In the Matter of Andrew Kanter and Carole Kanter, Bankrupts. Andrew R. Kanter and Carole Kanter v. Richard M. Moneymaker, Trustee

Before WRIGHT and GOODWIN, Circuit Judges, and EAST, District Judge.

The appellant, Andrew Kanter, sustained injuries in an automobile accident in March 1970. In March of the following year, he filed suit in state court and two weeks later petitioned for adjudication as a bankrupt. The trustee, appel-lee herein, asserted that the personal injury lawsuit was an asset of the bankrupt estate and sought a determination to that effect by the bankruptcy judge.

The bankruptcy judge found that among Kanter’s debts were substantial medical bills resulting from the accident which was the subject of the state court action. The judge concluded that title to the personal injury action vested in the trustee and this was affirmed by the district court. In Re Kanter, 345 F.Supp. 1151 (C.D.Cal.1972).

The question before the district court and before us is whether Cal.Code Civ. Pro. § 688.1(b) so frustrates the full effectiveness of sections 70, sub. a(5) and 70, sub. c of the Bankruptcy Act that it is rendered invalid by the Supremacy Clause, Art. VI, Cl. 2. The district court found that the California law was in conflict with the Bankruptcy Act and declared the state provision…