue any ap- in their substantive issue any justiciable pellants’ brief a waiver See Iowa R.App.P. appeal. issue on judg- We therefore affirm defendants. ments favor of those Some to each other both in

Ford unrelated and in the chain of causal conse- time quences to flow from the claimed find one of omissions. Because we the rest and these claims is divisible from filing of the did not accrue until after the bankruptcy petition, we find that Collinses’ plaintiffs. claim to be hus- Plaintiff Lavetta Collins and her late band, John, operators of a were owners County. In family farm in Ida signed promissory note in favor of the $188,500.00, se- Bank for Federal Land mortgage farm. Col- cured on their the loan. delinquent linses became Parrish and Elizabeth S. Krui- Alfredo G. Federal Land Bank informed When the Kruidenier, of Parrish & Des denier fore- in March 1984 that faced them Moines, appellants. closure, they employed attorney Ford. filing of volun- led to the That association Gray and John C. Marvin F. Heidman bankruptcy by the Collinses tary petition Redmond, Eidsmoe, Heidman, Fredregill, 11 of the United 7 of title Schatz, appel- City, for Patterson & Sioux Code. States lee Alvin J. Ford. damage present filed the civil Plaintiffs Kevin Stoos Janet J. Brown and William others against defendant Ford and Klass, Mishne, City, for Wicher & Sioux May 1985. In their claim and Eu- appellees County Ida State Bank Ford, following allegations: they make the gene Knop. defendant, negli- Alvin J. [T]he Carter, Sar, Ed- Edmonds of William L. following respects: gent in the Green, appellee City, Sioux monds & were notified When the Plaintiffs a. Federal Land Bank of Omaha. 29,1985 Federal by the Defendant their loan Bank of Omaha that Land accelerated, Ford bankruptcy proceeding qual- to be Defendant failed so toas notify Plaintiff Collins ify the trustee's appeal. 541(a)(7). Notwithstanding

b. Defendant Ford failed to inform rejoinder, defendant Ford’s forceful we they signed Plaintiffs Collins that when agree with these contentions as to one of relating the documents receiver- plaintiffs’ legal malpractice claims which ship they forfeiting rights were *3 to we find be divisible from the others. parts their or farm land to lease of it themselves. bankruptcy Whether a trustee in

c. succeeds to of in property Defendant Ford informed “Collins” the debtor appear hearing that need not at the under 11 bankruptcy 7 U.S.C. sec receivership the and assured them 541(a)(1) tion turns on whether the debtor represent that he would them at the legal equitable has a or in the interest hearing. under property applicable state at the law that he might cause trouble. fendant Federal ter along so refused to the tiffs Plaintiffs ter [11]. resulting the consequently, of f. On one occasion Defendant Ford e. d. Defendant Ford failed to attend the land [7] receivership hearing himself, Defendant Ford rather than under file the didn’t because he felt he was in their well with the request the want present bankruptcy would Land Bank being Collins were to do delay urged lawyer unable to farm ¶ needed anything Chapter under of case. the Plain- deprived for De- getting Omaha Chap- Chap- and, [11] ed as the debtor’s that Id. tinction, under the ership time property interests. The rule on what under the same causes of 541.10[1] ing to the debtor commenced. 541(a) includes [T]he (emphasis the it made no difference whether the follows of estate created cause the bankruptcy petition present bankruptcy causes (15th trial in 4 added). are rules ed. court erred causes of action action accrued of Collier at acquired 1987): action the that In pursuant light time the apply is filed. Own is determined by assuming Bankruptcy code of this dis- the to section before belong- trustee is other stat after the bankruptcy the federal dismissing plaintiffs’ In de- petition. requires This error of law rever- Ford, fendant the district court concluded sal of clearly ap- the unless it any by plain- causes of action asserted pears as a matter of law that the cause of tiffs, arising “whether the before com- prior action arose of the bank- bankruptcy mencement of the action or af- ruptcy petition. ter the bankruptcy commencement of the action,” property bankrupt- were the of the bankruptcy Under the federal in act ex- cy plaintiffs. estate and the property not prior to Bankruptcy istence the Reform Act Other facts upon disposi- which bear our 1978, that, Supreme the Court mandated appeal tion are stated and considered determining in of the debtor in legal our discussion issues which estate, to be bankruptcy included presented. resort be must had to state law. v. Butner Right Bankruptcy I. Trustee to States, 48, 55, United 440 U.S. 99 S.Ct. Succeed to Debtors’ Causes Action. 914, 918, 136, (1979). 59 L.Ed.2d 141 This recognition paramount role of state argue

