11 U.S.C. §541; Property of the Estate; Judicial Estoppel
Wooten v. Altahama Bank and Trust, 2005 U.S. Dist. LEXIS 36186, Case No. CV203-100 (S.D. Ga. October 4, 2005)(Alaimo)
Plaintiff filed a complaint against former employees and others for numerous state law claims, including fraud and conversion, and civil RICO. The defendants moved for summary judgment on the grounds that the plaintiff had previously filed a Chapter 7 petition, and failed to identify the claims as an asset of the Bankruptcy estate. As a result, the claims belonged to the estate and the plaintiffs lack standing to pursue them.
The court noted that the accrual of a cause of action for purposes of triggering the statute of limitations may be different than the accrual of a claim for purposes of determining ownership under §541. Under Georgia law, claims for fraud and conversion accrue on the dates of the alleged false representation and the date of the actual conversion, respectively. These alleged acts took place prior to the bankruptcy filing and, therefore, were property of the estate and Chapter 7 trustee, and not the plaintiff. With respect to Civil RICO, however, the claim “begins to accrue as soon as the plaintiff discovers, or reasonably should have discovered, both the existence and source of his injury and that the injury is part of a pattern.” Plaintiffs did not discover the alleged activities, injuries or pattern until after the bankruptcy was filed. Therefore, Plaintiffs, and not the trustee, had standing to pursue the RICO claims.