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JOY JORDAN, Plaintiff and Appellant, v. BERMAN, BERMAN & BERMAN, LLP, Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
Plaintiff and appellant Joy Jordan (Jordan) appeals from a trial court judgment entered in favor of defendant and respondent Berman, Berman & Berman, LLP (Berman) following Berman's successful motion for summary judgment. We conclude that Jordan lacks standing to pursue this appeal. Accordingly, her appeal is dismissed.
FACTUAL AND PROCEDURAL BACKGROUND
Jordan's Complaint
In 2003, Jordan began working for Berman. In 2006, her employment was terminated. On March 11, 2008, plaintiff filed an 11–cause of action complaint against Berman.
Berman's Motion for Summary Judgment
Berman filed a motion for summary judgment, and on July 24, 2009, the trial court granted that motion.
Jordan Files a Petition for Bankruptcy
On the same date that the trial court granted Berman's motion for summary judgment, Jordan filed a petition for protection under Chapter 7 of the United States Bankruptcy Code. While her civil complaint is not listed as an asset in the bankruptcy schedules, it is noted on her statement of financial affairs.
State Court Judgment
On February 11, 2010, judgment was entered in favor of Berman and against Jordan.
Appeal; Proceedings in the Court of Appeal
On March 23, 2010, Jordan appealed the state court judgment.
On June 8, 2010, Berman filed a motion to dismiss Jordan's appeal. Berman argued that upon the filing of Jordan's Chapter 7 petition, a bankruptcy trustee was appointed and the instant chose in action (from which this appeal stems) became the sole property of the trustee. Because the appeal was not being maintained by the real party in interest (the trustee), and because the trustee had not abandoned the chose in action, Berman urged us to dismiss Jordan's appeal.
On July 15, 2010, we issued the following order: “[Jordan's] cause of action is property of the bankruptcy estate, and there is no evidence the Chapter 7 trustee has abandoned the interest in this claim. [Citation.] [Jordan] shall have 30 days from the date of this order in which to secure an abandonment of this cause of action in the bankruptcy court pursuant to 11 United States Code section 554. If [she] fails to timely secure an abandonment and absent any intervening order of this court, the appeal shall be dismissed 31 days from the date of this order.”
Jordan never secured an abandonment of the chose in action, but a dismissal of the appeal was never entered. Thus, on August 25, 2010, Berman sent a letter to the Court of Appeal asking that Jordan's appeal be dismissed pursuant to the July 15, 2010, order.
On August 26, 2010, the Court of Appeal issued an order, indicating that on August 20, 2010, it had the discharge of debtor form that was filed in Jordan's bankruptcy case. It also denied Berman's motion to dismiss.
Jordan's appeal was then fully briefed. In its respondent's brief, Berman argues, inter alia, that Jordan lacks standing to prosecute this appeal.
DISCUSSION
“Upon the filing of a petition for bankruptcy all of the debtor's assets, including any interest in a cause of action, pass to the trustee in bankruptcy. [Citations.] An appeal is a continuation of a cause of action.” (People v. Kings Point Corp. (1986) 188 Cal.App.3d 544, 548.)
“A trustee in bankruptcy is the representative of the estate. [Citation.] A trustee in bankruptcy has the capacity to sue and to be sued. [Citation.] Under federal decisional authority, a chapter 7 debtor may not prosecute on his or her own a cause of action belonging to the bankruptcy estate unless the claim has been abandoned by the trustee. [Citations.]” (Bostanian v. Liberty Savings Bank (1997) 52 Cal.App.4th 1075, 1080–1081, fns. omitted.) “There is decisional authority in California which is consistent with federal law. That is, absent abandonment of the claim by the trustee, a debtor out of possession has no standing to prosecute a cause of action which has passed to the bankruptcy estate.” (Id. at p. 1081.) In other words, “[u]ntil the debtor secures an abandonment of the claim, the debtor lacks standing to pursue it.” (Id. at p. 1083; see also Curtis v. Kellogg & Andelson (1999) 73 Cal.App.4th 492, 506.)
Here, as soon as Jordan filed her petition for protection under chapter 7, her causes of action against Berman became property of the bankruptcy estate; only the bankruptcy trustee could prosecute the causes of action, including the appeal, unless he abandoned them. Despite requests from the Court of Appeal, Jordan never presented evidence that the trustee abandoned the claims raised in this action. Thus, Jordan has not shown that she has standing to prosecute this appeal. Accordingly, we hereby vacate our order of August 26, 2010, and grant Berman's motion to dismiss on the grounds that Jordan lacks standing.
Jordan argues that because the trustee filed a report of no distribution, and he has no further duties in the bankruptcy case, she has standing to prosecute this appeal. Jordan offers no legal authority to support her position. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.) And, well-established legal authority indicates that the contrary is true: “[I]t is irrelevant to the issues on appeal whether a no asset report was filed, since such a filing would not have effected an abandonment of estate property pursuant to [11 United States Code] section 554.” (Moldo v. Clark (In re Clark) (9th Cir.2001) 266 B.R. 163, 166, fn. 5.)
DISPOSITION
Jordan's appeal is dismissed. Berman is entitled to costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
ASHMANN–GERST
We concur:
_, P.J. _, J. BOREN DOI TODD
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Docket No: B223259
Decided: November 30, 2011
Court: Court of Appeal, Second District, California.
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