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  "name": "Robert EDWARDS and Priscilla Edwards, Husband and Wife, d.b.a. Robert Edwards Construction Company, Plaintiffs-Appellants, v. Gene FRANCHINI, Kenneth R. Wagner, Scott Oliver, Keith F. Franchini, Stephen P. Curtis, Individually and as Partners of Franchini, Wagner, Oliver, Franchini & Curtis, Defendants-Appellees",
  "name_abbreviation": "Edwards v. Franchini",
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    "judges": [
      "PICKARD and BUSTAMANTE, JJ., concur."
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    "parties": [
      "Robert EDWARDS and Priscilla Edwards, Husband and Wife, d.b.a. Robert Edwards Construction Company, Plaintiffs-Appellants, v. Gene FRANCHINI, Kenneth R. Wagner, Scott Oliver, Keith F. Franchini, Stephen P. Curtis, Individually and as Partners of Franchini, Wagner, Oliver, Franchini & Curtis, Defendants-Appellees."
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        "text": "OPINION\nWECHSLER, Judge.\n{1} Defendants were Plaintiffs\u2019 attorneys in connection with a lawsuit against the State of New Mexico. On May 19,1989, before the lawsuit came to trial, Plaintiffs filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court. Plaintiffs did not list any claim against Defendants as an asset of the bankruptcy estate. Upon conversion of the petition to- a Chapter 7 bankruptcy petition, the bankruptcy court appointed a trustee of the bankruptcy estate. The trustee filed a motion to accept the trustee\u2019s settlement offer settling Plaintiffs\u2019 underlying case against the State of New Mexico for $25,000. The bankruptcy court approved the settlement. On November 27, 1993, with Plaintiffs still not bringing any claim against Defendants to the bankruptcy court\u2019s attention, the bankruptcy court entered a final decree stating that the bankruptcy estate had been fully administered. It discharged the trustee and closed the case.\n{2} With the conclusion of the bankruptcy proceeding, Plaintiffs brought an action against Defendants in the United States District Court, but that court dismissed the action for lack of subject matter jurisdiction. Then, on December 9, 1994, Plaintiffs filed this action for damages for breach of contract and legal malpractice with regard to the State of New Mexico lawsuit and the bankruptcy proceedings. Defendants answered the complaint and filed motions for summary judgment on the grounds that Plaintiffs lacked standing because of the bankruptcy proceeding and that the statute of limitations barred Plaintiffs\u2019 claims. The district court granted summary judgment for lack of standing and Plaintiffs appealed. As Plaintiffs\u2019 arguments do not have basis under bankruptcy law, we affirm.\nStanding During Pendency of Proceedings Below\n{3} Defendants based their motion for lack of standing on Rule 1-017(A) NMRA 1998, which requires that the action be prosecuted in the name of the real party in interest. According to Defendants, the bankruptcy trustee, not Plaintiffs, was the real party in interest to file the complaint. A real party in interest is the one who \u201c \u2018is the owner of the right being enforced and is in a position to discharge the defendant from the liability being asserted in the suit.\u2019 \u201d L.R. Property Management, Inc. v. Grebe, 96 N.M. 22, 23, 627 P.2d 864, 865 (1981) (quoting Jesko v. Stauffer Chem. Co., 89 N.M. 786, 790, 558 P.2d 55, 59 (Ct.App.1976)).\n{4} We look to bankruptcy law to ascertain whether Plaintiffs were real parties in interest to originally bring this action. See Santistevan v. Centinel Bank, 96 N.M. 730, 733, 634 P.2d 1282, 1285 (1981). As we later discuss, under the Bankruptcy Code, when a debtor files a bankruptcy petition, all legal or equitable \u201cinterests of the debtor in property as of the commencement of the case\u201d and \u201c[a]ny interest in property that the estate acquires after the commencement of the case\u201d become property of the bankruptcy estate. 