Schlotzhauer v. Morton , 224 Md. App. 72 ( 2015 )


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  •                REPORTED
    IN THE COURT OF SPECIAL APPEALS
    OF MARYLAND
    No. 49
    September Term, 2014
    CINDY L. SCHLOTZHAUER
    v.
    KEVIN MORTON, JR., ET AL.
    Meredith,
    Arthur,
    Leahy,
    JJ.
    Opinion by Arthur, J.
    Filed: July 30, 2015
    This appeal concerns an intersection of federal bankruptcy law and Maryland civil
    procedure. The appeal specifically concerns the identity of the real party in interest and
    the effect of the statute of limitations, including the doctrine of relation back, when a
    person has been divested of the right to pursue a tort claim because of a bankruptcy filing,
    but later reacquires that right by operation of bankruptcy law.
    When a person files for protection from creditors under federal bankruptcy law, all
    of the person’s property, including personal injury claims, become the property of the
    bankruptcy estate. See 11 U.S.C. § 541(a); see also Adams v. Manown, 
    328 Md. 463
    , 477
    (1992); Bowie v. Rose Shanis Fin. Servs., LLC, 
    160 Md. App. 227
    , 235 (2004); Pacific
    Mortgage and Inv. Group, Ltd. v. Horn, 
    100 Md. App. 311
    , 319 (1994). Those rights
    become the property of the estate even if the person intentionally, inadvertently, or
    innocently fails to disclose them to the trustee, the bankruptcy court, and the creditors.
    See 
    Adams, 328 Md. at 478
    ; 
    Bowie, 160 Md. App. at 246-47
    .
    Generally, the bankruptcy trustee alone may assert that person’s rights, including
    the right to pursue a tort claim for personal injuries, unless the trustee abandons the rights
    (see 11 U.S.C. § 554; 
    Horn, 100 Md. App. at 319-21
    ) or the bankruptcy court declares
    them to be exempt from creditor claims. 11 U.S.C. § 522(b); 
    Bowie, 160 Md. App. at 249
    . If the rights have not been abandoned or exempted, the bankruptcy trustee retains
    the sole right to assert them even after the bankruptcy court has closed the bankruptcy
    case and granted the debtor a discharge. See, e.g., 
    Adams, 328 Md. at 478
    ; 
    Bowie, 160 Md. App. at 246-47
    .
    In this case, appellant Cindy Schlotzhauer filed for bankruptcy protection a few
    months after she suffered personal injuries in an automobile accident. In her bankruptcy
    filings, however, Schlotzhauer neither disclosed her personal injury claim nor asserted
    that it was exempt from the claims of her creditors. Consequently, her bankruptcy trustee
    did not abandon the claim, and the court did not declare it to be exempt. Instead, even
    after the bankruptcy court discharged her debts and closed her case, the claim remained
    the property of her estate, which her trustee alone could assert.
    After emerging from bankruptcy, Schlotzhauer asserted the personal injury claim
    in the Circuit Court for Queen Anne’s County. Her adversaries, appellees Kevin Morton
    Jr. and Uni-Select USA, Inc. (collectively “Uni-Select”), moved for summary judgment
    on the ground that she had no right to assert the claim because it belonged to her
    bankruptcy trustee. Schlotzhauer responded by promptly returning to the bankruptcy
    court, reopening her case, disclosing the personal injury claim, and obtaining a ruling that
    the claim was exempt from the claims of her creditors and had been revested in her.
    Nonetheless, on the same day that the bankruptcy court docketed the ruling in
    which it declared the claim to be exempt and to have been revested in Schlotzhauer, the
    circuit court, which was unaware of the bankruptcy court’s decision, granted Uni-Select’s
    motion for summary judgment. In a motion to alter or amend, Schlotzhauer apprised the
    circuit court both of the bankruptcy court’s decision and of a subsequent decision in
    which the bankruptcy court ruled that the personal injury claim had been revested in her
    -2-
    by operation of federal bankruptcy law before she even commenced this case.
    After the circuit court denied the motion to alter or amend, Schlotzhauer took this
    timely appeal.
    Q UESTION P RESENTED
    Schlotzhauer asks this Court to consider five interrelated questions, of which it is
    necessary only to consider one: Did the circuit court err in denying Schlotzhauer’s motion
    to alter or amend the court’s judgment? Because we answer that question in the
    affirmative, we reverse the judgment.1
    1
    Schlotzhauer’s brief presented the questions in the following form:
    1.       Did the Circuit Court err in not staying the action pursuant to the
    Court of Appeal’s directions in Adams v. Manown, 
    328 Md. 463
    [,]
    
    615 A.2d 611
    (Md. 1992) for Bankruptcy Court evaluation and
    resolution of the bankruptcy issues?
    2.       Did the Circuit Court err in refusing to accept the Bankruptcy
    Court’s acceptance of the Appellant’s innocent error and decreeing
    nunc pro tunc the effectiveness of Appellant’s Schedules B and C as
    of October 6, 2010, more than two (2) years prior to her filing suit?
    3.       Did the Circuit Court err in refusing to recognize the Appellant’s
    Complaint when filed by her on December 27, 2012 was proper and
    that the Queen Anne’s County Circuit Court then had subject matter
    jurisdiction?
    4.       Did the Circuit Court err in ruling on the Summary Judgment Motion
    prematurely?
    5.       Did the Circuit Court err in denying the Motion to Alter or Amend?
    -3-
    F ACTUAL AND P ROCEDURAL H ISTORY
    A.     The Underlying Complaint and Initial Bankruptcy Proceedings
    On January 4, 2010, a car driven by Schlotzhauer collided with another vehicle in
    the parking lot of a post office in Centreville, Maryland.
    On October 6, 2010, Schlotzhauer filed a voluntary petition for Chapter 7
    bankruptcy in the United States Bankruptcy Court for the District of Maryland. On the
    schedules accompanying her petition, Schlotzhauer did not list any potential claim arising
    from the automobile accident as an asset, nor did she claim an exemption for that asset.
    On January 19, 2011, the bankruptcy court granted Schlotzhauer a discharge from her
    debts and closed the case.
