MO Court of Appeals allows pursuit of medical malpractice claim
The Court of Appeals reversed a trial court’s decision denying a man the chance to pursue his medical malpractice claim because of his bankruptcy.
In a decision handed down last week, the Court of Appeals for the Western District of Missouri granted the appeal of Richard Asmus. Asmus had brought a medical malpractice suit against four physicians and two healthcare facilities for ulcers he claimed were a result of negligence. The defendants argued Asmus could not bring any actions against them since he filed for bankruptcy because technically the only party which could prosecute a personal injury claim owned by Asmus’s estate is the bankruptcy trustee.
Subsequently, the trial court of Cole County ruled Amus could not bring those claims because he filed for Chapter 7 bankruptcy and was no longer eligible to pursue the claim individually.
Eleven days after the court’s ruling, Asmus filed a notice of intended abandonment regarding the claim and petitioned for a motion to reconsider. He included the bankruptcy trustee’s notice of intended abandonment showing the trustee would allow Asmus to pursue the claim individually. The COA found the trial court erred and did not exercise its discretion in their decision.
We do not know the court’s consideration in not granting Plaintiff’s motion to amend to add the trustee, Judge James M. Smart wrote in the opinion, We can speculate that the court thought Plaintiff had been intentionally deceptive in his bankruptcy filing, but there is nothing in the record to confirm that. It is more than likely that the court mistakenly believed that it had no discretion to consider the principle that leave to amend should be freely granted when justice so requires. When it appears that the trial court, because of a misunderstanding of the law, failed to exercise its discretion, we will generally reverse and remand to allow the court to exercise its discretion. State v. Wynne, 204 S.W. 2d 927, 931 (Mo. 1947)
The COA examined the case and found since the asset was not listed as exempt on Asmus’s bankruptcy schedule, it became property of the estate and therefore the estate was the only party allowed to bring a personal injury suit. The COA found although Asmus’s unliquidated medical malpractice claim became part of the bankruptcy estate, unliquidated personal injury actions are not subject to attachment and execution prior to judgment. They are also exempt from the bankruptcy estate under Missouri law.
The court explained the situation could have been avoided with a motion to add the bankruptcy trustee to the lawsuit and while Asmus did make that motion, it was made after the lawsuit. The COA ruled even though it was after the suit was filed, the trial court erred in not granting the motion.
Furthermore, the trial judge has broad discretion to permit amendment of the pleading at any stage of the proceedings, even after the verdict. Sher v. Chand, 889 S.W. 2d at 83: Rule 52.06, Judge Smart wrote, Rule 52.06 provides ‘Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms are just.
The defendants’ main objection was they would have been prejudiced if the court granted the amendment because the addition of the trustee would have created an entirely new claim against them. The COA disagreed.
Granting the amendment to add the bankruptcy trustee would not have created a new cause of action, Judge Smart wrote, All the issues would have remained the same; the only change would have been in the plaintiff.
The COA found no reason for the motion to amend the lawsuit and the addition of the trustee to be denied.
They remanded the issue to the trial court and instructed it to either allow the case to go forward or to provide justification as to why the motion should be denied. Judges Harold L. Lowenstein and Edwin H. Smith concurred on this opinion.
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