Daniel Fields v. Terri Rankin Byrd
Annotate this Case
Download PDF
DIVISION IV
CA03-711
S EPTEMBER 20, 2006
DANIEL FIELDS
APPELLANT
V.
APPEAL FROM THE PERRY COUNTY
CIRCUIT COURT
[NO. CIV 2001-07]
HON. ROBERT L. HENRY III,
JUDGE
TERRI RANKIN BYRD
APPELLEE
REVERSED AND DISMISSED
R OBERT J. G LADWIN, Judge
Appellant Daniel Fields filed this appeal disputing the trial court’s order denying his
motion to set aside default judgment and motion to dismiss, and granting appellee Terri
Rankin Byrd’s motion to strike appellant’s amended answer and her motion to substitute
parties. We reverse and dismiss.
Appellee underwent oral surgery performed by appellant on April 6, 1999, which she
claims left her with a burning sensation on her tongue. After the alleged malpractice
occurred, appellee executed and filed a Chapter 7 voluntary bankruptcy petition on March
24, 2000. The petition did not list or schedule her medical-malpractice claim as an asset or
contingent asset of the estate. When appellee testified about her assets in bankruptcy court
at the first creditors’ meeting, she denied having any claims or litigation against anyone. She
never disclosed her medical-malpractice claim to the trustee. Appellee was discharged from
bankruptcy on July 11, 2000. She filed her medical-malpractice claim against appellant on
January 29, 2001. No answer was filed. Appellee’s motion for default judgment against
appellant was filed March 20, 2001. After appellant received the motion, he filed a belated
answer on April 9, 2001. The trial court granted a partial default judgment on liability in an
order entered January 2, 2002. Appellant filed a motion for continuance and to set aside the
default judgment and dismiss, or alternatively to give notice to the United States bankruptcy
trustee of the pendency of the action on July 24, 2002. On July 31, 2002, appellant filed an
amended answer. Appellee filed a motion to strike the amended answer and a motion to
substitute parties, seeking to substitute Richard L. Cox, bankruptcy trustee, as the real party
in interest. After a hearing on all the motions, the trial court entered an order on March 10,
2003, denying the appellant’s motion to set aside the default judgment and denying his
motion to dismiss. Further, the trial court granted appellee’s motion to strike the amended
answer and her motion to substitute parties. After the trial court ruled in the hearing in favor
of the appellee as to liability, the appellant moved for a stay in order to appeal before the
hearing on damages, and the trial court allowed it. 1
Rule 2(a)(1) of the Arkansas Rules of Appellate Procedure-Civil provides that an
appeal may be taken only from a final judgment, order, or decree entered by the trial court.
Smith v. Smith, 337 Ark. 583, 990 S.W.2d 550 (1999). Whether a final judgment, decree, or
1
The trial court’s order reflects that the motion for a stay of further proceedings
was granted to allow the appellant to file a petition for a writ of prohibition.
-2-
order exists is a jurisdictional issue that this court has the duty to raise, even if the parties do
not, in order to avoid piecemeal litigation. Id. Arkansas Rule of Civil Procedure 54(b)
states that an order which disposes of fewer than all of the claims of all of the parties is not
a final appealable order unless the court makes an express determination that there is a
danger of hardship or injustice, which an immediate appeal would alleviate. See Freeman
v. Colonial Ins. Co., 319 Ark. 211, 890 S.W.2d 270 (1995). When the trial court does not
make the required certification, the order is not final for appellate purposes. Id.
Conversely, Arkansas Rules of Appellate Procedure-Civil 2(a)(4) provides that an
appeal may be taken from a circuit court to the Arkansas Supreme Court from an order which
strikes out an answer, or any part of an answer, or any pleading in an action. The Arkansas
Supreme Court has held that the specific provision for appeal when an answer is stricken
must control over the general provisions contained in Ark. R. App. P. 2(a)(1) and Ark. R.
Civ. P.54(b). Arnold Fireworks Display, Inc. v. Schmidt, 307 Ark. 316, 820 S.W.2d 444
(1991). Therefore, even though the trial court’s ruling is not a final appealable order
because damages have not been tried, the specific rule supplied in Ark. R. App. P. - Civ.
2(a)(4) controls.
Appellant’s first point on appeal is whether the trial court erred in striking appellant’s
amended answer to the complaint, denying the motion to set aside default judgment and
dismiss, and granting appellee’s motion to substitute parties, because appellee did not have
standing and the trial court was without jurisdiction due to appellee’s failure to follow federal
-3-
substantive bankruptcy law concerning pre-bankruptcy petition claims. The standard of
review for denial of a motion to set aside a default judgment is whether the trial court abused
its discretion. B & F Eng'g, Inc. v. Cotroneo, 309 Ark. 175, 830 S.W.2d 835 (1992).
Appellant argues that this case is analogous to wrongful-death claims and survival claims in
that where plaintiffs fail to follow substantive procedures for filing, the complaints are a
nullity and courts are without jurisdiction to consider them. Ramirez v. White County Circuit
Court, 343 Ark 372, 38 S.W.3d 298 (2001).
