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Robson v. Texas Eastern Corp.8/15/2005
dillac, 337 F.3d at 321; see also Boucher, 498 N.E.2d at 404 (a successful reopening motion suggests the trustee would not have abandoned the claim were he properly made aware of it); contra Johnson, 478 S.E.2d at 652-53 (three judges dissenting); Murray, 248 B.R. at 487-88.
More importantly, Black-as the trustee in charge of the oversight of the Robsons' bankruptcy estate-emphatically and unambiguously asserts that the Robsons not only scheduled in good faith but actually complied with bankruptcy's full disclosure requirement. Appellants' App. pp. 401-02. The Robsons can hardly be blamed for following their bankruptcy trustee's practice and procedure.
B. Motive to Conceal
TEC claims the Robsons had motive to conceal their personal injury claims so that the proceeds from those claims would go to the Robsons personally and not to their unsecured creditors. Br. of Appellee at 11. However, it is far from certain that the Robsons would have benefited by concealing their personal injury claims.
Had the Robsons' case settled during bankruptcy , all of the remaining funds- after the deduction of attorney fees and advanced costs-would have been immediately turned over to their Chapter 13 trustee for disbursement. As stated by Black:
Question: Where in any of these papers, Mr. Black, is there a reference to the proceeds from the personal injury claims.
Black: It's reference to a suit. You have- no where have I seen any document that had two different lawsuits. There's one lawsuit, one thing where I get all the money from. Now, if there's two lawsuits, I'm at a true loss. But if there's just one lawsuit, it's pretty clear that I require all the money turned over. [The Robsons] agreed to do that, did not conceal anything, did not try to strip out anything.
Appellants' App. p. 322 (emphasis added). As all of any possible settlement award-for personal injury or otherwise-would have been turned over to Black for disbursement to the Robsons' creditors, the Robsons' alleged motive to conceal is far from established.
TEC attempts to counter Black's notation by asserting that the Robsons' claim did not settle during bankruptcy and, thus, the turning over of the proceeds of a possible settlement is not entirely dispositive of the Robsons' motive. However, under Chapter 13-unlike Chapter 7-the debtor pays his debts over time by establishing a court approved plan while leaving the debtor in possession of the bankruptcy estate. Cable v. Ivy Tech State Coll., 200 F.3d 467, 472 (7th Cir. 1999) (citing 11 U.S.C. § 1303). Furthermore, a Chapter 13 payment plan usually does not last longer than three years and cannot last longer than five years. 11 U.S.C. § 1322(d).
Black specifically decided to allow the Robsons to independently control the litigation at bar because of the likely expense and amount of time involved in its pursuit. Appellants' App. p. 402. The Robsons filed for Chapter 13 protection on August 25, 1999, and the Robsons' bankruptcy estate was closed on June 6, 2003. Because the Robsons' complaint did not produce income within the Chapter 13 time period, the Robsons' unsecured creditors would not have received a benefit from the Robsons' personal injury claims regardless of how they were scheduled.
C. The Robsons' Rebuttal Evidence
The Robsons assert Black's knowledge of their personal injury claims establishes that their scheduling was done in good faith. Br. of Appellant at 20-21 (citing Appellants' App. pp. 378-79; Sports Page, Inc. v. First Union Mgmt., Inc., 438 N.W.2d 428, 431-32 (Minn. Ct. App. 1989) (where the trustee is aware of the claim, as indicated by an abandonment doc
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