11 U.S.C. \u00a7 541(a)(1), (7) (1994); see In re Dow, 132 B.R. 853, 859-60 (Bankr. S.D.Ohio 1991). According to the Bankruptcy Code, the debtor has the duty to schedule its assets and liabilities, see 11 U.S.C. \u00a7 521(1), but even if it does not, unscheduled assets still become property of the bankruptcy estate. See In re Davis, 158 B.R. 1000, 1002 (Bankr.N.D.Ind.1993). The bankruptcy estate is the responsibility of the bankruptcy trustee in a proceeding under Chapter 7 of the Bankruptcy Code. See 11 U.S.C. \u00a7 704 (trustee has duty to investigate financial affairs of debtor, collect property of estate, and close estate).\n{5} Unless the court makes a different order, property which the debtor schedules in the petition which is not administered when the court closes the ease \u201cis abandoned to the debtor.\u201d Id. \u00a7 554(c). Property which is not administered as part of a bankruptcy case and which is not abandoned to the debtor under Section 554 \u201cremains property of the estate.\u201d Id. \u00a7 554(d). Assets which the debtor does not schedule fall within this latter category of property which continues to be part of the bankruptcy estate. See Jeffrey v. Desmond, 70 F.3d 183, 186 (1st Cir.1995) (claim in state court action not scheduled as asset during bankruptcy proceedings not abandoned to debtor under Section 554, but remains part of bankruptcy estate).\n{6} Plaintiffs did not schedule their claims against Defendants as assets in their bankruptcy petition. They did not bring them to the attention of the trustee when Defendants ceased representing them or at any time during the pendency of the bankruptcy proceedings, and the trustee did not become aware of the claims prior to the 1993 order closing the bankruptcy case. As unscheduled property, the claims continued to be the property of the bankruptcy estate after the closing of the case. See 11 U.S.C. \u00a7 554(c), (d); Vreugdenhill v. Navistar Int\u2019l Transp. Corp., 950 F.2d 524, 526 (8th Cir. 1991) (unscheduled property even though not concealed from trustee not abandoned by operation of Section 554(c)); In re Drexel Burnham Lambert Group, Inc., 160 B.R. 508, 514 (S.D.N.Y.1993) (\u201c[A]ny asset not scheduled pursuant to 11 U.S.C. \u00a7 521(1) remains property of the bankrupt estate\u201d). Because the claims continued as assets of the bankruptcy estate, Plaintiffs did not have any right to enforce them in their own names. See In re Drexel Burnham Lambert Group, Inc. 160 B.R. at 514; In re Davis, 158 B.R. at 1002. Without the right to enforce the claims, Plaintiffs were not real parties in interest under Rule 1-017(A). The trustee, as the representative of the bankruptcy estate, was the real party in interest with the capacity to sue on the claims. See 11 U.S.C. \u00a7 323.\nInclusion of Claims Within Bankruptcy Estate\n{7} Plaintiffs also argue that a debt- or\u2019s claim for legal malpractice does not become part of the bankruptcy estate. If Plaintiffs are correct in this argument, Defendants\u2019 position that only the bankruptcy trustee is the real party in interest to bring a claim against Defendants would be to no avail, for the trustee would not have responsibility for this type of claim as assets of the bankruptcy estate. To this end, Plaintiffs endeavor to raise a question of first impression in New Mexico: whether a legal malpractice claim is unassignable and exempt from attachment under New Mexico law. According to Plaintiffs, if their claims are unassignable and exempt, the claims would not be part of the bankruptcy estate. Because we do not accept this underlying bankruptcy law proposition, we do not decide the issue of whether legal malpractice claims can be assigned.\n{8} With the Bankruptcy Reform Act, Congress substantially revised bankruptcy law. In its revisions, it expanded the definition of the property of the bankruptcy estate. See Tignor v. Parkinson, 729 F.2d 977, 980-81 (4th Cir.1984). Under the new Bankruptcy Code, \u201call legal or equitable interests of the debtor in property as of the commencement of the case\u201d and \u201cthat the estate acquires after the commencement of the case\u201d enter the estate. 