Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_09-cv-08138/USCOURTS-azd-3_09-cv-08138-3/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 18:241 Conspiracy Against Citizen Rights

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Lynnell Levingston, 

Plaintiff, 

vs.

Patricia Piburn, et al.,

Defendants. 

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No. CV-09-8138-PCT-LOA

ORDER

This matter is before the Court on its own review and on the Motion of Defendants

Haverstick and Chavez to continue on Inactive Calendar, docket # 83.

I. Notice of Bankruptcy and Assignment to Inactive Calendar 

Plaintiff, proceeding pro se, commenced this action on August 24, 2009 against

numerous Defendants. (docket # 1) On December 1, 2009, Defendants Patricia and Raymon

Piburn filed a Notice of Filing Bankruptcy, advising the Court that Plaintiff had filed a

petition for Chapter 7 bankruptcy in the U.S. Bankruptcy Court, District of Arizona. (docket

# 71) In view of the notice of bankruptcy, and the automatic stay provision of 11 U.S.C. §

362(a)(1), the Court placed this matter on its inactive calendar until March 5, 2010. (docket

# 73) On March 9, 2010, the Court issued an order continuing this matter on its inactive

calendar until March 22, 2010. (docket # 82) The March 9, 2010 Order also directed Plaintiff, with the written authorization of the Bankruptcy Trustee, or the Bankruptcy Trustee

himself to show cause why this matter should be not be dismissed for failing to show a

reasonable basis why this matter should be continued on inactive status. (docket # 82) 

Case 3:09-cv-08138-LOA Document 87 Filed 03/26/10 Page 1 of 5
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1

 Review of the Bankruptcy Court’s records confirms that Plaintiff has an pending

Chapter 7 bankruptcy proceeding in the U.S. Bankruptcy Court, District of Arizona, petition #

2:09-bk-31573-RTB. 

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Neither Plaintiff nor the Bankruptcy Trustee responded to the March 9, 2010 Order. As

discussed below, the Court will return this matter to its active calendar and, despite pro se

Plaintiff’s failure to respond to the March 9, 2010 Order, will not dismiss this matter at this

time. 

While the Court’s stay order had the benefit of potentially reducing the costs of

this litigation and the judicial management of this case shortly after the bankruptcy filing,

the Court concludes that the automatic stay provision of 11 U.S.C. § 362 does not apply to

this prepetition action filed by the bankruptcy debtor. In re Merrick, 175 B.R. 333, 336 (9th

Cir. 1994) (noting that “§ 362 does not stay the hand of the trustee from continuing to

prosecute a pre-bankruptcy lawsuit instituted by the debtor.”) (citing Merchants & Farmers

Bank of Dumas v. Hill, 122 B.R. 539, 541 (E.D.Ark. 1990)); White v. City of Santee, 186

B.R. 700, 704 (9th Cir. 1995) (“The trustee or debtor in possession is not prevented by the

automatic stay from prosecuting or appearing in an action which the debtor has initiated and

that is pending at the time of bankruptcy.”); Martin-Trigona v. Champion Fed. Sav. & Loan

Ass’n., 892 F.2d 575, 577 (7th Cir. 1999) (stating that “the automatic stay is inapplicable to

suits by the bankrupt (‘debtor’, as he is now called.”) (emphasis in original); Sanchez v.

Torres, No. 07-4174, 2008 WL 1701900, at * 1 n. 2 (N.D.Cal. 2008) (citations omitted). 

Because the automatic stay provision of 11 U.S.C. § 362 does not apply, the Court will

return this matter to its active calendar consistent with its responsibilities under the Civil

Justice Reform Act. 

Although the stay order no longer applies to this matter, Plaintiff’s filing of a

bankruptcy petition1

 has other significant ramifications which the Court will address in this

Order.

II. Applicable Law 

The filing of a bankruptcy petition creates an estate in bankruptcy. 11 U.S.C. §

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2

 Petitioner’s proceeding in 2:09-bk-29095-PHX-RTB was dismissed and reinstated on

January 8, 2010 in petition 2:09-bk-31573-RTB.

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301(b) (“The commencement of a voluntary case under a chapter of this title constitutes an

order for relief under such chapter) and § 541 (governing the property of a bankruptcy

estate); In re Raintree Healthcare Corp., 431 F.3d 685, 688 (9th Cir. 2005). The property of

a bankruptcy estate consists of “all legal or equitable interests of the debtor in property as of

the commencement of the case.” 11 U.S.C. § 541(a)(1). Moreover, “prepetition causes of

action . . . are assets included within the meaning of property of the estate.” Hernanadez v.

Downey Sav. & Loan Ass’n, F.A., 2009 WL 704381, at * 3 (S.D.Cal. 2009) (citing Cusano v.

Klein, 264 F.3d 936, 945 (9th Cir. 2001)). See e.g., Sierra Switchboard Co. v. Westinghouse

Elec. Corp., 789 F.2d 705, 708 (9th Cir. 1986). 

