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Battle v. Alph Cemical And Paper Co.5/26/2000
In so ruling, the Fifth Circuit held that the bankruptcy trustee's failure to assert a cause of action was not alone sufficient to authorize a finding of abandonment, but that the debtor could petition the bankruptcy court to authorize it, the debtor, to sue. 441 F.2d at 868; accord, Baker v. Data Dynamics, Inc., 561 F. Supp. 1161, 1165 (W.D.N.C. 1983); People v. Kings Point Corp., 188 Cal. App. 3d 544, 549, 233 Cal. Rptr. 227, 230 (1986).
In this case, the bankruptcy court specifically authorized Battle to maintain her action against Alpha. Battle sought leave from the bankruptcy court to continue DV-98-691 in the district court, and the bankruptcy court granted her leave to do so. Once that leave was granted, Battle was the real party in interest with the right to sue Alpha: "the law is clear that the bankruptcy court can order the trustee or can authorize the debtor to pursue any relevant claims." McCon v. Martini, (Ohio Ct. App., 7th Dist., No. 97 CA 152, Nov. 10, 1999) (unpublished) (debtor could maintain her conversion action in state trial court where bankruptcy court in which her Chapter 7 petition was pending had permitted her to proceed). While Alpha insists that Battle's failure to place her action against Alpha on her asset schedule compels a conclusion that the trustee has not abandoned that action as an estate asset, the bankruptcy court's grant of permission to Battle to maintain her action against Alpha was an "equivalent alternative" to abandonment for purposes of her ability to proceed in the district court (and, later, the circuit court). Taylor v. Swirnow, 80 F.R.D. 79, 82 (D. Md. 1978). Therefore, we conclude that the trial court erred in concluding that Battle had no "standing" to pursue her action against Alpha.
Based upon the foregoing facts and authorities, we reverse the summary judgment in favor of Alpha, and we remand the cause for further proceedings.
REVERSED AND REMANDED.
Yates, Monroe, Crawley, and Thompson, JJ., concur.
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