The Facts:
Sometime in January 1990, a debtor shot and killed her husband (the decedent). Thereafter, the daughter of the decedent and Administratrix of the decedent’s estate filed a wrongful death claim in Texas State Court. Under the Texas wrongful death statute, the daughter as Administratrix (in charge with the estate administration), was required to bring and prosecute the action because none of the children and parents of the deceased began such an action within three months after the decedent’s death.
A New York Criminal Lawyer said that on 2 March 1995, the debtor commenced bankruptcy proceedings. The daughter in her capacity as Administratrix, filed an Adversary Complaint in the Bankruptcy Court objecting to the dischargeability of debts owing to the wrongful death beneficiaries. The daughter based the objection upon the debtor’s willful and malicious acts which are not dischargeable. In the complaint only the daughter, as Administratrix, was named as plaintiff in the caption. However, all wrongful death beneficiaries were named within the body of the complaint.
On 18 May 1995, the debtor filed an original answer to the complaint to determine the dischargeability of debts. On 30 June 1995, the debtor received a discharge of all debts. On 28 July 1995, the district court withdrew the bankruptcy reference. A New York Criminal Lawyer said that on 18 March 1998 the debtor, filed an amended answer to the complaint to determine the dischargeability of debts and a motion for summary judgment alleging that the daughter, as Administratrix, lacked standing to bring a complaint objecting to the discharge; that the daughter, in that capacity, was not a creditor to whom payment is owed and, therefore, not a real party in interest.
The daughter filed an answer to the motion for summary judgment asserting that, as Administratrix, she had standing to bring the nondischargeability complaint and praying alternatively for an opportunity to join the wrongful death beneficiaries as proper party plaintiffs.
On 6 August 1998, the district court granted summary judgment for the debtor and issued a “take nothing” final judgment; that the daughter, as Administratrix, was not a creditor of the debtor and is not a proper party plaintiff to bring the nondischargeability complaint; the plea for joinder was denied as untimely and for the reason of plaintiff’s standing in the case.
Consequently, the daughter appeals the said decision.
The Ruling:
As a rule, exceptions to discharge should be construed in favor of debtors in accordance with the principle that provisions dealing with this subject are remedial in nature and are designed to give a fresh start to debtors unhampered by pre-existing financial burdens. However, bankruptcy courts are not to be used as a haven for wrongdoers. Rather, one of the primary purposes of the Bankruptcy Act is to relieve the honest debtor from the weight of oppressive indebtedness and permit him to start afresh. Moreover, bankruptcy and state law are accommodated by a judicially created concept of deference to state policies that do not conflict with federal law.
The law provides that the debtor shall be discharged from a debt unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt is exempt from discharge. The only requirement for standing to bring a nondischargeability action is that the action must be brought by a creditor. A creditor, as defined by law, is an entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor. A claim is defined as a right to payment, whether or not such right is reduced to judgment.
Here, the daughter, as Administratrix of the estate of the deceased, has been granted a claim and the right to payment against the debtor by state law. A New York Drug Possession Lawyer said the court finds that the daughter is a creditor with standing to object to the discharge of the Texas wrongful death claim.
Bankruptcy Rule 7017 provides that Rule 17 applies in adversary proceedings. The first sentence in Rule 17 states that while every action shall be prosecuted in the name of the real party in interest, an executor or administrator may sue in that person’s own name without joining the party for whose benefit the action is brought. This provision authorizes an executor or administrator to bring suit as the real party in interest on behalf of a decedent’s estate. Rule 17(a) designates executors and administrators as real parties in interest who need not join as plaintiffs the persons for whose benefit the wrongful death action is brought, when state substantive law vests control of the suit in that fiduciary. The second sentence of Rule 17(a) states that a party authorized by statute may sue in that person’s own name without joining the party for whose benefit the action is brought. Thus, a New York Sex Crimes Lawyer said an entity is the real party in interest when it is statutorily authorized to bring suit to enforce a claim. The statutory right to sue must stem from the substantive law controlling the action and may be granted by either state or federal law. In the instant case, the Texas wrongful death statute is the substantive law that controls and grants the Administratrix the right to sue.
Absent a direct expression of Congress prohibiting a nondischargeability action by an administratrix, the normal rules of civil procedure, including Rule 17(a), are to be applied. In making Rule 17(a) applicable to adversary proceedings in bankruptcy, Rule 7017 makes no exception with respect to nondischargeability actions. Section 523(c) is likewise silent in this regard. As the Supreme Court stated in an analogous context, the court does not find in 523(c) the necessary clear expression of congressional intent to exempt actions brought under that statute from the operation of the Federal Rules of Civil Procedure.
Thus, the daughter, as Administratrix, was authorized by both Texas and federal statutory law to sue on behalf of the wrongful death beneficiaries in both the wrongful death action and in the nondischargeability action without the necessity of naming them as plaintiffs.
In sum, the daughter is in her own right a creditor to whom such wrongful death debt is owed under the Bankruptcy Code for purposes of 523(c) and has standing to object to the discharge of the wrongful death claims in bankruptcy. Hence, the daughter has standing to bring the nondischargeability complaint as Administratrix. Accordingly, the dismissal is reversed, and the case is remanded for further proceedings. The court need not reach or consider the possible application of the ratification and joinder provisions of Rule 17(a).
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