    Nearly three years after the automobile accident, on December 27, 2012,
    Schlotzhauer filed a complaint against Uni-Select in Circuit Court for Queen Anne’s
    County. Uni-Select answered and elected for a jury trial. The answer included a general
    denial of the allegations in Schlotzhauer’s complaint and asserted that the complaint
    failed to state a cause of action upon which relief may be granted, as well as several
    affirmative defenses.2
    2
    Although Uni-Select moved for summary judgment on the ground that
    Schlotzhauer lacked standing, the answer did not include any averment that Schlotzhauer
    lacked the capacity to sue. But see Md. Rule 2-323(f) (requiring an answer to contain
    certain “negative defenses,” including “the capacity of a party to sue or be sued”). If such
    defenses are “not raised by negative averment, these matters are admitted for the purpose
    of the pending action.” Id.; see also Thomas v. Capital Med. Mgmt. Assocs., LLC, 189
    (continued...)
    -4-
    B.     Motion for Summary Judgment and Reopening of Bankruptcy Case
    After discovery, which included a deposition of Schlotzhauer both about the merits
    of the case and her bankruptcy, Uni-Select moved for summary judgment on August 23,
    2013. In its motion, Uni-Select asserted that Schlotzhauer had not scheduled her claim in
    the bankruptcy case and that her bankruptcy trustee had not abandoned it. Uni-Select also
    asserted that Schlotzhauer’s bankruptcy trustee alone could prosecute the claim and that
    Schlotzhauer had no “standing.”
    Promptly thereafter, on September 12, 2013, Schlotzhauer moved the bankruptcy
    court to reopen her Chapter 7 case so that she could file amended schedules that disclosed
    the personal injury claim and obtain a declaration that the claim was exempt from the
    claims of her creditors. Uni-Select moved to intervene in the bankruptcy case to oppose
    the reopening of the case.
    Meanwhile, Schlotzhauer opposed Uni-Select’s motion for summary judgment and
    moved the circuit court to stay its decision until the bankruptcy court had ruled.
    On October 24, 2013, the bankruptcy court ordered that the bankruptcy case be
    reopened for the filing of amended schedules of assets. On that same date, Schlotzhauer
    filed the amended schedules, listing her claim for “personal injury damages” with the
    value of $1.5 million and claiming that the property was exempt pursuant to section
    2
    (...continued)
    Md. App. 439, 454-58 (2009).
    -5-
    11-504(b)(2) of the Courts and Judicial Proceedings Article.3 Uni-Select opposed the
    amended schedules.
    Schlotzhauer promptly notified the circuit court that she had reopened the
    bankruptcy case, and she requested a stay of the circuit court proceedings. On October
    29, 2013, the circuit court ordered that Schlotzhauer’s motion to stay and Uni-Select’s
    motion for summary judgment would be held sub curia for 30 days, “to permit [the]
    parties to address matters of bankruptcy jurisdiction and to permit [the] parties to
    supplement their motions[.]” At a motions hearing held on December 5, 2013,
    Schlotzhauer requested, as an alternative remedy, that the court permit the bankruptcy
    trustee to be added as a co-plaintiff.
    C.     The Bankruptcy Court’s Initial Ruling
    The bankruptcy court issued its ruling regarding Schlotzhauer’s amended
    schedules at a hearing on January 7, 2014. The court held, first, that Uni-Select lacked
    standing to object to the amendment of the schedules in Schlotzhauer’s bankruptcy case,
    3
    The bankruptcy code sets forth a list of items that a debtor may exempt from the
    property of the estate (see 11 U.S.C. § 522(b)), but also permits each state to opt out of
    the federal scheme and to enact a set of exemptions for its own citizens. In re Dobbins,
    
    249 B.R. 849
    , 851 & n.3 (Bankr. D. Md. 2000). Maryland has opted out of the federal
    scheme. 
    Id. n.3; see
    Md. Code (1974, 2013 Repl. Vol., Supp. 2014) § 11-504(g) of the
    Courts and Judicial Proceedings Article (“CJP”). “[T]herefore Maryland residents who
    file bankruptcy are limited to the exemptions provided under state statutory law.” In re
    
    Dobbins, 249 B.R. at 851-52
    . These exemptions include the exemption in CJP section
    11-504(b)(2) for “money payable in the event of sickness, accident, injury, or death of any
    person, including compensation for loss of future earnings.”
    -6-
    because Uni-Select was not a creditor or otherwise affected by the distribution of the
    bankruptcy estate. In the absence of any valid objection to the amended schedules, the
    bankruptcy court concluded that Schlotzhauer’s exemption “became allowed 31 days after
    the Debtor’s Amended Schedule C was filed[,]” i.e., on November 26, 2013. “After the
    allowance of the exemption, [the asset] belonged and belongs to the Debtor.”
    The bankruptcy court’s written order was docketed the next day, January 8, 2014.
    D.     Circuit Court’s Summary Judgment Order and Opinion
    Although the bankruptcy court had just ruled that Schlotzhauer had reacquired the
    personal injury claims as of November 26, 2013, and thus had the right to assert them as
    of that date, the circuit court reached a contrary conclusion on the same day that the
    bankruptcy court’s order was docketed. Unaware of the bankruptcy court’s near-
    simultaneous decision that the claims had been revested in Schlotzhauer, the circuit court
    granted Uni-Select’s motion for summary judgment on the “threshold jurisdictional issue”
    that Schlotzhauer lacked “standing.”
    On the merits, the court phrased the issue as: “who owns the cause of action and is
    entitled to pursue that cause of action to judgment.” Relying primarily on Bowie v. Rose
    Shanis Financial Services, LLC, 
    160 Md. App. 227
    (2004), a case in which the plaintiff
    had neither scheduled his claim, nor requested an exemption, nor obtained a
    determination that the claim was exempt from creditor claims as Schlotzhauer had, the
    circuit court reasoned “[t]he Plaintiff’s Bankruptcy Estate currently owns this cause [of]
    -7-
    action.” The court further reasoned that the mere reopening of the bankruptcy case did
    not “cure the issue of standing” on its own, but that Schlotzhauer “must wait until the
    owner of the cause of action,” the trustee, “makes a decision whether to pursue that
    action.” The court admitted that Schlotzhauer’s request for a stay had “some foundation
    in common sense,” but concluded that a stay was not required.