Here, Plaintiff filed suit in this Court on August 24, 2009. (docket # 1) She filed

for Chapter 7 bankruptcy on November 10, 2009 in the United States Bankruptcy Court,

District of Arizona petition No. 2:09-bk-29095-PHX-RTB.2

 Her prepetition claims, which

include those in this lawsuit, are therefore property of the bankruptcy estate. Barger v. City

of Cartersville, 348 F.3d 1289, 1292 (11th Cir. 2003). A bankruptcy trustee is the estate’s

representative, and has the capacity to sue and be sued. 11 U.S.C. § 323 (2009). “Because

the bankruptcy trustee controls the bankruptcy estate, [he] is the real party in interest in the

suits that belong to the estate.” Griffin v. Allstate Ins., Co., 920 F.Supp. 127, 130 (C.D.Cal.

1996). After filing a Chapter 7 bankruptcy petition, a debtor may not prosecute a cause of

action belonging to the bankruptcy estate absent a showing that her claims were exempt

from the bankruptcy estate or abandoned by the bankruptcy trustee. Cobb v. Aurora Loan

Services, LLC., 408 B.R. 351, 354 (E.D. Ca. 2009) (citing, among others, Hernandez, 2009

WL 704381, at * 5 and Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705,

708 (9th Cir. 1986)); Fed.R.Civ.P. 17(a) (“An action must be prosecuted in the name of the

real party in interest.”).

On the existing record, the Court cannot determine whether Plaintiff’s prepetition

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3 Federal Rule of Civil Procedure 17(a) states that “[e]very action shall be prosecuted in

the name of the real party in interest.” Id. It also provides that “[t]he court may not dismiss an

action for failure to prosecute in the name of the real party in interest until, after an objection,

a reasonable time has been for the real party in interest to ratify, join, or be substituted into the

action.” Id.

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claims set forth in this action are exempt from the bankruptcy estate or whether this cause of

action has been abandoned by the bankruptcy trustee. 11 U.S.C. § 522 (specifying the

federal property exemptions available to debtors); 11 U.S.C. § 554(a) (stating that abandonment of bankruptcy estate property may occur by the trustee after notice to creditors and a

hearing); 11 U.S.C. § 554(b) (stating that abandonment of bankruptcy estate property may

occur on request of a party in interest after notice and a hearing); 11 U.S.C. § 554(c) (abandonment of bankruptcy estate property may occur when the case is closed and the trustee has

not otherwise administered the property). 

As discussed above, Plaintiff is not the real party in interest to this case as required

by Fed.R.Civ.P. 17. Thus, Plaintiff must substitute or join the Bankruptcy Trustee, or show

the Trustee’s ratification of this action, pursuant to Fed.R.Civ.P. 17(a)(3).3

 Alternatively,

Plaintiff may amend her complaint to allege her lawsuit is exempt from the bankruptcy

estate or has been abandoned by the Bankruptcy Trustee. Plaintiff must take the foregoing

actions on or before April 9, 1010 or her case may be dismissed. 

III. Motion to Continue on Inactive Calendar

On March 9, 2010, Defendants Haverstick and Chavez filed a motion, requesting

that this matter remain on the Court’s inactive calendar for thirty days “to allow the

bankruptcy trustee time to assess the claims and determine appropriate action.” (docket #

83) In view of the Court’s sua sponte determination that this matter should be returned to

its active calendar, the Court will deny that motion. Additionally, because this Order grants

Plaintiff and the bankruptcy trustee until April 9, 2010 to respond to this Order regarding the

status of this action, the bankruptcy trustee will have the 30 days requested by these Defendants to assess the claims and determine the appropriate action.

In accordance with the foregoing,

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IT IS ORDERED returning this matter to the Court’s active calendar and

discharging the obligation of Plaintiff or the Bankruptcy Trustee to respond to the March 9,

2010 Order, docket # 82. 

IT IS FURTHER ORDERED that on or before April 9, 2010, Plaintiff shall

substitute or join the Bankruptcy Trustee, or show the Trustee’s ratification of this lawsuit,

pursuant to Fed.R.Civ.P. 17(a)(3); or alternatively, Plaintiff shall amend her complaint to

allege the lawsuit is exempt from the bankruptcy estate or has been abandoned by the

bankruptcy trustee.

IT IS FURTHER ORDERED that Plaintiff’s failure to comply with this Order

may result in dismissal of this cause of action pursuant to Fed.R.Civ.P. 41(b). 

IT IS FURTHER ORDERED that the Motion of Defendants Haverstick and

Chavez to Continue on Inactive Calendar (docket # 83) is DENIED. 

IT IS FURTHER ORDERED that the Clerk of Court shall mail a copy of this

Order to Lawrence J. Warfield, Bankruptcy Trustee, P.O. Box 14647, Scottsdale, AZ 85267.

Dated this 25th day of March, 2010.

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