Richards v. D. R. Horton, Inc.

MCMILLIAN, Judge. Mark A. Richards, pro se, filed the present appeal after the trial court dismissed his claims against his homebuilder D. R. Horton, Inc., various subcontractors and an insurance company (collectively referred to as appellees).1 We now conclude that the trial court erred by dismissing Richards’ claims against D. R. Horton, but affirm the dismissal of his claims against the remaining appellees. The pertinent facts, insofar as we can glean them from the voluminous record on appeal,2 show the following: In September 2010, Richards filed suit against D. R. Horton asserting claims based on the allegedly defective construction of his home. That case apparently was removed to federal district court, and in January 2011, Richards filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in which he disclosed his “fraud” suit against “D. R. Horton.” In June 2011, the district court concluded that, because of the bankruptcy filing, the trustee was now the real party in interest to prosecute the claims asserted in Richards’ negligent construction suit and dismissed the complaint without prejudice. [772] In late April 2011, the trustee entered a report of no distribution, and the bankruptcy court approved that report, discharged Richards and the trustee, and closed the estate by order dated July 19,2011. On August 25, 2011, Richards filed a “Complaint for Breach of Contract, Breach of Warranty, Fraud, Bad Intent and Improper Site Preparation” against the appellees in this appeal. Each of the appellees answered and moved to dismiss Richards’ claims, based in part on the doctrine of judicial estoppel and standing. On September 30, 2011, Richards filed a responsive pleading asserting, among other things, that appellees’ motions to dismiss should be denied because his bankruptcy case had been closed and his claims against the appellees abandoned back to him. The trial court rejected these contentions and dismissed Richards’ complaint, finding that he lacked standing to pursue his claims. Richards timely filed his notice of appeal from that order on March 13, 2012. Thereafter, on April 30, 2012, the United States Bankruptcy Court for the Northern District of Georgia entered an order on Richards’ motion to reopen his Chapter 7 case and for an order of abandonment. The bankruptcy court refused Richards’ request to reopen, noting that Richards had disclosed his claim “against his homebuilder,” the trustee had filed a report of no distribution on April 25, 2011, and the bankruptcy court discharged Richards and closed his case on July 19, 2011. Thus, the bankruptcy court concluded that, by operation of 11 USC § 554 (c), [Richards’] cause of action against D. R. Horton, Inc. was abandoned to [Richards] on July 19, 2011, is presently vested in [Richards] and [Richards] alone, and only [Richards] has the right to pursue this cause of action. The bankruptcy estate has no further interest in it. With this procedural backdrop in place, we now consider whether the trial court properly dismissed Richards’ complaint. 1. In his first, second, third and fifth enumerations of error, Richards makes various assertions concerning the merits of his underlying claims or other matters irrelevant to the disposition of the standing issue, which is the only issue before us. Thus, because these enumerations present nothing for this Court to review, we will not consider them. 2. We now turn to the pivotal issue in this case, which is whether the trial court erred by dismissing Richards’ complaint for lack of standing because his claims remained property of the bankruptcy estate. [773] D. R. Horton argues on appeal that there was no evidence in the record before the trial court that the trustee had abandoned the cause of action against it. Pertinent to this issue, the record shows that Richards’ claims against D. R. Horton were clearly disclosed in the schedules he filed with his bankruptcy petition and, under well-settled law, became part of the bankruptcy estate. Parker v. Wendy’s Intl., Inc., 365 F3d 1268 (11th Cir. 2004) (causes of action belonging to the debtor at the commencement of the bankruptcy case vest in the bankruptcy estate upon filing of the petition). Further, those claims were not “otherwise administered” by the trustee, who entered a report of no distribution. Cf. Period Homes, Ltd. v. Wallick, 275 Ga. 486 (569 SE2d 502) (2002) (bankruptcy estate closed by successful distribution). Based on this record, the starting point of our analysis is 11 USC § 554, which governs the abandonment of property of the bankruptcy estate. Subsection (c) provides in relevant part: “Unless the court orders otherwise, any property scheduled under section 521 (a) (1) of this title .. . not otherwise administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title . . . .” Thus, pursuant to 11 USC § 554 (c), Richards’ claims against D. R. Horton were abandoned back to him at the time his bankruptcy case was closed in July 2011. We, therefore, agree with the bankruptcy court that Richards, and Richards alone, had standing from that date forward to pursue this cause of action.3 Accordingly, at the time he filed the present action in August 2011, Richards had standing to pursue his claims against D. R. Horton and the trial court erred by dismissing his claims against that defendant. But we reach a different result concerning the dismissal of Richards’ claims against the remaining appellees. These claims, like Richards’ claims against D. R. Horton, all related to the negligent construction of his home, clearly accrued prior