Robb, J.
Case Summary and Issues
Willie Gauldin filed for Chapter 7 bankruptcy in July 2012 and was discharged in November 2012. In March 2014, Gauldin filed with the Indiana Department of Insurance a proposed complaint for medical malpractice against Anonymous Physician #1, Anonymous Physician #2, Anonymous Physician #3, Anonymous Nurse Practitioner, Anonymous Hospital, and Anonymous Corporation (collectively, the “Medical Providers”), alleging acts of negligence occurring in March and April 2012. The Medical Providers filed motions for preliminary determination in the trial court seeking to have the proposed complaint dismissed because the medical malpractice claim had not been included as a possible asset in the bankruptcy. Richard W. Lorenz, the trustee of Gauldin’s bankruptcy estate (the “Trustee”), thereafter filed a motion for relief from judgment in the bankruptcy court. The bankruptcy court granted the motion, reopened the bankruptcy, and reappointed the Trustee. The Trustee sent an amended proposed medical malpractice complaint naming the Trustee as plaintiff to the Department of Insurance and also moved the trial court to substitute the Trustee as the real party in interest. The trial court did not rule on the motion to substitute but granted the Medical Providers’ motions for preliminary determination and ordered the proposed complaint be dismissed.
The Trustee now appeals, raising the following consolidated and reordered issues for our review: 1) whether the trial court had subject matter jurisdiction to rule on the motions for preliminary determination after the bankruptcy court reopened the bankruptcy; and 2) if so, whether the trial court erred in dismissing the proposed complaint. Concluding the trial court had jurisdiction to rule on the motions but erred in dismissing the proposed complaint, we reverse.
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Gauldin, as the party injured by the Medical Providers’ alleged negligence, has standing to sue because he suffered a direct injury as a result of the conduct at issue. However, because the negligence took place—and his cause of action accrued—before he filed for bankruptcy, his cause of action is an asset of his bankruptcy estate, and the Trustee is the real party in interest for purposes of prosecuting the action. To remedy this defect, Gauldin’s bankruptcy was reopened, and he moved to substitute the Trustee as plaintiff on the proposed complaint. Trial Rule 17(A)(2) provides,
[n]o action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time after objection has been allowed for the real party in interest to ratify the action, or to be joined or substituted in the action. Such ratification, joinder, or substitution shall have the same effect as if the action had been commenced initially in the name of the real party in interest.
By its clear language, Trial Rule 17 encourages allowing the real party in interest to be joined or substituted in the action, and such substitution relates back to the date the initial complaint was filed. Blackford v. Boone Cnty. Area Plan Comm’n, 43 N.E.3d 655, 667-68 (Ind. Ct. App. 2015). Thus, in Hammes, our supreme court held that “[b]ecause the [bankrupt] parties had standing to sue, but simply were not the real parties in interest, they should be permitted to amend their original complaints to add their respective bankruptcy trustees to be substituted as real parties in interest, and have that amendment relate back to the original filing . . . .” 659 N.E.2d at 1030.
Because Gauldin had standing to sue, he was allowed to amend his proposed complaint to name the Trustee as the real party in interest and have that amendment relate back to the time of the original filing. [Footnote omitted] To the extent the trial court granted the motions for preliminary determination based upon Gauldin’s lack of standing or failure to prosecute in the name of the real party in interest, it erred. [Footnote omitted.]
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Conclusion
The trial court erred in granting the Medical Providers’ motions for preliminary determination as neither lack of standing nor judicial estoppel serves as a basis for dismissing the proposed complaint. The judgment of the trial court is reversed.
Reversed.
Vaidik, C.J., and Pyle, J., concur.