Congress, pursuant to the United States Constitution, Article 1, Section 8, establishes
uniform laws on the subject of bankruptcy. The bankruptcy trustee is the primary person
responsible for marshaling the assets of the bankrupt estate and for administering the claims
and debts of the debtor. 11 U.S.C. § 541(a) (1994). The debtor has the duty to schedule
assets and to cooperate with the trustee in the performance of his statutory duties. 11 U.S.C.
§ 521 (1), (3) (1994). The estate encompasses all legal or equitable interest of the debtor in
property as of commencement of the case. 11 U.S.C. § 541(a)(1).
All property of the estate remains in the estate and does not vest in the interest of the
debtor unless: (1) after notice and hearing the trustee abandons the property; (2) the court
orders abandonment of property that is burdensome to the estate or of inconsequential value
and benefit; or (3) the property is scheduled as an asset and is not otherwise administered in
the bankruptcy. 11 U.S.C. § 554(a)-(c) (1994). However unscheduled assets never vest in
-4-
the debtor and the property remains in the estate even after the bankruptcy case is closed for
all other purposes. 11 U.S.C. § 554(d).
When a trustee is appointed to administer the property of the estate in bankruptcy, he
has the exclusive right to prosecute causes of action that are the property of the bankrupt
estate. 11 U.S.C. §§ 323(a)-(b), 704(1) (1994). Causes of action that accrue prior to the
filing of a petition for relief under the Bankruptcy Act are property of the estate. Bratton v.
Mitchell, Williams, Selig, Jackson & Tucker, 302 Ark. 308, 788 S.W.2d 955 (1990). These
claims include those that were filed by the debtor after discharge, as long as the cause of
action had accrued prior to the filing of bankruptcy. U.S. ex rel. Gebert v. Transport Admin.
Servs., 260 F.3d 909 (8th Cir. 2001). The cause of action must have been abandoned by the
trustee in order for it to be pursued by the debtor. Bratton, supra.
Appellant argues that, like a wrongful-death action, bankruptcy law is statutory, and
thereby strictly construed. Cockrum v. Fox, 359 Ark. 508, ___ S.W.3d___ (2004). Failure
to follow the proper procedures prevents the court from having jurisdiction over the claims.
Ramirez, supra. Here, the claim could only have been brought by the trustee of the estate in
bankruptcy. Appellee’s failure to follow federal law renders her initial complaint void ab
initio. By substituting the trustee, she attempts to save her claim from being time barred.
However, the Arkansas Supreme Court has held that a complaint filed by a party who did not
have standing at the time the complaint was filed does not interrupt the statute of limitations,
and motions to substitute the real party in interest are treated as the filing of a new suit. See
-5-
St. Paul Mercury Ins. Co. v. Circuit Court of Craighead County, 348 Ark. 197, 73 S.W.3d
584 (2002); Ark-Homa Foods, Inc. v. Ward, 251 Ark. 662, 473 S.W.2d 910 (1971); Floyd
Plant Food Co. v. Moore, 197 Ark. 259, 122 S.W.2d 463 (1938).
The court in Floyd Plant Food Co., supra, held that because the corporation named
as the plaintiff in the lawsuit had dissolved before the complaint was filed, and the Federal
Chemical Company took over all its assets, including the notes that were the subject of the
lawsuit, the statute of limitations was not tolled by the filing of the suit by a party with no
interest. An actual party in interest cannot be substituted for one who has no cause of action
at a time when the action would have been barred by limitations but for the previous
institution of proceedings. Floyd Plant Food Co., supra. Further, the Eighth Circuit Court
of Appeals held in U.S. ex rel. Gebert, supra, that a debtor is judicially estopped from
pursuing pre-petition claims where the debtor failed to disclose the claim in the bankruptcy.
Here, the cause of action accrued on the date of the oral surgery, April 6, 1999.
Appellee filed her bankruptcy petition on March 24, 2000, and obtained discharge on July
11, 2000.
She did not list the alleged malpractice claim as an asset or contingent asset of
the estate. Therefore, the alleged medical-malpractice claim accrued before appellee filed
for bankruptcy relief and she was required to disclose the claim to the trustee. Appellee did
not have standing to file the lawsuit against appellant, only the trustee did. Appellee did not
petition the bankruptcy court to obtain an order abandoning the property under 11 U.S.C. §
554. When, after appellant’s objections to her standing, appellee filed a motion to substitute
-6-
the bankruptcy trustee as the real party in interest, the statute of limitations for medicalmalpractice claims had run.
Therefore, appellee did not having standing to file the
complaint, and the trial court erred in granting the motion to substitute the trustee as the real
party in interest, as the statute of limitations prevents a medical-malpractice claim from being
filed more than two years after the alleged wrongful act. Ark. Code Ann. § 16-114-203
(Supp. 2001). Further, the court erred in denying the appellant’s motion to set aside default
judgment and dismiss based upon the appellee’s lack of standing.
Because the malpractice claim was void ab initio, this court does not address the
remaining points on appeal.
We reverse and dismiss.
P ITTMAN, C. J., and G LOVER, J., agree.
-7-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.