Plaintiffs that Collinses’ defining law in interests against attorney Ford an was not “interest pass which to the trustee has been extend- property” passed which trustee interpretation legal phrase ed to 11 “all equitable prop- They further that it interests of debtor in assert is not erty” an in property bankrupt- interest which under the current federal 1370, cy acquired Roach, after the 824 commencement code. Matter F.2d Cir.1987); general (3d Barry rule is that a Wilson v. Bill cause of action 859, (9th Cir.1987).1 Enters., aggrieved accrues when the party F.2d has a

right to institute and maintain a suit.... Iowa law there must be actu injury Under It is true the is traceable to the to the interest of another before al loss original wrongful act, negligent act or accrues. v. cause of action produced but until injury this act Wolfswinkel 1970); 452, (Iowa Gesink, 180 N.W.2d plaintiff’s by way interest of loss or dam- Griswold, 453, 260 Iowa Chrischilles age, no cause of action accrued. 94, (1967). 98-99 150 N.W.2d Chrischilles, 260 Iowa at 150 N.W.2d until theory that there no cause of action at 99-100. injury is an which needs to be remed there In their malpractice claims expressed following in the ex aptly ied is plaintiffs have al opinion: cerpt from a federal court leged separate negligence. six acts of Five land, Except topsy-turvy you die can’t of the six acts concern defendant Ford’s *4 conceived, you before or be divorced failure to advise the Collinses of their Dincher v. Marlin Firearms before built, ato We stated this been er om,” that crue] i.e., ilar existent railroad. For 823 planted, before a reasons, plaintiff. accepted, before that cause of action or you marry, (2d Cir.1952). miss a train [a or burn down a house never judicial remedy cause of action cannot ac- it has principle or sort of harvest a always running substantially as follows in rather Co., logical is available heretofore on a non- crop 198 F.2d exists, “axi- nev- sim- appear that defendant Ford leged to file the bankruptcy onomic loss to the bankruptcy which caused from rights under the Federal Land Bank mort gage being and failure to The sixth act of than under to involve conduct filing subparagraph established. These filing. prejudice, of the Chapter [11], resulting Collinses prevent “urged bankruptcy petition e of and conceivable ec under negligence, occurring prior the [Collinses] prior receivership Chapter petition, allegations as al [7] being Wolfswinkel: unable to farm the land as Chapter have under There must would [11].” be actual loss to the inter- theory injury est of another before a cause of action Plaintiffs’ on that claim chapter that the election made wrong negli- Generally, accrues. charged gence party gives liquidation of the in itself mandated of their farm right anyone. injury deprived opportunity them of the no of action to and original wrongful through is traceable to the save the farm debtor rehabilitation act, recovery negligent pro- chapter 11. Plaintiffs seek but until this act under consequences of that elec injury duces to claimant’s interest for the economic any adverse way damage, loss no no cause tion. We fail to discern how consequences produced by the economic action accrues. chapter impacted have 7 election could (emphasis at 456 Wolfswinkel, N.W.2d peti until after the Collinses added). approved We have this no-harm- tion was filed. principle professional no-foul actions alleged subparagraph e states negligence. involving In a case a claim The act which exists prepare design separate an architect did not cause of action allega- degree independently from the other five specifications with a reasonable skill, previously negligence. As we have technical we stated that tions transferred, lev- Bankruptcy whether that interest could be 1. Prior to the Reform Act of separate independent judicial process. and deter- upon, there were two minations state law. These were whether a property Under ied or sold under required applicable code, to be made under present bankruptcy deter- the second (1) particular eliminated, not the first. has been but mination in the debtor at the interest existed See 4 Collier 541.08. ¶ filed, (2) bankruptcy petition and time the noted, PART, no cause of action accrues AFFIRMED IN REVERSED IN wrongful produces law until the act Iowa PART AND REMANDED. Consequently, to the injury claimant. 541(a)(1), of 11 purposes HARRIS, except All concur Justices cause action was not in existence at the J., McGIVERIN, C.J., dissent, and who bankruptcy petition time the filed. We SNELL, JJ., and and SCHULTZ who conclude should

