Effect of Bankruptcy on a Personal Injury Claim

I wrote on July 30  about a decision from the 10th Circuit Court of Appeals that addressed the issue of the effect of the failure of a plaintiff in a personal injury action to disclose the existence of the claim on a bankruptcy petition and the failure to disclose the claim during a hearing.

Tennessee Court of Appeals Judge Sharon Lee wrote to tell me about a decision from the Tennessee Court of Appeals (Eastern Section) that addressed the interaction of bankruptcy law and personal injury claims.  Here is the summary paragraph in Headrick v. Bradley County Memorial Hospital  written by Judge Lee:

"In this appeal, the issue presented is whether a party has standing to pursue a personal injury claim in state court that accrued after the filing of the party’s bankruptcy petition and before the closing of the bankruptcy case. Ms. Headrick filed a Chapter 13 bankruptcy petition. While the bankruptcy case was pending, Ms. Headrick was involved in a single car accident and was treated for her injuries by Dr. Daniel Johnson at Bradley County Memorial Hospital. Subsequently, she converted her Chapter 13 bankruptcy case to a Chapter 7 bankruptcy case. While the Chapter 7 case was still pending, she discovered that she suffered a hip fracture in the car accident which she alleges that Dr. Johnson and the Hospital failed to timely diagnose and treat. Thereafter, Ms. Headrick received a discharge in bankruptcy and the bankruptcy case was closed. Ms. Headrick then filed a medical negligence case against Dr. Johnson and Bradley Memorial Hospital. The Defendants filed a motion for summary judgment asserting that Ms. Headrick did not have standing to bring the case. The trial court agreed and dismissed the case. After review of the record and applicable authorities, we hold that Ms. Headrick’s post-bankruptcy cause of action is not part of the bankruptcy estate and therefore, as a matter of law Ms. Headrick did have standing to bring the lawsuit. The trial court’s decision is reversed."

Want to read the entire opinion in Case   No. E2005-00925-COA-R3-CV released January 31, 2006?   Click here.

Thanks for refreshing my recollection, Judge Lee.  And thanks for reading.

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