to the filing of his bankruptcy petition, and therefore became an asset of the bankruptcy estate when Richards filed his petition. Parker v. Wendy’s Intl., 365 F3d at 1272. However, unlike his claims against D. R. Horton, Richards did not list his claims against these appellees on his bankruptcy schedule, and this “[f]ailure... leaves that interest in the bankruptcy estate.” Id. Further, Richards’ attempt to re-open the case after it was closed was unsuccessful. Thus, it appears that Richards only had standing to pursue his claims against D. R. Horton, [774] and his claims against the remaining appellees were properly dismissed. Kittle v. ConAgra Poultry Co., 247 Ga. App. 102, 106-107 (1) (543 SE2d 411) (2000); see also Sevostiyanova v. Tempest Recovery Svcs., Inc., 307 Ga. App. 868, 870-871 (1) (705 SE2d 878) (2011); Zahabiuon v. Automotive Finance Corp., 281 Ga. App. 55, 56 (1) (635 SE2d 342) (2006); Battle v. Liberty Mut. Fire Ins. Co., 276 Ga. App. 434, 436 (623 SE2d 541) (2005); Cochran v. Emory Univ., 251 Ga. App. 737, 738-739 (1), (2) (555 SE2d 96) (2001). Judge McFadden argues in his dissent, however, that instead of affirming the dismissal of Richards’ claims against the other defendants, “[w]e should vacate and remand for the trial court to conduct a hearing to determine whether Richards sufficiently itemized his claims to put the trustee on notice to investigate further, . . . , and whether Richards had a motive to conceal his claims.” But, unlike the cases cited by the dissent, this case does not involve the use of a mere “misnomer,” which nevertheless clearly identified the defendant (Kuehn v. Cadle Co., 2007 U. S. Dist. LEXIS 18387 (M.D. Fla. 2007)), or an expansive identification of a claim related to a certain incident (In re Bonner, 2005 Bankr. LEXIS 1683 (BAP 6th Cir. 2005)), or actual notice of a claim (Donarumo v. Furlong, 660 F3d 81, 87 (1st Cir. 2011)).4 We are also unpersuaded that Richards’ motive or intent is relevant here. The trial court dismissed these claims based on lack of standing, not the doctrine of judicial estoppel, which, as the dissent acknowledges, is an equitable doctrine invoked at the court’s discretion. Thus, cases such as Reciprocal Merchandising Svcs. v. All Advertising Assoc., 163 BR 689 (S.D. N.Y. 1994), in which the court invoked that doctrine and then considered the debtor’s motive in failing to list the claim, are likewise unavailing. Further, unlike the plaintiff/debtor in Gingold v. Allen, 272 Ga. App. 653, 654 (613 SE2d 173) (2005), which Presiding Judge Miller cites in her separate dissent, Richards has already filed one motion to reopen in the bankruptcy court, and he did so after the trial court dismissed his claims based on lack of standing. Thus, we see no need to halt and delay the trial court proceedings to give Richards an additional opportunity to pursue another motion to reopen. However, we are mindful that Richards’ motion to reopen the bankruptcy estate was not included in the record on appeal. Thus, it is unclear to us whether Richards, who by all appearances was [775] proceeding pro se in filing that motion, appreciated the different positions occupied by D. R. Horton versus the other appellees based on how he listed his claims in his bankruptcy schedule, and it is likewise unclear to us whether his request to reopen would have alerted the bankruptcy court that he had additional claims against these defendants and that he was also seeking to have those claims abandoned back to him. Thus, while, unlike the dissents, we would not vacate the trial court’s dismissal of these claims to allow Richards to pursue an evidentiary hearing in the trial court or stay the proceedings to ensure that Richards gets another bite at the apple in the bankruptcy court, we would emphasize that nothing we say here prevents Richards from returning to the bankruptcy court and seeking clarification concerning the status of his claims against these defendants. It may well be that if these claims have not been adequately assessed by the trustee, the bankruptcy court will allow the case to be reopened for the purpose of either allowing the trustee to pursue those claims or abandoning the claims back to Richards, at which point he could seek to add the claims to his state court case. Otherwise, however, and based on clear authority, e.g., Kittle v. ConAgra Poultry, 247 Ga. App. at 106-107 (1), we find these claims were properly dismissed and no further proceedings are mandated on this issue. Judgment affirmed in part and reversed in part. Doyle, P. J., Ray and Branch, JJ., concur. Barnes, P. J., Miller, P. J., andMcFadden, J., concur in part and dissent in part. Footnotes [1] The remaining appellees are Murrell’s Construction Company, Andy Lewis Heating & Air-Conditioning, LLC, Raggahianti Foundations II, Inc., Dupree Plumbing Company, Executive Landscaping, Inc. and Grange Mutual Insurance Company. [2] We remind the parties that our rules require that citations to the record and transcripts must be to the appellate record, and must include the specific volume or part. Court of Appeals Rule 25 (a). [3] We are mindful that the trial court did not have the benefit of the bankruptcy court’s order when it dismissed Richards’ claims. [4] This Court has specifically considered and rejected the assertion that an unlisted claim may be deemed abandoned by operation of law even if the trustee has actual notice of the unlisted claim. Kittle v. ConAgra Poultry, 247 Ga. App. at 106-107 (1). See also Wright v. Vanderbilt Mtg. & Finance, Inc., 2009 Bankr. LEXIS 3564 *11, n. 8 (Bankr. N.M. 2009).