therefore the court not part. take no plaintiffs’ dismissed claim sub- paragraph petition relating post- of the e HARRIS, (dissenting). Justice bankruptcy arising injury. The un- My majority difference with the is a specifications negli- other der the five The majority nearly small one. holds that gence properly were dismissed without plaintiffs’ malpractice belongs all of claim to the prejudice of the trustee in to the estate. I it all think subsequently recovery seek does. for those breaches. gave All services which rise to the Applicability II. Section U.S.C. claim, malpractice all advice on form petition, drafting and nature it, signing completed prior of were In ascribing of the dis ownership the bankruptcy petition. The ma- puted cause of action to the Collinses’ salvages jority part one bankruptcy trustee, ap the district court *5 against by stating one the defendants peared place some on 11 reliance U.S.C. consequences that the economic the chal- 541(a)(7). section We conclude that such lenged impacted filing advice after the misplaced. reliance statute indi That in petition bankruptcy. disagree the I that, on acquiring cates addition to “all legal grounds. both factual and legal equitable interest of the debtor in property as of the commencement the majority The states that the economic case,” acquires “any the trustee also inter consequences malpractice the oc- property acquires ests that the estate filing curred after after the commencement of the case.” The petition. But even accepting plaintiffs’ le- wording of suggests this statute it gal theory they arose no later than with acquires relates assets which the trustee filing. process administering in the the bank the majority Unlike I think is merit there ruptcy estate. Bankrupt See Collier on argument in Ford’s based 11 U.S.C. (15th 1987). such, cy ed. 11541.20 As we do 541(a)(1) section which states that bank- designed not believe this statute is to de ruptcy comprises eq- estate “all property which, feat appli interests uitable interest the debtor in law, state cable vest in the debtors after (Em- commencement of the case.” they have postfiling attained “fresh start” o/the added.) phasis The majority dismisses the status. wording statute, stating is not it judgment The is affirmed as to the “designed to defeat interests claims those defendants other than de- vest in which ... debtors after judgment Ford. The is fendant also af- filing post attained ‘fresh status.” start’ as to against firmed the claims defendant added.) (Emphasis a, b, c, d, Ford subparagraphs embraced congress I think the line plaintiffs’ drawn and/of Ford. significant The because it con- as to the indicates when reversed gress him upon based believed interests of the bank- bankruptcy petition. rupt stopped being assigned bank- is re- ruptcy manded for further estate under 11 section court U.S.C. proceedings suggests that claim not inconsistent The term “as to me of” opinion. with this congress be- aware that claims unless longed petition.

arose after affirm.

I would

McGIVERIN, C.J., joins this dissent. ANDERSON, Individually, and

Shawn Anderson, Appellants,

Joanne CO.,

GLYNN CONSTRUCTION

INC., Appellee, Inc.,

Saliger, Defendant.

No. 86-1083.

Supreme Iowa. Court of 1988.

James L. Thomas Bice Kramer and J. Latham, Johnson, Erb, Carlson, Gibb & P.C., appellants. Dodge, Fort Orrell, Jr., Hopkins

John E. & Hueb- ner, P.C., Moines, appellee. Des LARSON, P.J.,

Considered SCHULTZ, CARTER, LAVORATO, and NEUMAN, JJ.

CARTER, Justice.

Plaintiff, Anderson, grain eleva- Shawn employee, from a directed appeals tor ver- in personal injury de- dict fendant, Glynn Company. Construction independent Defendant is an contractor grain auger repaired who and rebuilt by plaintiff’s ar- employer. used Plaintiff court’s gues that