    In a footnote in the final paragraph of the opinion, the court addressed whether to
    “dismiss the action without prejudice, and then allow the Bankruptcy Estate to pursue the
    claim.” The court reasoned that, because the three-year statute of limitations had already
    expired, “an amended complaint would be barred at this point.” But see Md. Rule 2-201
    (providing that joinder or substitution of real party in interest has “same effect as if the
    action had been commenced in the name of the real party in interest”).
    On the same day that the court issued its opinion and order, Schlotzhauer filed a
    line, notifying the court that the bankruptcy court had confirmed the exemption and
    decreed that the claim had been revested in her as of November 26, 2013.
    E.     The Reconsideration Motions
    In an apparent response to the circuit court’s statement that limitations would bar
    her from asserting her claims unless she could show that she owned her claim when she
    first filed suit in December 2012, Schlotzhauer asked the bankruptcy court to reconsider
    its decision that she had reacquired her claims only as of November 26, 2013, the thirtieth
    day after the court had accepted her amended schedules. She specifically asked the
    -8-
    bankruptcy court to order that the amended schedules were effective nunc pro tunc on
    January 19, 2011, the date on which she was originally discharged from bankruptcy.
    At about the same time, on January 16, 2014, Schlotzhauer moved, pursuant to
    Maryland Rule 2-534, to alter or amend the order granting summary judgment against her.
    In the motion, Schlotzhauer asked the court to vacate the summary judgment and to hold
    the case open until the bankruptcy court had finally resolved the date on which she had
    reacquired her claim.
    F.     The Bankruptcy Court’s Second Decision
    On January 24, 2014, before the circuit court ruled on the motion to alter or
    amend, the bankruptcy court reconsidered its conclusion about the effective date of an
    exemption contained in a schedule that is filed after the commencement of a bankruptcy
    case. Quoting In re O’Brien, 
    443 B.R. 117
    , 131 (Bankr. W.D. Mich. 2011), the
    bankruptcy court concluded that, “‘[r]egardless of when an exemption is subsequently
    claimed by a debtor in the case, it must relate back’ . . . to the date of the petition” – i.e.,
    to the date on which the debtor filed for bankruptcy protection. “Accordingly,” the court
    concluded that “upon the allowance of the exemption” that Schlotzhauer claimed in her
    amended schedules, “the cause of action revested back to the Debtor and that revesting in
    law related back to the date of filing of the Petition in this bankruptcy case on October 6,
    2010.”
    In other words, as a matter of federal bankruptcy law, when the bankruptcy court
    -9-
    allowed the exemption that Schlotzhauer had claimed in her amended schedules, it was as
    though she had owned her claims all along.4
    With the bankruptcy court’s second ruling in hand, Schlotzhauer supplemented her
    motion to alter or amend. As a consequence of the bankruptcy court’s ruling, she argued,
    the ground for summary judgment no longer existed: the bankruptcy court had determined
    that she, and not (as the circuit court said) her trustee, owned her claims when she first
    filed this case.
    G.      The Circuit Court Ruling on the Post-Judgment Motion
    At a hearing on February 25, 2014, Uni-Select did not dispute that Schlotzhauer
    had “reacquired the right to bring this cause of action” through the bankruptcy court.
    Instead, Uni-Select contended that “she would necessarily have to file a new suit, a
    separate lawsuit, which would necessarily be barred by the statute of limitations.” Uni-
    Select reiterated its position that the original complaint “was a nullity and [the circuit
    court] lacked subject matter jurisdiction to do anything with it, other than dismiss it.”
    On February 27, 2014, the circuit court issued an order stating only that
    Schlotzhauer’s motion to alter or amend the judgment was denied. Schlotzhauer then
    noted a timely appeal on March 18, 2014.
    4
    Accord In re Gentry, 
    459 B.R. 861
    , 864 (Bankr. M.D. Fla. 2011) (“[i]n the case
    of amended claims of exemption, the amendment relates back to, and is effective as of,
    the petition date”); In re Ball, 
    201 B.R. 204
    , 207 (N.D. Ill. 1996); Christy v. Heights Fin.
    Corp., 
    101 B.R. 542
    , 543-44 (C.D. Ill. 1987).
    -10-
    S TANDARD OF R EVIEW
    Maryland Rule 2-534 permits parties to invoke the court’s revisory power:
    Motion to Alter or Amend a Judgment – Court Decision
    In an action decided by the court,[5] on motion of any party filed within ten
    days after entry of judgment, the court may open the judgment to receive
    additional evidence, may amend its findings or its statement of reasons for
    the decision, may set forth additional findings or reasons, may enter new
    findings or new reasons, may amend the judgment, or may enter a new
    judgment. . . .
    Pursuant to this Rule, the circuit court “has broad discretion whether to grant
    motions to alter or amend filed within ten days of the entry of judgment,” and “[i]ts
    discretion is to be applied liberally so that a technicality does not triumph over justice.”
    Benson v. State, 
    389 Md. 615
    , 653 (2005) (citing Maryland Bd. of Nursing v. Nechay, 
    347 Md. 396
    , 408 (1997)).
    An appellate challenge to a court’s ruling on a Rule 2-534 motion is typically
    limited in scope. Cent. Truck Ctr., Inc. v. Cent. GMC, Inc., 
    194 Md. App. 375
    , 397
    (2010) (quoting In re Julianna B., 
    179 Md. App. 512
    , 558 (2008), vacated, 
    407 Md. 657
    (2009)). “In general, the denial of a motion to alter or amend a judgment is reviewed by
    appellate courts for abuse of discretion.” RRC Northeast, LLC v. BAA Maryland, Inc.,
    
    413 Md. 638
    , 673 (2010) (citing Wilson-X v. Dep’t of Human Res., 
    403 Md. 667
    , 674-75
    5
    Within the meaning of this Rule, the phrase “action decided by the court”
    includes an action disposed of by a grant of summary judgment. Sieck v. Sieck, 66 Md.
