Estate of Spirtos v. One San Bernardino County Superior Court Case Numbered SPR 02211

In this case, we are faced with the question of whether a creditor of a bankruptcy-estate has standing to bring a claim on behalf of the estate. We hold that 11 U.S.C. § 323 vests the bankruptcy trustee with the exclusive right to sue on behalf of the bankruptcy estate.

I. FACTS AND PROCEDURAL HISTORY

Basil and Thelma Spirtos were married in 1954. They had six children together, two adopted and four biological. In 1983, Basil and Thelma entered into a Marital Settlement Agreement (“MSA”) which the Los Angeles Superior Court reduced to judgment in 1984. However, Basil breached the MSA, and Thelma filed for bankruptcy under Chapter 11 in 1984. In 2001, the bankruptcy court converted Thelma’s Chapter 11 bankruptcy to a Chapter 7 bankruptcy.

Basil remarried twice, once in 1985 and again in 1988. In 1987, he also filed for bankruptcy under Chapter 11, but later converted the proceeding to a Chapter 7 bankruptcy. Because of Basil’s outstanding obligations to Thelma under their MSA, she is a creditor of Basil’s bankruptcy estate. In 1996, Basil died. His bankruptcy case remains pending to date. David Ray is the bankruptcy trustee.

In October 2002, Thelma filed a complaint against…