11 U.S.C. \u00a7 541(a)(1), (7). In contrast, Section 70a(5) (11 U.S.C. \u00a7 110(a)(5) (1976)) of the old Bankruptcy Act only included within the estate \u201crights of action\u201d which were transferable or subject to any type of levy or seizure prior to the filing of the bankruptcy petition. See Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 707-09 (9th Cir.1986); Tignor, 729 F.2d at 980. Demonstrating the new expansive nature of the bankruptcy estate, the Bankruptcy Code provides broadly that an interest of the debtor in property becomes property of the estate under Section 541(a), \u201cnotwithstanding any provision in an agreement, transfer instrument, or applicable non-bankruptcy law\u2014(A) that restricts or conditions transfer of such interest by the debtor.\u201d 11 U.S.C. \u00a7 541(c)(1).\n{9} Moreover, the Bankruptcy Reform Act of 1978 fundamentally changed the bankruptcy treatment of exempt property. Prior to the Bankruptcy Reform Act, the bankruptcy estate did not include property which was subject to exemption from attachment or execution under state law. See Sierra Switchboard Co., 789 F.2d at 708 (\u201cThe Bankruptcy Reform Act eliminated the restrictive language of Section 70(a)(5) regarding those causes of action to which a bankruptcy trustee could take title.\u201d); Tignor, 729 F.2d at 980-81. The new Bankruptcy Code takes a different approach. See Tignor, 729 F.2d at 981. Under Section 541(a)(1) of the Bankruptcy Code, the debtor\u2019s legal or equitable property interests become part of the estate. Once part of the estate, property becomes eligible for exemption through 11 U.S.C. \u00a7 522 of the Bankruptcy Code. See Tignor, 729 F.2d at 981; see also 5 Collier on Bankruptcy \u00b6 541.LH[3][e] (Lawrence P. King, Editor-in-Chief, rev. 15th ed.1997). As a result of this change, the leading cases of the federal circuits interpreting the Bankruptcy Code have considered personal injury claims to be within the estate regardless of the assignability of the claims. See In re Wischan, 77 F.3d 875, 877 (5th Cir.1996) (\u201c[Djebtors\u2019 pre-petition causes of action for personal injuries are property of their estates.\u201d); Sierra Switchboard Co., 789 F.2d at 707-09 (petitioner\u2019s emotional distress claim is part of bankruptcy estate regardless of whether it is transferrable or assignable under state law); Tignor, 729 F.2d at 980-81 (under Bankruptcy Code exempt property of the debtor becomes part of the bankruptcy estate, including unliquidated personal injury claims); In re Cottrell, 876 F.2d 540, 542-43 (6th Cir.1989) (even though nontransferable, debtor\u2019s personal injury claim becomes property of the bankruptcy estate, rejecting its decision in In re Baker, 709 F.2d 1063, 1064 (6th Cir.1983) (per curiam), because Baker applied pre-Bankruptcy Reform Act rationale).\n{10} Plaintiffs rely on Scarlett v. Barnes, 121 B.R. 578 (W.D.Mo.1990), as supporting the proposition that they have standing because the case contains a discussion of why malpractice claims are exempt under state law. However, we read Scarlett as being more supportive of Defendants\u2019, rather than Plaintiffs\u2019, position. In Scarlett, the parties agreed that the legal malpractice claim was part of the bankruptcy estate. See id. at 579. They joined issue only on the question of whether a state law exemption applied. See id. Thus, contrary to Plaintiffs\u2019 contention, Scarlett actually illustrates the new approach of the Bankruptcy Code.\n{11} In short, the issue posed by Plaintiffs of the assignability of their claims against Defendants under New Mexico law is no longer relevant under the scheme of the Bankruptcy Code. Plaintiffs\u2019 interests in claims against Defendants were part of the bankruptcy estate once Plaintiffs filed their bankruptcy petition.