Ingalls v. Beutel , 326 F. App'x 838 ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 16, 2009
No. 08-50558 Charles R. Fulbruge III
Clerk
In The Matter Of: GARY L BRADLEY
Debtor
RONALD INGALLS, Chapter 7 Trustee
Appellant
v.
JAMES D GRESSETT
Appellee
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:05-CV-461
Before REAVLEY, WIENER, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Ronald Ingalls, as Chapter 7 Trustee of the estate of
debtor Gary Bradley, appeals the district court’s grant of summary judgment in
favor of Defendant-Appellee James Gressett, dismissing the Trustee’s Texas law
claim against Gressett for conspiring with Bradley to fraudulently transfer
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-50558
assets out of Bradley’s estate. The district court held that the Trustee lacked
standing to bring the civil conspiracy claim. Reviewing both the grant of
summary judgment and the underlying legal issue of standing de novo, Texas v.
United States, 497 F.3d 491, 495 (5th Cir. 2007), we AFFIRM the district court’s
judgment for the following reasons:
1. It is well established that a trustee has no standing to bring tort claims
that belong exclusively to creditors of the bankruptcy estate. See Caplin v.
Marine Midland Grace Trust Co., 406 U.S. 416, 433–34, 92 S. Ct. 1678, 1688
(1972) (holding that a trustee lacked standing to sue a third party for damages
incurred by debenture holders of the corporate debtor); In re Seven Seas
Petroleum, Inc., 522 F.3d 575, 584 (5th Cir. 2008) (citing Caplin for the
proposition that “the trustee has no right to bring claims that belong solely to
the estate’s creditors”); In re Educators Group Health Trust, 25 F.3d 1281, 1284
(5th Cir. 1994) (same).
We agree with our sister circuit that Congress’s adoption of the “strong-
arm clause,” 11 U.S.C. § 544(a), did not supersede Caplin’s holding that a trustee
lacks authority to assert a claim against a third party that does not comprise
part of the bankruptcy estate. See In re Ozark Rest. Equip. Co., 816 F.2d 1222,
1226–30 (8th Cir. 1987). Although Caplin predated the enactment of § 544(a),
we, too, find it “extremely noteworthy” that Congress considered including a
provision that would have expressly overruled Caplin but declined to do so. See
id. at 1227–28 & nn. 9 & 10; see also Williams v. Cal. 1st Bank, 859 F.2d 664,
667 (9th Cir. 1988) (agreeing with the Eighth Circuit’s interpretation of the
legislative history behind § 544(a)). The Bankruptcy Code does not authorize the
Trustee to collect property or money except that which is owed to the estate.
2. The Trustee alternatively contends that the conspiracy claim belongs to
the bankruptcy estate because, unlike in Caplin, the claim here seeks to remedy
an injury to all of Bradley’s creditors and not merely a subset thereof. Even
2
No. 08-50558
assuming that any or all of Bradley’s creditors could properly assert the claim,
we disagree that this fact alone confers standing on the Trustee. This court
recently clarified that, when determining whether a claim is property of the
bankruptcy estate such that the trustee has standing to assert it under
11 U.S.C. § 541(a), the distinction between claims that are “personal” to some
creditors or “general” as to all is relevant only “after a claim has been analyzed
to determine whether it is properly assertable by the debtor or creditor, and not
as a substitute for the analysis itself.” In re Seven Seas Petroleum, 522 F.3d at
588 (construing In re Schimmelpenninck, 183 F.3d 347 (5th Cir. 1999) (emphasis
added)). For instance, a claim that would ordinarily be brought by creditors
nonetheless belongs to the debtor’s estate if it pursues property in which the
debtor retains an equitable interest, see, e.g., In re MortgageAmerica Corp., 714
F.2d 1266, 1275 (5th Cir. 1983) (construing a fraudulent transfer claim to belong
to the debtor’s estate), or if the debtor itself could have brought the claim under
applicable state law, see, e.g., id. at 1276–77 (holding Texas law permits a
corporate debtor to bring a trust fund (denuding) action); In re S.I. Acquisition,
Inc., 817 F.2d 1142, 1152–53 (5th Cir. 1987) (holding an alter ego action could
be brought by the debtor corporation under Texas law). But Texas law does not
suggest that Bradley has any cognizable legal or equitable interest in the
damages sought here to replace assets that he conspired to fraudulently transfer
or that Bradley could seek damages from his co-conspirator for assisting with
those transfers. Indeed, the Trustee does not contend otherwise. Thus, in suing
Gressett for his role in the conspiracy, the Trustee does not represent the
creditors’ interests in Bradley’s conspiracy claims against Gressett but attempts
to assert the creditors’ own direct claim against Gressett in which Bradley has
no interest. This he cannot do. See In re Seven Seas Petroleum, 522 F.3d at 588(distinguishing between a trustee’s permissible enforcement of the creditors’
interests in the debtor’s claims against a third party, and a trustee’s
3
No. 08-50558
impermissible attempt to assert the creditors’ direct claims against third parties
(quoting Steinberg v. Buczynski, 40 F.3d 890, 893 (7th Cir. 1994)). Finding no
standing on the part of the Trustee to bring the action for civil conspiracy, we
conclude that the district court properly granted summary judgment in favor of
Gressett.
AFFIRMED.
4