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Miller v. Accelerated Bureau of Collections Inc.5/16/1996
Defendants, Accelerated Bureau of Collections, Inc., and John G. Schanck (collectively ABC), appeal the trial court's judgment awarding plaintiffs, Coy and Brenda Miller (the Millers), damages under the Fair Debt Collection Practices Act, § 12-14-101, et seq., C.R.S. (1991 Repl. Vol. 5A) (FDCPA). We reverse and remand for dismissal without prejudice.
In January 1991, a creditor of the Millers hired ABC to collect an overdue account. When ABC's efforts proved unsuccessful, the creditor filed suit to collect the debt. In their answer in that case, the Millers asserted that they had substantial claims against ABC for FDCPA violations.
A few months later, the Millers filed a voluntary petition for bankruptcy in the federal bankruptcy court and received their discharge in November 1991. They did not list their claims against ABC as an asset.
In January 1993, the Millers sued ABC alleging numerous violations of the FDCPA. ABC moved for summary judgment on the grounds, inter alia, that the bankruptcy estate was the real party in interest and that, therefore, the Millers lacked standing pursuant to C.R.C.P. 17(a). The Millers immediately filed a petition in the bankruptcy court to reopen their bankruptcy estate, to amend the schedules to show the claim against ABC as an asset, and to claim the personal injury exemption. The bankruptcy trustee objected to the petition, most particularly the claim for an exemption.
Ultimately the Millers and the bankruptcy trustee entered into a written stipulation which the bankruptcy court approved. In the stipulation, the parties thereto agreed, as pertinent here, that the Millers' counsel would continue to handle the pending litigation against ABC on a contingent fee basis and that the Millers and the trustee would share the proceeds, costs, and attorney fees. The stipulation did not assign or otherwise transfer the claim to the Millers, nor did the bankruptcy trustee agree to be bound by any judgment rendered in these proceedings.
The trial court denied ABC's motion for summary judgment. Following a trial to the court in September 1994, the Millers were awarded $18,000 in actual damages and $11,000 in punitive damages against ABC. This appeal followed.
On appeal, ABC asserts that the Millers lacked standing to bring their claims. We agree.
It is fundamental that every action shall be prosecuted in the name of the real party in interest. C.R.C.P. 17(a). The purpose of the requirement of standing is to protect the defendant from multiple proceedings. C. Wright, A. Miller & M. Kane, Federal Practice & Procedure: Civil 2d § 1541 (1990). The real party in interest is the party who, by virtue of the substantive law, has the right to invoke the aid of the court to vindicate the legal interest in question. Steiger v. Burroughs, 878 P.2d 131 (Colo. App. 1994).
I.
The parties agree that, under 11 U.S.C. § 541(a)(1) (1994), when a debtor files a voluntary petition in bankruptcy and a trustee is appointed, the claims become the property of the bankruptcy estate. The Millers assert that the foregoing proposition is only technically true in that the claims here are for personal injury and, therefore, are exempt.
Section 13-54-102(1)(n), C.R.S. (1987 Repl. Vol. 6A) exempts from levy and sale the "proceeds of any claim for damages for personal injuries suffered by any debtor." This exemption does not, however, apply to punitive damages that are awarded to punish the wrongdoer and not to compensate the plaintiff for injury. In re Keyworth, 47 Bankr. 966 (Ba
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