\nPlaintiffs\u2019 Request for Remand\n{12} After the district court ruled on summary judgment, Plaintiffs filed a motion in the United States Bankruptcy Court to reopen their bankruptcy case requesting that the trustee abandon the claims against Defendants so that Plaintiffs may continue to pursue them. The bankruptcy court reopened the case and ordered the reappointment of the trustee. On April 28, 1997, the bankruptcy court entered an order granting Plaintiffs\u2019 requested relief. The order: (1) revoked the previously entered discharge and again dismissed the proceeding; (2) maintained \u201c[a]ll previous, non-appealable orders ... in full force and effect\u201d; and (3) discharged the trustee and ratified all previously-approved actions of the trustee \u201cincluding but not limited to administration of assets or disbursements to creditors or parties in interest.\u201d\n{13} Plaintiffs urge that on the basis of the bankruptcy court\u2019s 1997 dismissal, we remand to the district court \u201cfor a new ruling absent the existence of any bankruptcy.\u201d We decline to do so because Plaintiffs have not provided the proper predicate for us to consider taking such action.\n{14} This court is a court of review which does not review questions which were not before the trial court. See Cockrell v. Cockrell, 117 N.M. 321, 323, 871 P.2d 977, 979 (1994). A party may file a motion to remand to the district court to permit the district court to entertain a post-judgment motion which the trial court \u201ccould not have considered ... having lost jurisdiction by reason of the appeal.\u201d Terrel v. Duke City Lumber Co., 86 N.M. 405, 436, 524 P.2d 1021, 1052 (Ct.App.1974), rev\u2019d on other grounds, 88 N.M. 299, 540 P.2d 229 (1975). We will grant such a request: (1) \u201conly upon a showing of exceptional circumstances;\u201d and (2) only \u201cin those cases where it is reasonably apparent that the [tjrial [cjourt would be disposed to grant such a motion.\u201d Id.\n{15} We do not believe that exceptional circumstances justifying remand exist in this case because we do not agree with Plaintiffs\u2019 contention that the bankruptcy court\u2019s April 28, 1997 order restored to them all rights to pursue their claims against Defendants as if the bankruptcy proceedings had not occurred. Under their theory, Plaintiffs would have had all rights of action continuously from the date their causes of action originated. Plaintiffs argue: \u201cThere was no bankruptcy, there was no discharge, there was no trustee; therefore, there was no Standing issue.\u201d Although we agree with Plaintiffs that the bankruptcy court\u2019s order returns the rights of action to Plaintiffs, we believe that it does so effective as of the date of the order, not retroactively.\n{16} The Bankruptcy Code provides that when the bankruptcy court dismisses a case, unless the court orders otherwise, the dismissal \u201crevests the property of the estate in the entity in which such property was vested immediately before the commencement of the case.\u201d 11 U.S.C. \u00a7 349(b)(3). By virtue of the Bankruptcy Code, the April 28, 1997 order revested Plaintiffs\u2019 claims against Defendants in Plaintiffs. The language of the Bankruptcy Code does not, however, indicate that Plaintiffs held the claims as if they had not filed a bankruptcy petition. Instead, the express language of the Bankruptcy Code indicates to the contrary. The language of Section 349(b)(3) states that the property \u201crevests\u201d in any entity in which it \u201cwas vested.\u201d The import of the words which Congress chose is that there exists a period of time in which the property was not vested in the entity in which it \u201crevests.\u201d Indeed, that period of time is the pendency of the bankruptcy proceeding. See State v. Ogden, 118 N.M. 234, 242, 880 P.2d 845, 853 (1994) (plain language is primary indicator of intent).\n{17} In addition, the language of the April 28, 1997 order expressly demonstrates that it is not to have nunc pro tunc effect. The bankruptcy court provides in its order that:\n2. All previous, non-appealable orders of this Court shall remain in full force and effect despite the terms of this order.