Summary
In Skavlem, the defendants filed a motion to dismiss the plaintiff's wrongful death claim arguing that plaintiff lacked standing and should be judicially estopped from pursuing her claim.
Summary of this case from Sharp v. Oakwood United HospitalsOpinion
Civil No. A2-99-56.
Filed September 23, 1999.
Summary : Motion to dismiss wrongful death claim, treated as a motion for summary judgment. Plaintiff has standing to bring wrongful death claim notwithstanding her failure to disclose the claim on the preceding bankruptcy petition. North Dakota statutory scheme makes clear that plaintiff brings the claim in a representative capacity for the benefit of the "heirs at law." Court will not use judicial estoppel to bar plaintiff from bringing claim. Motion denied.
MEMORANDUM AND ORDER
I. Introduction
Before the court is a motion to dismiss plaintiff's wrongful death claim filed by defendants Road One and Frankovic through their attorney Larry Boschee. (doc. #16). The motion is joined by defendants Chambers and Parallel Transportation Services. (doc. #11). The court has received plaintiff's response and counter motion to defer consideration of defendants' motion filed by her attorney Jay Fiedler. (doc. #27, #28). Defendants have filed a reply brief. (doc. #35).
Although defendants bring this claim as a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), matters outside of the pleadings have been presented to the court; thus, the motion will be treated as one for summary judgment pursuant to Rule 56. The court has considered defendants' motion, along with the briefs, affidavits, statements of material fact, and entire file, and hereby DENIES the motion for dismissal, (doc. ## 11, 16), for the reasons herein discussed.
II. Background
Terri Skavlem is the widow of Dennis Skavlem, who died in a motor vehicle accident on November 13, 1997. (Skavlem Aff. doc. #29). The Skavlems have three children, one of whom is still a minor living at home. (Id.). Terri Skavlem filed for bankruptcy on February 10, 1998, and did not declare a wrongful death claim as an asset of the bankruptcy estate. (Def. Stmt. of Material Facts doc. #18). Ms. Skavlem received a discharge on May 15, 1998. (Id.). Some eight months later, Ms. Skavlem commenced this wrongful death action. (Pl. Consol. Brief doc. #28).
III. Analysis A. Summary Judgment Standards
Summary judgment is appropriate only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A fact is "material" if it might affect the outcome of a case, and a factual dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Churchill Bus. Credit, Inc. v. Pacific Mut. Door Co., 49 F.3d 1334, 1336 (8th Cir. 1995). The "basic inquiry" for purposes of summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one sided that one party must prevail as a matter of law." Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376 (8th Cir. 1996) (citing Anderson, 477 U.S. at 251-52).
B. Standing to Bring Wrongful Death Claim
Defendants argue that this court should dismiss Skavlem's wrongful death claim on the basis that plaintiff lacks standing since she failed to disclose the claim in her bankruptcy proceedings. It is true that, the property of a bankruptcy estate includes causes of action belonging to the debtor at the commencement of the action. In re Ozark Restaurant Equip. Co. v. Anderson, 816 F.2d 1222, 1225 (8th Cir. 1987). "Any of these actions that are unresolved at the time of filing then pass to the trustee as representative of the estate, who has responsibility . . . of asserting them whenever necessary for collection or preservation of the estate."Id. As a result, the debtor loses standing to pursue any causes of action belonging to her prior to the bankruptcy petition. Wolfe v. Gilmour Mfg. Co., 143 F.3d 1122, 1126 (8th Cir. 1998). Instead, those actions remain part of the bankruptcy estate and may only be dealt with by the bankruptcy trustee unless the claim is abandoned pursuant to the requirements of Title 11, United States Code section 554(a) or (b).
Section 541 of Title 11 United States Code defines property of the estate as including "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1).
