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Cloud v. Northrop Grumman Corp.11/12/1998
992) 140 B.R. 891 [California's public policy against the assignment of legal malpractice claims did not preclude the legal malpractice claim from being estate property].)
Plaintiff's claims in the instant case are of a mixed type, including claims for economic damages (i.e., loss of earnings, benefits, etc.) and also for personal injury (emotional distress). As the above authorities show, even the portion of plaintiff's claim for personal injury is included within the bankruptcy estate. There is no suggestion that the other portions of plaintiff's claim are not equally the property of the bankrupt estate. (See, e.g., Harris, supra, 114 B.R. 647, 648 [age and sex discrimination claim property of bankruptcy estate].) Whether plaintiff might be entitled to an exemption for some portion of her claim from the bankruptcy court is an issue into which we need not delve. (Cf. Haaland v. Corporate Management, Inc. (S.D.Cal. 1989) 172 B.R. 74 [discussing personal injury exemption set forth in Code of Civil Procedure section 704.140].) It is enough to have determined that plaintiff's claim was the property of her bankruptcy estate, and that plaintiff consequently lacked standing to bring this action. (Cf. Bostanian v. Liberty Savings Bank (1997) 52 Cal.App.4th 1075, 1079 [although Chapter 11 debtor-in-possession has standing to sue, Chapter 7 debtor lacks such standing]; In re Louden (E.D.Ky. 1989) 106 B.R. 109 [since there is no debtor-in-possession in Chapter 7 case, debtor has no standing to sue].)
Plaintiff could theoretically regain her lost standing to pursue her claims against Northrop if her claims were abandoned by the bankruptcy trustee. (See, e.g., Harris, supra, 114 B.R. at p. 648.) Property of a bankruptcy estate can be abandoned by three methods: (1) After notice and hearing, the trustee may unilaterally abandon property that is "burdensome or of inconsequential value" (11 U.S.C. § 554(a)); (2) After notice and hearing, the court may order the trustee to abandon such property (11 U.S.C. § 554(b)); (3) Any property which has been scheduled, but which has not been administered by the trustee at the time of closing of a case, is abandoned by operation of law. (11 U.S.C. § 554(c).)
Plaintiff did not contend or plead that her claims against Northrop were abandoned by the trustee either unilaterally or pursuant to court order. Records which were judicially noticed revealed that plaintiff's claim against Northrop was not listed on the asset schedules she filed with the bankruptcy court. Property that is neither abandoned nor administered by the bankruptcy trustee remains property of the bankruptcy estate. (11 U.S.C. § 554(d); see, e.g., Harris, supra, 114 B.R. at p. 649 [age and sex discrimination causes of action not susceptible to abandonment because not scheduled, hence remained property of bankruptcy estate]; Sierra Switchboard, supra, 789 F.2d 705 at pp. 709-710 [abandonment requires notice to creditors; emotional distress claim could not have been abandoned because there was no notice, therefore remained property of bankruptcy estate]; see also, e.g. extensive Discussion in Adams v. Manown (Md. 1992) 615 A.2d 611, 618-619.)
California Code of Civil Procedure section 367 requires, subject to exceptions not pertinent here, that every action be prosecuted in the name of the real party in interest. (See, e.g., Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, § 2:1 et seq.; 4 Witkin, Cal. Procedure (4th ed. 1997) § 103 et seq.) Plaintiff was not the real party in interest, and hence was not the proper party to pursue this claim -- i.e. she lacked "standing." (See Bostanian, supra, 52 Cal.App.4th at 1079, Weil & Brown, Cal. Practice Guide: Civi
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