The debtor's rights under his contract with American Express are intangible personal property that became property of the bankruptcy estate. Hall v. Perry (In re Cochise College Park, Inc.), 703 F.2d 1339 (9th Cir. 1983); In re Babbitt, 174 B.R. 548 (Bankr. N. D. Cal. 1993); American Central Airlines, Inc. v, O'Hare Regional Carrier Scheduling Committee (In re American Central Airlines, Inc.), 52 B.R. 567 (Bankr. N. D. Iowa 1985); Waldschmidt v. CBS, Inc., 14 B.R. 309 (M. D. Tenn. 1981); Medor v. Lamb (In re Lamb), 47 B.R. 79 (Bankr. D. Vt. 1985). The debtor's right to copies of the records was itself property that passed into the bankruptcy estate.
When dealing with statutory construction, the starting point in the analysis should be the language itself. In re Burke Mountain, Inc., 64 B.R. 799, 802 (Bkrtcy.D.Vt. 1986), citing, Medor v. Lamb (In re Lamb), 47 B.R. 79 (Bkrtcy.D.Vt. 1985). As a general rule, a statute should be read according to its literal terms, unless so reading renders the statute ineffective or leads to irrational consequences.
Although the term "property of the estate" is broadly defined under the Code, some courts have nevertheless held that when a debtor enters into a prepetition contract and payment is contingent upon future performance by the debtor, the debtor's estate has no interest in the future payment. See Vogel v. Palmer ( In re Palmer), 57 B.R. 332, 334 (Bankr.W.D.Va. 1986) (debtor's interest in contingent postpetition bonus not property of estate when bonus conditioned on future employment); Medor v. Lamb ( In re Lamb), 47 B.R. 79, 82 (Bankr.D.Vt. 1985) (debtor's interest in prepetition contract in which postpetition payment subject to compliance with milk reduction formula not property of the estate); McCracken v. Selner ( In re Selner) 18 B.R. 420 (Bankr.S.D.Fla. 1982) (debtor's interest in postpetition insurance sale commissions that are contingent on debtor's continued employment not property of estate). In Boyle v. Stefurak ( In re Sloan), 32 B.R. 607 (Bankr.E.D.N.Y. 1983), the Chapter 7 trustee sought to include as property of the estate a finder's fee received by the debtor postpetition.
The starting point in every case involving statutory construction is the language itself. Medor v. Lamb ( In re Lamb), 47 B.R. 79, 12 C.B.C.2d 475 (Bankr. D.Vt. 1985). As a general rule, a statute should be read according to its literal terms, United States v. Locke, 471 U.S. 84, 93, 105 S.Ct. 1785, 1792, 85 L.Ed.2d 64, 75 (1985), unless this renders the statute ineffective or leads to irrational consequences, In re A.C., 144 Vt. 37, 470 A.2d 1191 (1984), leads to an absurd consequence, State v. Goyet, 120 Vt. 12, 132 A.2d 623 (1957), or is otherwise demonstrably at odds with the intentions of the statute's drafters.
Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539, 561 (1975) reh'g denied 423 U.S. 884, 96 S.Ct. 157, 46 L.Ed.2d 114 (1975) (Powell, J., concurring: "The starting point in every case involving construction of a statute is the language itself."). Accord, Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S.Ct. 2297, 2301-02, 85 L.Ed.2d 692, 696-97 (1985); Burke Mountain Recreation, Inc. v. VermontDevelopment Credit Corporation (In re Burke Mountain Recreation, Inc.), 64 B.R. 799, 802 (Bkrtcy.D.Vt. 1986) (citing, Medor v. Lamb (In re Lamb), 47 B.R. 79, 81, 12 CBC.2d 475 (Bkrtcy.D.Vt. 1985)).
The starting point in every case involving statutory construction is the language itself. Medor v. Lamb ( In re Lamb), 47 B.R. 79, 12 C.B.C.2d 475 (Bkrtcy.D.Vt. 1985). As a general rule, a statute should be read according to its literal terms, United States v. Locke, 471 U.S. 84, 93, 105 S.Ct. 1785, 1792, 85 L.Ed.2d 64, 75 (1985), unless this renders the statute ineffective or leads to irrational consequences, In re A.C., 144 Vt. 37, 470 A.2d 1191 (1984), leads to an absurd consequence, State v. Goyet, 120 Vt. 12, 132 A.2d 623 (1957), or is otherwise demonstrably at odds with the intentions of the statute's drafters, Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982).
However, as outlined above, the Debtor did not become entitled to the amount until many months later. In reaching this decision, attention is drawn to the recent case of In re Lamb, 47 B.R. 79 (Bankr.D.VT 1985). In Lamb, cash payments made post-petition to the debtors, milk producers, under the terms of a milk diversion program with the Department of Agriculture, were held to not be property of the estate.
[Citation.]" ( In re Lamb (D.Ver. 1985) 47 B.R. 79, 82.) Likewise, the cause of action for defamation arose from Phillip Haley's interest in his personal reputation, not an asset of the bankruptcy estate. All of plaintiffs' causes of action arising from Phillip's termination of employment, whether based on contract or another theory, accrued post-petition and are not part of the bankruptcy estate.
(1b) "Under the Bankruptcy Act, where an uncompleted contract between the debtor and another was of such a nature as to be based on personal service or skill, or personal trust or confidence, it was held that the debtor's interest in such contract did not pass to the estate. [Citation.]" (In re Lamb (Bankr. D.Ver. 1985) 47 B.R. 79, 82.) Likewise, the cause of action for defamation arose from Phillip Haley's interest in his personal reputation, not an asset of the bankruptcy estate. All of plaintiffs' causes of action arising from Phillip's termination of employment, whether based on contract or another theory, accrued postpetition and are not part of the bankruptcy estate.