2006 Ohio 4342 | Ohio Ct. App. | 2006
{¶ 2} Appellant filed a complaint in this lawsuit in June 2004, and claimed a Columbus, Ohio address. In his complaint, appellant stated that he had a "private right of action under Ohio Law[,]" and alleged that appellee placed on its web site and in The Columbus Dispatch advertisements that violated Ohio's Consumer Sales Practices Act, R.C.
{¶ 3} Appellee's motion to dismiss appellant's appeal concerns appellant's bankruptcy filings, and appellee attached to its motion a copy of appellant's bankruptcy filings, which establish the following. Appellant filed for bankruptcy as a Florida resident in the United States Bankruptcy Court for the Southern District of Florida. Appellant did not list this appeal in the section requiring a schedule of assets or liabilities, and appellant did not list this appeal as a claimed exemption from the bankruptcy estate. Appellant did list the appeal in his statement of financial affairs. On November 9, 2005, the bankruptcy court announced a creditors' meeting, and the creditors' meeting was held on December 5, 2005. Likewise, on December 5, 2005, the bankruptcy trustee filed a "Report of No Distribution[,]" indicating that:
* * * I, Trustee of this estate, * * * have made diligent inquiry into the financial affairs of the Debtor(s) and the location of property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. * * *
The bankruptcy trustee also noted in the report that "INTERESTED PARTIES HAVE 30 DAYS FROM THE DATE OF THIS ENTRY TO OBJECT TO THIS REPORT[.]" Ultimately, on February 8, 2006, appellant was discharged from the bankruptcy.
{¶ 4} Appellant attached to his memorandum against appellee's motion to dismiss a November 27, 2005 letter that he wrote to the bankruptcy trustee. In the letter, appellant stated the following about this appeal:
Although I am the plaintiff in this case, the Magistrate dismissed the case and ordered me to pay $23,974 in attorney's fees to the defendant for filing the suit. The reviewing judge agreed, so I hired an attorney to appeal the case (which we did). Since he quit, I am again representing myself * * *. The merit briefs have been filed and the court of appeals has been notified of the bankruptcy stay.
{¶ 5} In its motion to dismiss appellant's appeal, appellee argues that appellant's appeal became part of the bankruptcy estate and that the appeal still remains under the control of the bankruptcy estate trustee, and not appellant. Therefore, appellee contends that we must dismiss appellant's appeal because appellant is not a real party in interest in the appeal and because the bankruptcy estate trustee did not seek substitution. We agree.
{¶ 6} A bankruptcy estate is created when a debtor files for bankruptcy protection. Section 541(a)(1), Title 11, U.S.Code;Ohio v. Kovacs (1985),
{¶ 7} Addressing the concept of property in regards to the federal bankruptcy code, the United States Supreme Court has held that, in the absence of controlling federal law, property and interests in property are creatures of state law. Barnhill v.Johnson (1992),
{¶ 8} We previously recognized that bankruptcy estate property includes causes of action that accrued prior to a bankruptcy filing. See Grim v. Schottenstein, Zox Dunn Co.,L.P.A. (1992),
{¶ 9} Once this appeal became property of the bankruptcy estate, it remained so unless "abandoned." Section 554(d), Title 11, U.S.Code. Appellant asserts that the bankruptcy estate trustee abandoned this appeal after he filed the "Report of No Distribution[,]" and after appellant was discharged from the bankruptcy.
{¶ 10} The party seeking to demonstrate abandonment, in this case appellant, bears the burden of persuading the court that the trustee intended to abandon the property. McLynas v. Karr,
Franklin App. No. 03AP-1075,
{¶ 11} Appellant first asserts that the bankruptcy trustee provided notice that it intended to abandon this appeal when it issued the "Report of No Distribution[.]" In arguing as such, appellant evokes abandonment under Section 554(a). However, as noted above, such abandonment requires notice to all creditors. See Bankr.R. 6007(a); Section 554(a), Title 11, U.S.Code. The notification "is to provide an opportunity for any potential opposition * * * to file objections and be heard by the Court."In re Caron (Bankr.Ct.N.D.Ga. 1984),
{¶ 12} We further conclude that appellant did not establish abandonment of this appeal under Section 554(b). Appellant has not demonstrated that a party in interest requested that the bankruptcy court abandon this appeal, and, as noted above, we have no indications that the creditors received the requisite notification of any such proposed abandonment.
{¶ 13} With respect to abandonment under Section 554(c), as noted above, a debtor must "schedule" property pursuant to Section 521(a)(1), in order for the property to be abandoned by operation of law upon the closing of the debtor's bankruptcy case. Under Section 521(a)(1), a debtor filing for bankruptcy protection must file a schedule listing assets and liabilities. Thus, to evoke abandonment in Section 554(c), a debtor must list property in the schedule of assets and liabilities as Section 521(a)(1) requires. See In re Winburn (Bankr.Ct.N.D.Fla. 1993),
{¶ 14} Here, appellant omitted this appeal from the bankruptcy schedule of assets and liabilities. Appellant emphasizes that he nonetheless listed the appeal in the statement of financial affairs. However, courts have held that a cause of action is not considered "scheduled" for purposes of abandonment under Section 554(c) when, like here, the debtor lists a cause of action in the statement of financial affairs, but not in the schedule of assets and liabilities. See, e.g., Winburn at 676;Fossey at 272; McGlone.
{¶ 15} Such is the case because "[w]hether the trustee or any creditor knew about the asset is irrelevant. In order for an asset of the estate to be abandoned to the" debtor under Section 554(c), Title 11, U.S. Code, the debtor "must first comply with the code." Winburn at 676. Courts "will not do a case by case analysis of what the [bankruptcy] [t]rustee's knowledge was and whether that knowledge was enough to result in the abandonment of an unscheduled asset" because "[t]he clear language of" Section 554(c) requires a debtor to schedule property "on the statement of assets and liabilities in order for it to be abandoned" by operation of law. See Winburn at 676. Thus, for these same reasons, and contrary to appellant's contentions, we find it irrelevant that appellant provided the bankruptcy trustee details of this appeal in the November 27, 2005 letter.
{¶ 16} Accordingly, based on the above, we conclude that appellant did not properly schedule this appeal as Section 521(a)(1), Title 11, U.S. Code, requires. Therefore, we conclude that the bankruptcy trustee did not abandon this appeal under Section 554(c), Title 11, U.S.Code.
{¶ 17} Because the bankruptcy trustee has not abandoned this appeal under Section 554(a), (b) or (c), we conclude that this appeal remains the property of the bankruptcy estate under Section 554(d), Title 11, U.S.Code. See Parker v. Wendy's Intl.,Inc. (C.A.11, 2004),
{¶ 18} App.R. 29(B) provides a means for "necessary" substitution of parties. Here, the bankruptcy trustee had not substituted into this appeal, and, therefore, we have authority to dismiss appellant's appeal because appellant is not the real party in interest. See State v. McGettrick (1987),
Appeal dismissed.
Bryant and McGrath, JJ., concur.