    App. 37, 40 n.1 (1986).
    -11-
    (2008)). “The relevance of an asserted legal error, of substantive law, procedural
    requirements, or fact-finding unsupported by substantial evidence, lies in whether there
    has been such an abuse.” 
    Wilson-X, 403 Md. at 676
    .
    Nevertheless, a “court’s discretion is always tempered by the requirement that the
    court correctly apply the law applicable to the case.” Arrington v. State, 
    411 Md. 524
    ,
    552 (2009); see In re Adoption/Guardianship No. T97036005, 
    358 Md. 1
    , 24-25 (2000)
    (abuse of discretion where trial judge’s decision with respect to discretionary matter “was
    based on an error of law”); Guidash v. Tome, 
    211 Md. App. 725
    , 735 (2013) (abuse of
    discretion occurs when court “makes a decision based on an incorrect legal premise”);
    Brockington v. Grimstead, 
    176 Md. App. 327
    , 359 (2007) (“an exercise of discretion
    based upon an error of law is an abuse of discretion”).
    Consequently, in appeals from the denial of a post-judgment motion, reversal is
    warranted in cases where there is both an error and a compelling reason to reconsider the
    underlying ruling. E.g. Williams v. Hous. Auth. of Baltimore City, 
    361 Md. 143
    , 153
    (2000) (holding that it is abuse of discretion not to strike judgment and allow further
    proceedings where judgment was “based on a clear mistake” later brought to court’s
    attention); Wormwood v. Batching Sys., Inc., 
    124 Md. App. 695
    , 700-01 (1999) (holding
    that circuit court abused discretion in denying motion for reconsideration where appellant
    brought court’s attention to legal error previously made by court); Garliss v. Key Fed.
    Savings Bank, 
    97 Md. App. 96
    , 104-05 (1993) (holding that circuit court abused
    -12-
    discretion in denying motion to alter or amend that “should have alerted” hearing judge
    that movant was entitled to credit against judgment).
    When a party requests that a court reconsider a ruling solely because of new
    arguments that the party could have raised before the court ruled, the court has almost
    limitless discretion not to consider those argument. Steinhoff v. Sommerfelt, 144 Md.
    App. 463, 484 (2002). By contrast, when a party makes a prompt and timely request that
    a court reconsider a ruling because of a development that the party could not have raised
    before the court ruled, the court can and should reconsider its decision. See, e.g., Knish v.
    Stein, 
    347 F. Supp. 2d 682
    , 685-86 (D. Minn. 2004) (reconsidering dismissal of habeas
    corpus petition for lack of jurisdiction and deciding petition on merits because of
    intervening appellate decision that implicitly rejected premise of court’s earlier decision);
    Morrow v. Harkleroad, 
    258 F. Supp. 2d 418
    , 419 (W.D.N.C. 2003) (amending judgment
    and opinion to accommodate intervening change in law, which occurred when appellate
    court vacated earlier opinion on which court had relied); Quinones-Ruiz v. United States,
    
    873 F. Supp. 359
    , 361-62 (S.D. Cal. 1995) (reconsidering grant of summary judgment,
    and entering summary judgment against party who had prevailed in earlier ruling, because
    of intervening change in controlling law that occurred when appellate court announced
    new rule that affected case).6
    6
    Although these cases arise under Fed. R. Civ. P. 59, the pertinent Maryland Rule,
    Rule 2-534, is “an analog to Federal Rules of Civil Procedure 52(b) and 59(a),” and, in
    (continued...)
    -13-
    In the instant case, the circuit court properly exercised its discretion to consider the
    impact of the bankruptcy court’s orders. See In re Adoption/Guardianship of Joshua M.,
    
    166 Md. App. 341
    , 356 (2005) (holding “that Rule 2-534 accords the trial court discretion
    to consider admissible evidence of facts occurring after the date of entry of judgment
    when those facts are directly related to relevant facts arising between the date of trial and
    the date of entry of judgment”). The circuit court scheduled a hearing even though a
    hearing is typically not required for a motion to reconsider the grant of summary
    judgment. See Md. Rule 2-311(f); see also Lowman v. Consol. Rail Corp., 
    68 Md. App. 64
    , 75 (1986). Furthermore, the hearing transcript reflects that the court accepted the
    evidence of the post-judgment developments and considered the parties’ written
    arguments regarding the effect of the bankruptcy court’s decisions. The court specifically
    directed the parties to address the potential curative effect of the bankruptcy court’s
    orders. Uni-Select did not object to the consideration of “post-judgment” evidence, but
    instead maintained that the circuit court’s ruling was legally correct even in light of the
    outcome of the bankruptcy proceedings.
    Although the circuit court did not elaborate when it denied Schlotzhauer’s post-
    6
    (...continued)
    fact, “is more expansive than the federal rules.” Renbaum v. Custom Holding, Inc., 
    386 Md. 28
    , 44 (2005). The Court of Appeals has “long held that federal caselaw interpreting
    a Federal Rule of Civil Procedure is persuasive authority for the interpretation of a
    Maryland Rule patterned after the federal rule.” Phillip Morris USA, Inc. v. Christensen,
    
    394 Md. 227
    , 253 (2006).
    -14-
    judgment motion, the circumstances establish that the court credited the argument that
    Uni-Select was legally entitled to judgment even if Schlotzhauer had been revested with
    the right to assert her claim as of the date of her bankruptcy petition in 2010. See
    
    Wormwood, 124 Md. App. at 701
    (inferring from comments by court and arguments made
    by appellee that dismissal and denial of reconsideration rested on resolution of legal
    question). To the extent that the court’s ruling depended upon this purely legal
    determination, the scope of appellate review necessarily broadens. See Harrison-
    Solomon v. State, 
    216 Md. App. 138
    , 146 (2014) (in reviewing denial of motion to alter or
    amend for overall abuse of discretion, explaining that “[t]o the extent that our decision
    involves . . . questions of law, our review is de novo”); U.S. Life Ins. Co. of New York v.
