Case Title: Tom Hale v. Remax Realty Chapter 13 bankruptcy

Citation: 

Docket Number: 33995

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2008-05-02T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 33995 
 
TOM HALE, 
 
Plaintiff-Appellant, 
 
v. 
 
REMAX REALTY, KEN SWISHER, and 
ELIZABETH R. LOVERIDGE, 
 
Defendants-Respondents. 
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Boise, April 2008 Term 
 
2008 Opinion No.  56 
 
Filed: May 2, 2008 
 
Stephen W. Kenyon, Clerk 
 
 
 
Appeal from the District Court of the Sixth Judicial District of the State of Idaho, 
in and for Bannock County.  The Hon. Ronald E. Bush, District Judge. 
 
The judgment of the district court is affirmed. 
 
Thomas F. Hale, Shelley, appellant pro se, did not appear. 
 
Maguire & Kress, Pocatello, for respondents.  David Maguire argued. 
 
 
 
EISMANN, Chief Justice. 
 
This is an appeal from a judgment dismissing this case without prejudice on the ground 
that the plaintiff commenced this action against a bankruptcy trustee and her court-approved 
agent for acts done in their official capacities without first obtaining leave of the bankruptcy 
court.  We affirm the district court.  
I.  FACTS AND PROCEDURAL HISTORY 
 
On October 14, 2005, Tom Hale filed a Chapter 13 bankruptcy petition in the United 
States Bankruptcy Court, District of Utah.  On July 19, 2006, Hale converted the case to one 
under Chapter 7, and a trustee was appointed on the same date.  The bankruptcy estate included 
two parcels of rental property located in Pocatello, Idaho.  To perform her duties, the trustee 
decided to sell these parcels.  In order to do so, she obtained the bankruptcy court’s approval to 
retain the services of a specifically named realtor, which she did. 
 
On November 8, 2006, Hale filed this action in Idaho against the real estate agent and his 
purported employer alleging that the agent had slandered Hale.  Hale later filed an amended 
complaint adding the trustee as a defendant and alleging that she too had slandered him. 
 
The Defendants moved to dismiss the amended complaint on the ground that Hale had 
failed to obtain permission from the bankruptcy court before filing this action against the trustee 
and her court-approved agent, the realtor.  Because Hale had failed to do so, the district court 
dismissed this action without prejudice, and Hale timely appealed. 
 
II.  ANALYSIS 
 
In Barton v. Barbour, 104 U.S. 126 (1881), the United States Supreme Court held that a 
railroad passenger could not file a negligence action for personal injuries against a railroad being 
operated by a court-appointed receiver without first obtaining permission from the court that had 
appointed the receiver.  The holding of that case became known as the Barton doctrine, and it 
applies to bankruptcy trustees and other officers appointed by the bankruptcy court.  “[A] party 
must first obtain leave of the bankruptcy court before it initiates an action in another forum 
against a bankruptcy trustee or other officer appointed by the bankruptcy court for acts done in 
the officer’s official capacity.”  In re Crown Vantage, 421 F.3d 963, 970 (9th Cir. 2005). 
 
There are two exceptions to the Barton doctrine.  Leave of the bankruptcy court is not 
required if the claim arises from conduct that was outside the scope of the trustee’s authority.  
Matter of Campbell, 13 B.R. 974, 976 (Bankr.D.Idaho 1981).  Leave of the court is also not 
required with respect to acts or transactions in carrying on a business connected with the 
bankruptcy estate’s property.  28 U.S.C.  § 959(a). 
 
The district court found that neither of these two exceptions applied.  It therefore 
dismissed Hale’s complaint without prejudice because he had not obtained permission from the 
bankruptcy court in Utah before filing this lawsuit. 
 
In his opening brief, Hale argues at length that the bankruptcy court in Utah did not have 
subject-matter jurisdiction to litigate the claims in this lawsuit.  Even if it did, he contends the 
Defendants are simply seeking to engage in forum shopping.  He also argues that since the 
claims arose after he filed his petition in bankruptcy, any money he may recover is not property 
of the bankruptcy estate.  In making these arguments, Hale misapprehends the reason that the 
district court dismissed this case.  The issue is not whether it should have been filed in the 
 
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bankruptcy court.  It is whether permission must first be obtained from the bankruptcy court 
before suing that court’s trustee and the trustee’s court-approved agent.  In his opening brief, 
Hale does not argue that the Barton doctrine is inapplicable to this case.  The district court did 
not err in dismissing this action without prejudice because Hale failed to obtain approval of the 
bankruptcy court in Utah before commencing this action against the bankruptcy trustee and her 
court-approved agent. 
 
After reading the Defendants’ brief on appeal, Hale apparently understood the reason for 
the district court’s dismissal.  In his reply brief, Hale argued that the exception provided by 28 
U.S.C. § 959(a) applies in this case.  “This Court will not consider arguments raised for the first 
time in the appellant’s reply brief.”  Marcia T. Turner, L.L.C. v. City of Twin Falls, 144 Idaho 
203, 211, 159 P.3d 840, 848 (2007). 
 
III.  CONCLUSION 
 
The judgment of the district court is affirmed.  We award costs on appeal to the 
respondents. 
 
 
Justices BURDICK, J. JONES, W. JONES and HORTON CONCUR.