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Bowie v. Rose Shanis Financial Services12/9/2004
This appeal raises the question of what happens to the ownership of a law suit that once vests in the trustee of a bankruptcy estate after the estate subsequently closes with the law suit yet unpursued. Is ownership in limbo? How, if at all, may a trustee, through inaction, abandon such an asset, thus permitting it to revest in the original debtor? Is there a difference between the fate of a law suit that has been formally scheduled as an asset of the estate and the fate of one that has not?
The Present Case
On March 25, 2003, the appellant, L.A. Bowie ("Bowie"), filed a five-count complaint against the appellee, Rose Shanis Financial Services, LLC ("Rose Shanis"), in the Circuit Court for Baltimore City. On December 2, 2003, Rose Shanis filed a Motion to Dismiss or, in the Alternative, a Motion for Summary Judgment. The second paragraph of that motion well states the dominant issue before us on this appeal.
2. Approximately one year after the alleged events giving rise to this lawsuit occurred, Plaintiff filed for bankruptcy protection on December 21, 2001. As a result, the claims alleged against Rose Shanis do not belong to Plaintiff, but rather to his bankruptcy estate. Because the alleged claims were neither exempted from the estate nor abandoned by the bankruptcy trustee, Plaintiff is without standing to bring or pursue this action. Accordingly, Rose Shanis is entitled to the dismissal of the Complaint for lack of subject matter jurisdiction.
(Emphasis supplied).
Following a full hearing, including extensive argument by both parties, on January 12, 2004, Judge Kaye Allison granted summary judgment in favor of Rose Shanis on the ground that there was a "lack of subject-matter jurisdiction." This appeal timely followed. In it, Bowie raises two issues.
1. Are the claims of Appellant property of his Bankruptcy Estate and does he have standing to file this action?
2. If the claims of Appellant are property of his Bankruptcy Estate, what procedure should be followed under the circumstances herein?
The Chronology
The question of whether the Circuit Court for Baltimore City had subject matter jurisdiction over the underlying suit was essentially the question of whether the plaintiff, Bowie, had standing to bring the suit, to wit, 1) Did the cause of action belong to Bowie when he filed the suit on March 25, 2003? or, more significantly, 2) Did the cause of action belong to Bowie when Judge Allison granted summary judgment motion on January 12, 2004? The chronology of events is critically important.
A. The Basis for the Underlying Suit: November 3, 2000
On June 12, 2000, Bowie obtained a loan of $30,024.88 from Rose Shanis. The loan was secured by two vehicles owned by Bowie, a 1998 Ford Expedition and a 2000 Ford Excursion. When Bowie failed to make his August and September 2000 payments on the loan, Rose Shanis exercised its contractual right under the terms of the loan agreement and repossessed the two vehicles. Rose Shanis advised Bowie of its intent to sell both vehicles. On October 31, 2000, the 2000 Ford Excursion was sold at public auction. Rose Shanis did not sell the 1998 Ford Expedition. It relinquished possession of that vehicle to Arcadia Financial, Ltd., upon learning that Arcadia was the senior lienholder. Shortly thereafter, Arcadia caused the 1998 Ford Expedition to be sold.
Bowie filed its five-count complaint against Rose Shanis on March 25, 2003. The complaint alleged 1) fraud, 2) negligence, 3) breach of contract, 4) conversion, and 5) interference with a contract. Our concern is not with the merits of that suit, but only with the da
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