    Wilson, 
    198 Md. App. 453
    , 463-64 (2011) (noting that, even though some arguments
    were raised on motion for reconsideration of summary judgment order, “[f]or all intents
    and purposes . . . we are reviewing all aspects of the summary judgment decision de
    novo”).
    Consequently, the focus of our review shifts. The central question becomes: after
    the circuit court exercised its discretion to consider the bankruptcy court’s rulings
    concerning when Schlotzhauer reacquired her claim, was the court correct in ruling that
    Uni-Select was still entitled to summary judgment?
    -15-
    D ISCUSSION
    A.      As a Matter of Federal Bankruptcy Law, Schlotzhauer Owned the
    Claim as of the Date of Summary Judgment
    A petition for bankruptcy, when filed by a debtor such as Schlotzhauer, “creates an
    estate . . . comprised of all . . . property,” including “all legal or equitable interests of the
    debtor in property at the commencement of the case.” 11 U.S.C. § 541(a)(1). This
    definition encompasses all kinds of tangible and intangible assets, including personal
    injury claims and including property that may be exempt under state law. See, e.g., In re
    Orso, 
    283 F.3d 686
    , 691 (5th Cir. 2002); In re Wischan, 
    77 F.3d 875
    , 877 (5th Cir. 1996);
    Tignor v. Parkinson, 
    729 F.2d 977
    , 980 (4th Cir. 1984). The estate is represented by a
    trustee, who has the capacity to file suit to assert the debtor’s claims. See 11 U.S.C. §
    323.
    The debtor must file a schedule of assets and liabilities at the time of the petition
    (11 U.S.C. § 521(a)(1)(B)(i); Fed. R. Bankr. P. 1007) and must list all property that the
    debtor claims as exempt. 11 U.S.C. § 522(l). A party in interest to the bankruptcy
    proceeding, in turn, may object to the debtor’s claims for exemptions. Fed. R. Bankr. P.
    4003(b)(1). “If an interested party fails to object within the time allowed, a claimed
    exemption will exclude the subject property from the estate[.]” Schwab v. Reilly, 
    560 U.S. 770
    , 775 (2010).
    Maryland residents can claim exemptions under state law, including an exemption
    “from execution on a judgment” that is “payable in the event of sickness, accident, injury,
    -16-
    or death of any person, including compensation for loss of future earnings.” CJP §
    11-504(b)(2); see In re Dobbins, 
    249 B.R. 849
    , 851-52 & nn. 3-4 (Bankr. D. Md. 2000).
    Debtors may amend or supplement their schedules as a matter of course before the
    bankruptcy case closes. Fed. R. Bankr. P. 1009(a). In addition, the bankruptcy court has
    discretion to reopen a case “to administer assets, to accord relief to the debtor, or for other
    cause.” 11 U.S.C. § 350; see Fed. R. Bankr. P. 5010; In re Thompson, 
    16 F.3d 576
    , 581
    (4th Cir. 1994). The bankruptcy court has discretion to permit a party to perform an act,
    such as the filing of amended asset schedules, even after the specified period in which the
    act is required or allowed to be done. Fed. R. Bankr. P. 9006(b)(1) (“the court for cause
    shown may at any time in its discretion for cause shown . . . on motion made after the
    expiration of the specified period permit the act to be done where the failure to act was
    the result of excusable neglect”). It was pursuant to these provisions that the bankruptcy
    court permitted Schlotzhauer to reopen her bankruptcy case, file amended schedules, and
    claim an exemption for her cause of action against Uni-Select.7
    7
    Both parties have debated the implications of the inaccurate schedules that
    Schlotzhauer originally filed with her initial bankruptcy petition. Schlotzhauer maintains
    that the omission of her personal injury claim was entirely innocent; Uni-Select responds
    that it was her sole responsibility as the debtor to ensure the accuracy of her schedules,
    which she submitted under penalty of perjury. Schlotzhauer’s culpability is ultimately
    irrelevant to this opinion. While that factor may have been important in the bankruptcy
    court’s discretionary decision to accept amended schedules after the closing of her case
    (see Fed. R. Bankr. P. 9006(b)(1)), it is not our prerogative to review that court’s exercise
    of discretion. Our review concerns only the effect of the bankruptcy court’s ultimate
    legal conclusion upon the action in the circuit court.
    -17-
    In granting summary judgment in Uni-Select’s favor on January 8, 2014, the
    circuit court asserted that the bankruptcy court had “not taken any action” yet and that the
    cause of action “currently” belonged to the bankruptcy estate. Unbeknownst to the circuit
    court, however, the bankruptcy court had just ruled that, after the allowance of the
    exemption, which took effect on November 26, 2013, the claim “belonged and belongs”
    to Schlotzhauer.
    In light of the bankruptcy court’s clear ruling on this principle of federal
    bankruptcy law, the circuit court’s contrary conclusion was legally incorrect, as was the
    accompanying grant of summary judgment. When Schlotzhauer brought the error to the
    circuit court’s attention, therefore, it was obligated to revisit its ruling and to consider the
    consequences of its unintended error. See 
    Williams, 361 Md. at 153
    ; 
    Wormwood, 124 Md. App. at 701
    ; see also 
    Garliss, 97 Md. App. at 105
    .8
    8
    In its initial grant of summary judgment, the circuit court had relied prominently
    on Bowie v. Rose Shanis Financial Services, LLC, 
    160 Md. App. 227
    (2004), in which
    this Court affirmed the entry of summary judgment against a bankrupt debtor who had
    never disclosed his claim in his bankruptcy case (id. at 232); whose claim was plainly not
    exempt from creditor claims (id. at 249); and who, in any event, had never sought (much
    less obtained) an exemption. 
    Id. Even before
    the bankruptcy court handed down its
    decisions concerning when Schlotzhauer reacquired her claim, Bowie was readily
    distinguishable from this case: Schlotzhauer disclosed her claim (albeit belatedly); she
    claimed an exemption; and she was very clearly entitled to the exemption. See CJP §
    11-504(b)(2). These factors placed Schlotzhauer’s claim “outside the bankruptcy estate
    the trustee is charged to administer.” Schwab v. Reilly, 
    560 U.S. 770
    , 800 (2010).
