United States District Court, M.D. Tennessee, Nashville Division
MEMORANDUM OPINION AND ORDER
WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE.
April 26, 2016, Bell filed a voluntary petition under Chapter
7 of the Bankruptcy Code. (M.D. Tenn. Case No.
3:16-bk-02966.) John C. McLemore is the Chapter 7 Bankruptcy
Trustee. Plaintiff filed the instant lawsuit on March 24,
2017. (Doc. No. 1.) The Complaint arises from Defendant's
expert witness testimony during a trial in 2014. As discussed
below, before the Court are the Magistrate Judge's
decisions concerning (1) the substitution of the bankruptcy
trustee for Bell as the real party in interest and (2) the
Report and Recommendation on the pending motion to dismiss
Substitution of Trustee
moved to be substituted for Bell as the real party in
interest as Plaintiff. (Doc. No. 13.) The Magistrate Judge
granted the motion. (Doc. No. 17.) Plaintiff has filed a
“Response and Objections” to this order. (Doc.
No. 18). The Court will treat this as a Motion for Review and
Objections pursuant to Local Rule 72.
Magistrate Judge correctly substituted the Trustee as the
real party in interest. Rule 17(a) of the Federal Rules of
Civil Procedure requires that an action be prosecuted in the
name of the real party in interest. Fed.R.Civ.P. 17. The
Bankruptcy Code provides that the bankruptcy estate comprises
“all legal or equitable interests of the debtor in
property as of the commencement of the case, ” 11
U.S.C. § 541(a)(1), and it is well established that the
“interests of the debtor in property” include
“causes of action.” Bauer v. Commerce Union
Bank, Clarksville, Tenn., 859 F.2d 438, 440-41 (6th Cir.
1988) (citing Gochenour v. Cleveland Terminals Bldg.
Co., 118 F.2d 89, 93 (6th Cir. 1941)). Federal Rule of
Civil Procedure 25(c) permits a court to order that a trustee
be substituted as a party plaintiff for purposes of pursuing
a cause of action on behalf of the bankruptcy estate.
Fed.R.Civ.P. 25(c). When substituted, the trustee in
bankruptcy acts as representative of the estate. It is the
trustee who “has capacity to sue and be sued.” 11
U.S.C. § 323(b). “It is well settled that the
right to pursue causes of action formerly belonging to the
debtor - a form of property ‘under the Bankruptcy
Code' - vests in the trustee for the benefit of the
estate.” Bauer, 859 F.2d at 441 (citing
Jefferson v. Mississippi Gulf Coast YMCA, 73 B.R.
179, 181-82 (S.D.Miss. 1986)). The debtor has no standing to
pursue such causes of action. Bauer, 859 F.2d at 441
(citing Matter of Tvorik, 83 B.R. 450, 456 (Bankr.
W.D. Mich. 1988)). Moreover, the bankruptcy trustee is
empowered to compromise causes of action as well as abandon
those that are of inconsequential benefit to the estate.
Bauer, 859 F.2d at 441; 11 U.S.C. § 554(a).
Bell's bankruptcy petition was filed in April 2016, a
bankruptcy estate was created and any causes of action
belonging to Bell became property of the estate. McLemore, as
Trustee, assumed the right to pursue Bell's cause of
action. McLemore was, therefore, properly substituted for
Bell. Bell's Objections are without merit. Bell states
that by moving slowly, McLemore was acting in concert with
the Defendant to obstruct justice and conceal fraudulent
activities. However, Bell offers absolutely no support for
these brief claims. Accordingly, the Motion for Review (Doc.
No. 18) is GRANTED and Bell's Objections
Report and Recommendation
Defendant has filed a Motion to Dismiss the Complaint. (Doc.
No. 11.) The real party in interest, Trustee McLemore, filed
a Response stating that, based upon investigation of the case
and review of the motion, he did not oppose the motion. (Doc.
No. 19.) As discussed above, this is within McLemore's
power and is therefore sufficient basis alone to dismiss the
the Magistrate Judge recognized this, he nonetheless reviewed
the legal arguments. The Defendant argued that:
Defendant asserts that the claims for defamation and
malicious prosecution are barred by the one year statute of
limitations insofar as the causes of action arose in the
course of the March 2014 trial of the prior lawsuit and the
complaint was filed on March 24, 2017. Defendant further
asserts that plaintiff's claim of fraud fails as it is
not stated with sufficient particularity. The Defendant
argues that the causes of action based upon intentional
misrepresentations, fraud, defamation and “multiple
intentional falsifications” allegedly made by the
Defendant the 2014 trial are barred by the absolute
litigation/testimonial privilege. Defendant asserts that the
“malicious prosecution” claim fails insofar as
the plaintiff cannot establish the essential elements of the
claim because defendant has not instituted any judicial
proceedings against the plaintiff and the prior lawsuit was
not terminated in plaintiff's favor. Finally, defendant
asserts that the cause of action for “conspiracy”
is unsupported by any material facts or pled with any degree
of specificity sufficient to support such a claim.
(Doc. No. 20 at 2 (citations omitted).) The Magistrate
Judge's Report and Recommendation concluded that the
Court should grant the motion to dismiss in its entirety. Out
of an abundance of caution, the Court has reviewed the record
and the issues raised above de novo. Fed.R.Civ.P. 72. The
Court concurs with the Magistrate Judge that, taking the
allegations in the light most favorable to the plaintiff, the
Plaintiff has failed to state any claim upon which relief can
is no longer the real party in interest, it is not Bell's
role to object to the motion to dismiss. However, again, out
of an abundance of caution, the Court has reviewed Bell's
pro se Motion to Quash Pending Order of Dismissal, which the
Court has interpreted as Objections to the Report and
Recommendation. (Doc. No. 21.) Bell maintains that everyone
involved with this case, and the prior case that is the
subject of this action, “are willfully and
intentionally interfering with the legal process.”
(Id. at 1.) Bell contends that there are “no
laws” which allow for the misrepresentations he alleges
were made in his prior case, and claims he is the victim of
“obstruction of justice” with which the Trustee,
attorneys and judges are complicit. (Id. at 1-2.)
Bell's Objections are without merit and are
OVERRULED. The Report and Recommendation
(Doc. No. 20) is APPROVED AND ADOPTED. The
Motion to Dismiss (Doc. No. 11) is GRANTED.
Clerk of the Court will enter a final judgment in accordance
with Rule 58 of the Federal Rules of ...