\n4. All actions of the Trustee in this case which were approved by this Court prior to this order, including but not limited to administration of assets or disbursements to creditors or parties in interest, are hereby ratified and not affected by dismissal of this case.\nBy recognizing and giving effect to its prior actions in the case before it, the bankruptcy court did not intend to dismiss the case in such a manner that it became a nullity. Rather, the order reflects the opposite \u2014 that the bankruptcy court intended that its actions and the actions of the trustee during the pendency of the case had full effect despite the dismissal of the case.\n{18} Plaintiffs rely on In re Sports & Science, Ind., Inc., 95 B.R. 745 (Bankr. C.D.Cal.1989), and the legislative history of the Bankruptcy Code for the proposition that \u201cthe purpose of \u00a7 349(b) is to \u2018undo the bankruptcy case, as far as practicable, and to restore all property rights to the position in which they were found at the commencement of the case.\u2019 \u201d Id. at 747 (quoting H.R.Rep. No. 95-595, at 338 (1977), U.S.Code Cong. & Admin.News 1978, pp. 5787, 6294).\n{19} Neither Section 349(b) nor the April 28, 1997 order supports Plaintiffs\u2019 position that the claims revert back to Plaintiffs without giving effect to the existence of bankruptcy ease. The legislative history does not contemplate \u201cundoing\u201d all actions during the proceedings, see H.R.Rep. No. 95-595, at 338; S.Rep. No. 95-989, at 49 (1978), and the bankruptcy court, in its order, gave recognition to its prior orders. We cannot ignore the facts. Plaintiffs filed a bankruptcy petition, their assets became part of the bankruptcy estate, the trustee administered the estate, and the bankruptcy court entered valid orders affecting the rights of parties. Under Section 349(b), the claims reverted to Plaintiffs only as of the April 28, 1997 order. Cf. In re Searles, 70 B.R. 266, 270 (D.R.I. 1987) (\u201conly the property left in the estate at the time of dismissal\u201d reverts under Section 349(b)). As a result, the reopening of the bankruptcy proceedings does not demonstrate exceptional circumstances supporting remand of this case.\n{20} Additionally, Plaintiffs have not addressed the requirement for remand that the district court would be disposed to grant Plaintiffs\u2019 requested relief. See Terrel, 86 N.M. at 436, 524 P.2d at 1052; State v. Gardner, 95 N.M. 171, 175, 619 P.2d 847, 851 (Ct.App.1980) (party presenting motion has burden to come forward with evidence sufficient to raise an issue as to the relief claimed in the motion). Having failed to meet their burden, Plaintiffs have not shown that remand is appropriate in this case.\nConclusion\n{21} Plaintiffs misread the bankruptcy law. As we conclude that their claims were part of the bankruptcy estate, and, as a result, the bankruptcy trustee was the real party in interest at the time of the complaint, the district court properly granted summary judgment. We decline Plaintiffs\u2019 request for remand and affirm the district court\u2019s judgment.\n{22} IT IS SO ORDERED.\nPICKARD and BUSTAMANTE, JJ., concur.",
        "type": "majority",
        "author": "WECHSLER, Judge."
      }
    ],
    "attorneys": [
      "William A. L\u2019Esperance, Albuquerque, for Appellants.",
      "John M. Brant, Rodey, Dickason, Sloan, Akin, & Robb, P.A., Albuquerque, for Appellees."
    ],
    "corrections": "",
    "head_matter": "1998-NMCA-128\n965 P.2d 318\nRobert EDWARDS and Priscilla Edwards, Husband and Wife, d.b.a. Robert Edwards Construction Company, Plaintiffs-Appellants, v. Gene FRANCHINI, Kenneth R. Wagner, Scott Oliver, Keith F. Franchini, Stephen P. Curtis, Individually and as Partners of Franchini, Wagner, Oliver, Franchini & Curtis, Defendants-Appellees.\nNo. 17770.\nCourt of Appeals of New Mexico.\nMay 26, 1998.\nCertiorari Denied Sept. 9, 1998.\nWilliam A. L\u2019Esperance, Albuquerque, for Appellants.\nJohn M. Brant, Rodey, Dickason, Sloan, Akin, & Robb, P.A., Albuquerque, for Appellees."
  },
  "file_name": "0734-01",
  "first_page_order": 774,
  "last_page_order": 779
}