    -18-
    B.     Even if Schlotzhauer Filed Suit When She Had No Right to Assert the
    Claim, She Could Maintain the Suit Once She Reacquired the Claim
    In her post-judgment motion, Schlotzhauer brought the bankruptcy court’s initial
    decision to the circuit court’s attention and asked the court to correct its erroneous
    conclusion that the cause of action “currently” belonged to the bankruptcy estate. Uni-
    Select responded that, even if the cause of action had revested in Schlotzhauer before the
    grant of summary judgment, the decision was still correct because the statute of
    limitations had run by the time Schlotzhauer reacquired the claim in November 2013 (the
    injury having occurred more than three years earlier, on January 4, 2010). Uni-Select
    based its argument on the premise that, upon reacquiring the claim, Schlotzhauer was
    obligated to file a new complaint.
    While the circuit court credited that argument in granting summary judgment, and
    appears to have credited it in denying the post-judgment motion (see 
    Wormwood, 124 Md. App. at 701
    ), the argument has no support in Maryland law. Even if Schlotzhauer
    had no right to assert her personal injury claims from the time when she filed suit in
    December 2012 until November 26, 2013, the thirtieth day after the allowance of her
    exemptions, she acquired the right to continue and maintain the preexisting lawsuit
    asserting when she became vested with the right to assert those claims.
    In Pacific Mortgage and Inv. Group, Ltd. v. Horn, 
    100 Md. App. 311
    , 319-21
    (1994), Horn filed suit at a time when her bankruptcy trustee alone had the right to assert
    the claim, as did Schlotzhauer in this case. While Horn’s suit was pending, however, her
    -19-
    trustee closed the bankruptcy case and abandoned the claim (which Horn had disclosed).
    On those facts, this Court considered whether Horn could maintain the suit even though
    she was not initially “the proper party to bring the suit.” 
    Id. at 321.
    Quoting Barletta v. Tedeschi, 
    121 B.R. 669
    , 673 (N.D.N.Y. 1990), this Court
    rejected the proposition that the “‘premature filing’” of the complaint “‘is a bar to [the]
    continuation of the action now.’” 
    Horn, 100 Md. App. at 321
    . “‘When the trustee
    abandons estate property, the property stands as if no bankruptcy had been filed and the
    debtor enjoys the same claim to it as he held previous to the filing of the bankruptcy.’”
    
    Id. (quoting Barletta,
    121 B.R. at 673) (internal citations omitted). Accordingly, even
    though Horn did not have the right to assert her claims when she commenced the case,
    she could maintain the action after she acquired the right to assert those claims.
    Here, the trustee did not abandon the claim, as he did in Horn; rather, in the first
    decision, the bankruptcy court ruled that the claim was no longer the property of the
    bankruptcy estate because it was exempt from the claims of Schlotzhauer’s creditors.
    Nevertheless, the effect is exactly the same in both cases. Whether through abandonment
    by the trustee or through the allowance of the exemption by the bankruptcy court, the
    debtor reacquired her claim by operation of law; she was not required to file an entirely
    new action. To the extent that the circuit court based its rulings on a contrary conclusion,
    it was incorrect.
    -20-
    C.      When She Reacquired the Claim, Schlotzhauer Replaced the Trustee as
    the Real Party in Interest
    In procedural terms, Horn and Schlotzhauer were not the “real parties in interest”
    until they reacquired their claims; their bankruptcy trustees were.
    Md. Rule 2-201 addresses the requirement that an action be brought by the real
    party in interest:
    Every action shall be prosecuted in the name of the real party in
    interest, except that an executor, administrator, personal representative,
    guardian, bailee, trustee of an express trust, person with whom or in whose
    name a contract has been made for the benefit of another, receiver, trustee
    of a bankrupt, assignee for the benefit of creditors, or a person authorized
    by statute or rule may bring an action without joining the persons for whom
    the action is brought. When a statute so provides, an action for the use or
    benefit of another shall be brought in the name of the State of Maryland.
    No action shall be dismissed on the ground that it is not prosecuted in the
    name of the real party in interest until a reasonable time has been allowed
    after objection for joinder or substitution of the real party in interest. The
    joinder or substitution shall have the same effect as if the action had been
    commenced in the name of the real party in interest.
    In Adams v. Manown, 
    328 Md. 463
    , 480 (1992), the Court of Appeals confronted
    another bankruptcy-related case in which the action had “not been brought by the real
    party in interest.” In that unusual case, Adams had concealed a claim from his
    bankruptcy trustee and his creditors, filed suit to enforce the claim after he emerged from
    bankruptcy, and recovered a $43,000.00 judgment on it. On appeal, the Court of Appeals,
    on its own motion, recognized that the claim belonged to Adams’s bankruptcy estate even
    though the estate was closed (id. at 478), that Adams’s former trustee was the real party in
    interest (id. at 477), and that Adams himself lacked “standing.” 
    Id. at 480.
    -21-
    In those circumstances, the court allowed the bankruptcy trustee to substitute for
    Adams. 
    Id. at 480-81.
    The court did not require the trustee to file a new action. See 
    id. at 481
    (quoting P. Niemeyer and L. Richards, Maryland Rules Commentary 92 (1984)
    (“[u]nder Rule 2-201, ‘the real party in interest simply steps into the shoes of the plaintiff
    who commenced the action’”)).
    In light of Adams and Horn, Schlotzhauer became the real party in interest and was
    able to continue the action at least as of November 26, 2013, when the bankruptcy court’s
    first opinion said she reacquired her claim. Under neither case was she required to initiate
    a new action.
    Notwithstanding Adams and Horn, Uni-Select theorizes that Schlotzhauer’s
    complaint was a “nullity” that did not confer jurisdiction on the circuit court. Uni-Select
    makes a number of analogies, likening the premature complaint, among other things, to a
    complaint filed by a corporation that did not legally exist because of a forfeited charter.
