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A Better Partnership
September 21, 2011

COA Opinion: Plaintiff lacked standing to assert a cause of action where she was aware of the potential for a lawsuit at the time of her bankruptcy filing, but failed to schedule that claim as part o

The Court of Appeals issued a per curiam opinion in Young v. Independent Bank, No. 299192, concluding that plaintiff lacked standing to bring an action to quiet title against her mortgage lender. In this case, the bank had initiated foreclosure proceedings against plaintiff, and plaintiff disputed the bank's right to foreclose. Plaintiff filed for Chapter 7 bankruptcy protection and, even though she was aware of her dispute with the bank, did not list any cause of action against the bank. After being discharged from bankruptcy, plaintiff brought this action to quiet title against the bank. The Court of Appeals affirmed the trial court's conclusion that plaintiff lacked standing to bring this action. The Court concluded that, because plaintiff was aware of this dispute at the time of her bankruptcy filing, the cause of action is an asset of the bankruptcy estate. Thus, plaintiff does not have standing to assert the cause of action unless it was abandoned by the bankruptcy trustee. The Court of Appeals concluded that the trustee cannot abandon an asset that is not scheduled as a part of the bankruptcy estate, even if the trustee is aware of its existence.

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