NCBRC REPORT
for purposes of determining estate
property under section 541, on the other
hand, while also broad, “is not intended
to expand the rights of the debtor
against others more than they exist
at the commencement of the case.”
Because of this distinction between a
“claim” under section 101(5) and “claim
accrual” for purposes of determining
estate property, the court declined to
adopt the Grossman reasoning.
The trustee also argued that under
Segal v. Rochelle, 382 U.S. 375
(1966), a cause of action exists on the
petition date, if it is “sufficiently rooted”
in the pre-bankruptcy past. In that case
the Court held that a tax overpayment
for the tax year ending post-petition
nonetheless was part of the estate
because it offset pre-petition taxes.
The Harber court found that blind
adherence to Segal would be contrary
to the Supreme Court’s decision in
Butner v. United States, 440 U.S. 48
(1979), that property is determined
with reference to state law, and the
plain language of section 541(a). It
therefore adopted a blended test under
which the state law governing accrual
of an action would be considered along
with the Segal “sufficiently rooted”
test. Under this approach a claim
may be part of the bankruptcy estate
if it is predominantly rooted in the
debtor’s pre-bankruptcy history, but by
“happenstance” is not actionable until
post-petition. Because the record did
not indicate whether the injury was one
that developed suddenly or over time,
it was impossible to say that the injury
existed prior to Ms. Harber’s discharge.
The court found that the existence of
an injury was essential to the claim
and was not present at the time of the
bankruptcy petition. Therefore, the
claim did not meet the requirements of
the blended approach.
listed it on their schedules
and did not object when
the trustee excepted it from
abandonment.
The court found that judicial
estopped requires that the
inconsistent positions are
“tantamount to knowing
misrepresentation to or
even fraud on the court.”
Bankruptcy
disclosure
requirements
strongly
encourage
debtors
to
disclose any potential
asset even where that
asset may not ultimately
be found to be property of
the estate. In this case, the
Harbers listed the potential
claim but noted that the hip
replacement was operating
satisfactorily
and
Ms.
Harber had not suffered
any injury. This did not
constitute a waiver of the
right to challenge whether
the claim was property
of the estate. “To call this
an asset of the estate
under the guise of judicial
estoppel simply because it
was disclosed would have
a chilling effect beyond the
boundaries of this case,”
by discouraging debtors
from disclosing potential
claims in the first place.
The court denied
motion for turnover.
the
Harber Bankr. WD
opinion May 2016
Pa
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The trustee next argued that the
Harbers should be judicially estopped
from arguing that the claim was not
property of the estate because they
National Association of Consumer Bankruptcy Attorneys
Summer 2016
CONSUMER BANKRUPTCY JOURNAL
33