Opinion ID: 2820143
Heading Depth: 3
Heading Rank: 2

Heading: Claims for Money Damages

Text: “The Supreme Court’s standing jurisprudence contains two strands: Article III standing, which enforces the Constitution’s case-or-controversy requirement, and prudential standing which embodies judicially self-imposed limits on the exercise of federal jurisdiction.” Wilderness Soc’y v. Kane Cty., 632 F.3d 1162, 1168 (10th Cir. 2011) (en banc) (alteration and internal quotation marks omitted). “The prudential standing doctrine encompasses various limitations, including the general prohibition on a litigant’s raising another person’s legal rights.” Id. (internal quotation marks omitted). Fed. R. Civ. P. 17(a)(1), which provides that “[a]n action must be prosecuted in the name of the real party in interest,” essentially codifies this portion of the prudential standing doctrine. See RMA Ventures Cal. v. SunAmerica Life Ins. Co., 576 F.3d 1070, 1073 (10th Cir. 2009) (citing Rawoof v. Texor Petrol. Co., 521 F.3d 750, 757 (7th Cir. 2008)). The district court’s decision focused on Article III standing. We rely instead on the prudential standing and real party in interest doctrines, which preclude Ms. Brumfiel from proceeding with her claims for money damages. “[T]he prudential standing doctrine[] represents the sort of ‘threshold question’ we have recognized may be resolved before addressing jurisdiction.” Tenet v. Doe, 544 U.S. 1, 6 n.4 (2005); see also Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999) (“It is hardly novel for a federal court to choose among threshold grounds for denying audience to a case on the merits.”); Wilderness Soc’y, 632 F.3d at 1168 (proceeding directly to prudential standing without considering constitutional -6- standing). Once Ms. Brumfiel filed her bankruptcy petition, she was not the real party in interest, as required by Rule 17(a)(1).4 Under 11 U.S.C. § 541(a)(1), the bankruptcy estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” When a Chapter 7 bankruptcy petition is filed, “[t]he trustee of the bankruptcy estate has the sole capacity to sue and be sued over assets of the estate.” Mauerhan v. Wagner Corp., 649 F.3d 1180, 1184 n.3 (10th Cir. 2011) (citing 11 U.S.C. § 323(b)). Upon filing for bankruptcy, Ms. Brumfiel was required to list all the assets of her estate. 11 U.S.C. § 521(a)(1). Those assets included “all legal claims and causes of action, pending or potential, which a debtor might have.” Eastman v. Union Pac. R. Co., 493 F.3d 1151, 1159 (10th Cir. 2007); see also Mauerhan, 649 F.3d at 1184 n.3 (“When an individual files for bankruptcy, all interests of the debtor become property of the bankruptcy estate, including causes of action.”); Sender v. Buchanan (In re Hedged-Invs. Assocs., Inc.), 84 F.3d 1281, 1285 (10th Cir. 1996) (“Causes of action belonging to the debtor fall within [§ 541(a)(1)].”). 4 Fed. R. Civ. P. 17(a)(3) 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 allowed for the real party in interest to ratify, join, or be substituted in the action.” This provision does not require a remand for the district court to allow the trustee to ratify or join this action. We take judicial notice that the bankruptcy court approved a settlement agreement between the Chapter 7 trustee and U.S. Bank as trustee of the mortgage loan trust, whereby the trust agreed to purchase the causes of action from the bankruptcy estate. See In re Brumfiel, No. 11-39881 HRT, Doc. Nos. 115, 116 (Bankr. D. Colo. Mar. 20, 2015). The trustee has no interest in litigating these claims on behalf of the estate. And whether the bankruptcy trustee or the trust now owns the claims, Ms. Brumfiel is not the real party in interest. -7- Ms. Brumfiel argues that her claims did not accrue pre-petition because she did not suffer an injury in fact until December 2012, when the state court initially authorized the sale of her property in the Rule 120 proceeding. We disagree. For one thing, she saw no impediment to filing her complaint in this action in October 2012, two months before the state court’s order. As the district court noted, the amendments to § 38-38-101 were effective long before the bankruptcy proceeding, and the Rule 120 proceeding was commenced before the bankruptcy proceeding. Before she filed her bankruptcy petition, Ms. Brumfiel already had asserted the same or similar theories, raised in opposition to the Rule 120 foreclosure, that she included in her federal complaint. Accordingly, she was required to disclose the claims in her bankruptcy proceeding. See Eastman, 493 F.3d at 1159; see also U.S. ex rel. Spicer v. Westbrook, 751 F.3d 354, 361-62 (5th Cir. 2014) (holding that debtors must disclose “all pending and potential claims” “as long as the debtor has enough information to suggest that he may have a potential claim” (internal quotation marks omitted)). The district court properly considered the claims to be part of the bankruptcy estate.5 Because Ms. Brumfiel did not list the claims in her asset schedules, the trustee neither administered them nor abandoned them at the close of the bankruptcy case, and they remained the property of the bankruptcy estate. 11 U.S.C. § 554(d). 5 The Colorado Court of Appeals reached the same conclusion in Ms. Brumfiel’s appeal of the judgment against her in the Rule 105 judicial foreclosure action. See U.S. Bank, N.A., No. 14CA0464, slip op. at 5-10. -8- Accordingly, Ms. Brumfiel lost the authority to pursue the claims. See Spicer, 751 F.3d at 362-64 & n.13; Tyler v. DH Capital Mgmt., Inc., 736 F.3d 455, 465 (6th Cir. 2013); Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268, 1272 (11th Cir. 2004); Dunmore v. United States, 358 F.3d 1107, 1112 (9th Cir. 2004); Vreugdenhill v. Navistar Int’l Transp. Corp., 950 F.2d 524, 526 (8th Cir. 1991). That being so, dismissal was appropriate.