It is uncontested that Mrs. Skavlem did not schedule the wrongful death claim as an asset of her bankruptcy estate. (Skavlem Aff. doc. #29). Since the claim was not scheduled, it follows that the claim could not have been abandoned by the bankruptcy trustee.Vreugdenhill v. Navistar Int'l Corp., 950 F.2d 524, 526 (8th Cir. 1991). See also Munters Corp. v. Locher, 936 S.W.2d 494, 497 (Tex.Ct.App. 1997) (recognizing that a claim that was never formally scheduled could not have been abandoned by the trustee). Claims that are not abandoned by the bankruptcy trustee do not revest in the debtor at the close of the proceedings. See Munters, 936 S.W.2d at 497.
Thus, if the wrongful death claim belonged to the debtor, Mrs. Skavlem, she would have no standing to pursue this claim in this court since it became part of the bankruptcy estate. The question thus arises whether a wrongful death action belongs to a debtor; and more specifically, whether Dennis Skavlem's wrongful death claim belonged solely to this debtor, Terri Skavlem, his widow. The court notes that it has not found, and counsel have not provided, any North Dakota case addressing this issue. As a matter of first impression, this court is constrained to determine how the North Dakota Supreme Court would resolve the issue.
The North Dakota Supreme Court in Littlefield v. Union State Bank, 500 N.W.2d 881 (N.D. 1993) has held that the preclusive effect of a corporation's prior bankruptcy proceeding and the law of res judicata barred shareholders from litigating lender liability claims against a bank and its officers and professional malpractice claims against the corporation's accountant, where those claims were not disclosed in bankruptcy proceeding. Corporate lender liability claims and professional malpractice claims are not substantially similar to a wrongful death claim; therefore, the Littlefield decision is not authoritative in this case.
There is no common law remedy for the wrongful death of another; in North Dakota such recovery is purely statutory. Johnson v. International Harvester Co., 487 F. Supp. 1176, 1177 (D.N.D. 1980). Chapter 32-21 of the North Dakota Century Code codifies the right to recover for wrongful death. The long recognized purpose of the statute, is to give some "measure of protection to those persons within a fixed degree of relationship to and dependency on the deceased." Satterburg v. Minneapolis, St. P. S.S.M. Ry., 121 N.W. 70, 71 (N.D. 1909). This protection "inures to the exclusive benefit of the decedent's heirs at law." N.D. Cent. Code § 32-21-04 (1996).
North Dakota's statutory scheme specifically enumerates the persons capable of bringing the action and a detailed order of priority for those persons. See § 32-21-03 (Supp. 1999). Priority is given to the "surviving husband or wife, if any." Id. A person with a lower priority may only bring the action after first making a demand on the person with higher priority and waiting a period of thirty days. Id. It is clear that North Dakota has given Mrs. Skavlem, the deceased's surviving wife, priority to bring this action. However, it does not follow that the action "belongs" to Mrs. Skavlem. In fact, long ago the North Dakota Supreme Court made clear that "whoever brings the action does so in a representative capacity for the exclusive benefit of the heirs at law." Satterberg, 121 N.W. at 72. The term "heirs at law" includes any person who may succeed to property of an intestate through intestate succession. Broderson v. Boehm, 253 N.W.2d 864, 869-70 (N.D. 1977). The foregoing makes clear that under North Dakota's statutory scheme a wrongful death action does not exclusively belong to the person entitled to bring the action under section 32-21-03. Rather, that person brings the action in a representative capacity.
Although many courts have held that undisclosed personal injury claims are property of the bankruptcy estate, the court has found only two cases addressing the issue of whether a wrongful death claim is property of the bankruptcy estate. These cases, however, address whether a wrongful death claim is an inheritance of the bankruptcy estate, and are not on point. Recognizing that the court writes on a clean slate, the court holds that the wrongful death claim does not belong exclusively to Mrs. Skavlem since the claim is brought in a representative capacity and not in a personal capacity.
See, e.g., Sierra Switchboard Co. v. Westinghouse Elec. Co., 789 F.2d 705, 709 (9th Cir. 1986); Tignor v. Parkinson, 729 F.2d 977 (4th Cir. 1984).