    See, e.g., Tri-County Unlimited, Inc. v. Kids First Swim Sch., Inc., 
    191 Md. App. 613
    , 624
    (2010). The analogy is inapt. In the case of a complaint brought by a corporation that has
    forfeited its charter, the action is a nullity because no one has the right to assert the claim
    until the corporation reinstates its charter. In this case, by contrast, someone – namely,
    Schlotzhauer’s bankruptcy trustee – had the right to assert her claim all along. The
    problem here was not that no one had the right to assert the claim, but that the person who
    had the right – i.e., the real party in interest – was not before the court. When
    -22-
    Schlotzhauer remedied that problem by exempting her claims from the bankruptcy estate,
    she became the real party in interest and, under Adams and Horn, acquired the right to
    maintain the claim.
    D.     When Schlotzhauer Replaced the Trustee as Real Party in Interest, Her
    Rights Related Back to the Commencement of the Lawsuit
    Uni-Select, however, argued that limitations still barred Schlotzhauer from
    proceeding because she lacked “standing” (i.e., because she was not the real party in
    interest) on December 27, 2012, the date when she filed suit. Uni-Select fails to account
    for the operation of the doctrine of relation back.
    In Crowe v. Houseworth, 
    272 Md. 481
    (1974), the Court of Appeals held that a
    circuit court abused its discretion by denying a plaintiff’s request to join certain
    co-plaintiffs as necessary parties after the expiration of the statute of limitations. 
    Id. at 489.
    In that case, Crowe brought an action for trespass to real property (id. at 483), but
    the circuit court entered judgment against him on the ground that he owned the property
    jointly with eleven others whom he could not join because the statute of limitations had
    expired.
    On review, the Court of Appeals agreed that Crowe could not prosecute the action
    without joining the other joint tenants as parties. 
    Id. Nevertheless, the
    Court observed
    that Crowe himself had filed suit within the limitations period and that the joinder of the
    additional parties would affect “neither the gravamen of the action nor the measure of
    damages.” 
    Id. at 485.
    The Court adopted the modern view that the doctrine of relation
    -23-
    back should prevent the defendant, Houseworth, from invoking the statute of limitations
    to bar the joinder of the additional parties. 
    Id. at 485-86.
    The Court explained: “‘when a
    defendant has had notice from the beginning that the plaintiff sets up and is trying to
    enforce a claim against it because of specified conduct, the reasons for the statute of
    limitations do not exist, and we are of the opinion that a liberal rule should be applied.’”
    
    Id. at 489
    (quoting New York Cent. & Hudson River Railroad Co. v. Kinney, 
    260 U.S. 340
    , 346 (1922) (Holmes, J.)).
    Strictly speaking, this case does not involve the joinder of necessary parties after
    limitations has run; it involves Schlotzhauer’s accession to the status of the real party in
    interest after limitations has run. Nonetheless, the governing principles are the same.
    Uni-Select agreed that it “had notice from the beginning” that Schlotzhauer was “trying to
    enforce a claim against it because of specified conduct.” 
    Crowe, 272 Md. at 489
    .9
    In these circumstances, there is no reason why relation back should not apply. 
    Id. In other
    words, there is no reason why we should not treat the complaint as having been
    filed within the statute of limitations, even if, under the bankruptcy court’s first opinion,
    Schlotzhauer had no right to prosecute that complaint until November 26, 2013, after
    limitations had run. See Newman v. Enriquez, 
    171 Ohio App. 3d 117
    , 127-31 (Ct. App.
    9
    At oral argument, Schlotzhauer represented that Uni-Select’s insurer had received
    notice of the claim immediately after the accident and had paid for her property damage.
    Uni-Select agreed that it received notice of Schlotzhauer’s claim well within the
    limitations period.
    -24-
    2007) (employing doctrine of relation-back to reverse grant of summary judgment on
    limitations grounds where plaintiffs filed suit when their bankruptcy trustee was real party
    in interest, but became real parties in interest when trustee abandoned claim).
    This conclusion is supported by the procedure that the Court of Appeals devised in
    Adams v. Manown. In that case, the claim had accrued at some point before June 26,
    1989, when Adams filed suit to assert his putative rights. See 
    Adams, 328 Md. at 468-69
    .
    The Court of Appeals, however, did not hold that Adams lacked standing to assert his
    rights until almost three years and five months later, on November 23, 1992. Even then,
    the Court gave Adams’s trustee another 60 days to intervene in the case as the real party
    in interest. 
    Id. at 481.
    But although limitations would certainly have run by the time the
    trustee eventually intervened, the Court of Appeals was untroubled by the prospect of
    limitations, making no mention of it all. This is presumably because the Court understood
    that the substitution of the trustee would relate back to the filing of the original complaint.
    See Md. Rule 2-201 (“[t]he joinder or substitution [of the real party in interest] shall have
    the same effect as if the action had been commenced in the name of the real party in
    interest”).
    In dictating that a court must proceed as though the real party in interest had
    commenced the action even if he or she is not joined or substituted into the case until
    sometime thereafter, Rule 2-201 clearly envisions that the joinder or substitution relates
    back to the time of filing of the initial complaint. Yet, “[i]f the rule permits the
    -25-
    substitution of the real party in interest to relate back, avoiding the bar of the statute of
    limitations, logic dictates that it applies equally where the party commencing the action
    becomes the real party in interest during the pendency of the action.” Newman v.
    
    Enriquez, 171 Ohio App. 3d at 130
    .10
    It follows that, even under the bankruptcy court’s first order, in which
    Schlotzhauer was deemed to have reacquired her claims and to have become the real party
    in interest only as of November 26, 2013, her status as real party in interest related back
    to the filing of the initial complaint within the period of limitations on December 27,
    2012. It is, therefore, incorrect, as a matter of law, to assert that limitations would bar
    Schlotzhauer’s claims if she had reacquired them only as of November 26, 2013.