The decision of In re Henricks, 22 B.R. 572, 577 (W.D.Mo 1982), held that a cause of action arising under the Missouri wrongful death act was the property of the bankruptcy estate as an inheritance under section 541(a)(5)(A) of the bankruptcy code. The court in Hendricks conceded, however, that "some elements of recovery authorized by the Missouri wrongful death act are to redress the beneficiary's own injury or losses." Hendricks, 22 B.R. at 577. The court implied that in such a case, the proceeds would flow directly to the debtor and not through inheritance. Id.
The Hendricks decision was questioned by In re Surowitz, 94 B.R.438, 440 n. 4 (E.D.Mich. 1988). In Surowitz, the court held that a wrongful death action arising out of an accident 179 days after the bankruptcy petition was filed was not an inheritance under section 541(a)(5)(A) of the bankruptcy code. 94 B.R. at 439. The court reasoned that under the Michigan wrongful death statute, a portion of the award was designed to benefit the bankrupts for their loss of financial support and society of their daughter. Id. As such, it could not be considered an inheritance, but rather, an ordinary tort award. Id.
Neither of these cases is directly on point since the wrongful death claim did not follow Mrs. Skavlem's bankruptcy petition; instead, it preceded the petition. Thus this claim cannot be analyzed as an inheritance.
Moreover, the plaintiff indicates that the bankruptcy case will be reopened for the benefit of the creditors. The court supports and approves of this so that the plaintiff's creditors may have an opportunity to make a legitimate claim against any recovery she may receive. This, however, is a matter strictly between Mrs. Skavlem and the bankruptcy court.
C. Judicial Estoppel
The defendants also argue that plaintiff's wrongful death claim should be dismissed pursuant to the doctrine of judicial estoppel. Judicial estoppel is a doctrine which protects the integrity of the judicial process. Hossaini v. Western Missouri Medical Ctr., 140 F.3d 1140, 1143 (8th Cir. 1998). The doctrine prohibits a party from taking inconsistent positions in the same or related litigation. Id. at 1142.
Because this is a diversity case, the court must look to the substantive law of North Dakota. Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938); Monterey Dev. v. Lawyer's Title Ins., 4 F.3d 605, 608 (8th Cir. 1993). North Dakota courts have only addressed judicial estoppel in passing. See Littlefield v. Union State Bank, 500 N.W.2d 881, 883 (N.D. 1993) (stating that other courts have used equitable estoppel, judicial estoppel, or res judicata to bar a debtor from bringing a lender-liability action after a bankruptcy reorganization). Thus, the court will look to the Eighth Circuit to discern the contours of the doctrine.
The elements of judicial estoppel have not been precisely defined in this circuit either. Hossaini, 140 F.3d at 1143. There are two prevailing views, neither of which the circuit has expressly chosen. The majority view applies the doctrine only where the inconsistency was adopted or accepted by the court in the earlier litigation. Id. The minority approach applies the doctrine even if the court did not adopt the inconsistency, but instead determines that the party had an intent to play "fast and loose" with the court. Id. The circuit has noted that "under either formulation, judicial estoppel is limited to those instances in which a party takes a position that is clearly inconsistent with its earlier position." Id.
The court finds no clear inconsistency in this case. While it is true that plaintiff did not list a wrongful death claim as an asset in her bankruptcy proceeding, at that time no claim was pending. (Skavlem Aff. doc. #29). Moreover, no determination had been made that a claim would be filed. (Id.). Thus, there is no clear inconsistency and the court will not apply the doctrine of judicial estoppel to bar plaintiff from bringing this case.
The court notes that judicial estoppel is an equitable doctrine. Applying the doctrine in this case, however, would lead to a most inequitable result. If the court were to decline to hear this case, defendants, as potential tortfeasors, would gain an undeserved windfall at the expense of the bankruptcy creditors and Dennis Skavlem's heirs at law. This is a result the court will not tolerate.
IV. Conclusion
Based on the foregoing material questions of fact remain and summary judgment is, therefore, inappropriate. The defendants' motion to dismiss the wrongful death claim, treated as a motion for summary judgment (doc. ##11, 16), is DENIED. Plaintiff's counter motion to defer consideration, (doc. #27), is DENIED as moot. The case will proceed in this court.
IT IS SO ORDERED.