    Accordingly, when Schlotzhauer’s timely post-judgment motion informed the circuit
    court that it had based the grant of summary judgment on the erroneous premise that she
    had no right to assert her claims as of the date of summary judgment, the circuit court
    should have reconsidered its decision and rescinded the grant of summary judgment.11
    10
    We apply the doctrine of relation back in part because the real-party-in-interest
    rule does not serve the same purpose as the statute of limitations. Limitations protects
    defendants against stale claims (see Anderson v. United States, 
    427 Md. 99
    , 118 (2012)),
    while the real-party-in-interest rule protects defendants against multiple claims. See, e.g.,
    Rodriguez v. Compass Shipping Co., Ltd., 
    617 F.2d 955
    , 958 (2d Cir. 1980) (citing Fed.
    R. Civ. P. 17(a)).
    11
    What happened here is not substantially different from what might occur in other
    instances in which a party prematurely asserted a claim that the party later acquired by
    operation of law. E.g., Safeway Ins. Co. v. Collins, 
    192 Ariz. 262
    , 266-67 (Ct. App.
    1998) (holding that trial court erred in summarily dismissing premature tort claim filed by
    (continued...)
    -26-
    E.     As a Matter of Federal Bankruptcy Law, Schlotzhauer Owned the
    Claim as of the Filing of the Complaint
    Nonetheless, if any question remained as to Schlotzhauer’s ability to assert her
    claims, the bankruptcy court put it to rest in its second opinion on January 24, 2014. In
    that opinion, the bankruptcy court revised its earlier conclusion and ruled that, as a matter
    of federal bankruptcy law, the cause of action had become revested in Schlotzhauer upon
    the allowance of the exemption and that the revesting related back to the filing of her
    petition, on October 6, 2010. Even though Schlotzhauer retroactively acquired the claim
    by operation of law after she had filed suit, there is no serious question, in view of the
    bankruptcy court’s ruling, that under federal bankruptcy law Schlotzhauer owned her
    claim as of October 6, 2010, and that she had standing to assert the claim when she filed
    suit, within the three-year statute of limitations, on December 27, 2012.
    Schlotzhauer promptly informed the circuit court of the bankruptcy court’s second
    decision. As a matter of federal bankruptcy law, that decision refutes the central premises
    of Uni-Select’s argument in support of summary judgment – i.e., that Schlotzhauer did
    not own her claim and that, if she had reacquired it, it was still barred by limitations. The
    circuit court considered the bankruptcy court’s second decision at a hearing on the post-
    judgment motion, but appears not to have accounted for that decision in denying the post-
    11
    (...continued)
    insurer as prospective subrogee without permitting insurer to cure defect by joining
    insured as co-plaintiff, where insurer was not real party in interest when action was filed
    because its subrogation rights had not yet vested within limitations period for tort claim).
    -27-
    judgment motion. The court certainly did not explain why it declined to reconsider the
    grant of summary judgment in light of the bankruptcy court’s decision that, as a matter of
    federal bankruptcy law, Schlotzhauer had owned the claim all along.
    In a final defense of the circuit court’s decision, Uni-Select argues that the
    bankruptcy court exceeded its jurisdiction or decided a question of Maryland law. We
    disagree. In moving for summary judgment, Uni-Select argued that, as a matter of federal
    bankruptcy law, Schlotzhauer did not have the right to assert her claim. The bankruptcy
    court held that the premise for Uni-Select’s motion was incorrect and that, as a matter of
    federal bankruptcy law, Schlotzhauer did have the right to assert her claim – and, indeed,
    had had it since before the commencement of the lawsuit. As the circuit court correctly
    recognized, it “ha[d] no authority to make” a “determination” about when and whether
    Schlotzhauer acquired her claim, because that “is a matter of federal bankruptcy law,
    under the jurisdiction of a federal bankruptcy court.” Consequently, once the bankruptcy
    court rejected the premise for Uni-Select’s motion, the circuit court should have vacated
    the grant of summary judgment in Uni-Select’s favor.12
    Because the bankruptcy court’s second decision amounts to a material
    development that Schlotzhauer could not have brought to the court’s attention before the
    12
    It is by no means unusual for the outcome of bankruptcy proceedings to have
    some material effect on the rights of a party in an action in the Maryland courts. See, e.g.,
    WinMark Ltd. P’ship v. Miles & Stockbridge, 
    345 Md. 614
    , 629-30 (1997); 
    Adams, 328 Md. at 480-81
    ; 
    Horn, 100 Md. App. at 320-21
    ; cf. GAB Enters., Inc. v. Rocky Gorge
    Dev., LLC, 
    221 Md. App. 171
    (2015).
    -28-
    court had granted summary judgment, the circuit court erred in declining to vacate that
    ruling in response to the motion to alter or amend.13
    C ONCLUSION
    When the circuit court initially granted summary judgment on the ground that
    Schlotzhauer did not own her claim, it did not know of the bankruptcy court’s near-
    simultaneous decision that she had acquired the claim six weeks before. Nonetheless,
    once Schlotzhauer brought that decision to the circuit court’s attention, as she did in her
    timely post-judgment motion to alter or amend, the court had an obligation to consider
    that new legal development. The court also had an obligation to consider the bankruptcy
    court’s subsequent decision that Schlotzhauer had owned the claim from the inception of
    her lawsuit.
    Although the court fulfilled its obligation to consider those decisions, it reached
    the erroneous conclusion. Under either of the bankruptcy court’s decisions, the grant of
    summary judgment was no longer tenable. Because the court, therefore, erred in denying
    the motion to alter or amend the judgment, we vacate the grant of summary judgment.
    See 
    Williams, 361 Md. at 152-53
    ; 
    Wormwood, 124 Md. App. at 701
    .
    13
    At various points, both Uni-Select and the circuit court incorrectly spoke as
    though the court lacked “subject matter jurisdiction” because of Schlotzhauer’s putative
    lack of “standing.” These ill-fitting references to “subject matter jurisdiction” derive
    from federal cases, which hold that there is no “case or controversy” within the meaning
    of Article III, section 2, of the federal Constitution, if a plaintiff lacks standing.
    -29-
    JUDGMENT OF THE CIRCUIT
    COURT FOR QUEEN ANNE’S
    COUNTY VACATED. CASE
    REMANDED FOR FURTHER
    PROCEEDINGS CONSISTENT
    WITH THIS OPINION. COSTS TO
    BE PAID BY APPELLEES.
    -30-