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Barnes v. Ozarks Community Hospital of Gravette Clinic And William F. Webb M.D.

Court of Appeals of Arkansas, Division III

January 25, 2017

REUBEN BARNES AND MARGARET BARNES APPELLANTS
v.
OZARKS COMMUNITY HOSPITAL OF GRAVETTE CLINIC AND WILLIAM F. WEBB, M.D. APPELLEES

         APPEAL FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04CV-14-810-2] HONORABLE BRAD KARREN, JUDGE.

         AFFIRMED.

          The Hershewe Law Firm, P.C., by: Lauren Peterson, for appellants.

          Cox, Cox & Estes, by: Walter Cox; and Hyde, Love & Overby, LLP, by: Kent O. Hyde and Shannon A. Vahle, for appellees.

          BART F. VIRDEN, Judge.

         Reuben and Margaret Barnes (hereinafter "the Barneses") appeal the Benton County Circuit Court's decision awarding summary judgment in favor of Ozarks Community Hospital of Gravette Clinic and Dr. William F. Webb (hereinafter "Ozarks"). On appeal, the Barneses argue that the circuit court erred in awarding summary judgment based on its misinterpretation of 11 U.S.C. section 554. The Barneses also assert that the circuit court order granting summary judgment constituted an improper collateral attack on the federal bankruptcy court proceedings. In the alternative, the Barneses argue that if the circuit court's interpretation of 11 U.S.C section 554 was correct, then the circuit court erred when it found that Arkansas Rule of Civil Procedure 17(a) did not apply under the facts of this case. We find no error and affirm.

         I. Facts

         In May 2013, the Barneses filed a bankruptcy petition and listed a medical-malpractice claim against Ozarks in the schedule of assets. On June 16, 2014, the trustee entered a "Final Account and Distribution Report Certification that the Estate has been Fully Administered and Application to be Discharged" ("Final Account"). On line 27 of the "Individual Estate Property Record and Report Asset Cases" form, a "Potential Medical Malpractice Action" with an unscheduled value of $45, 950 was designated "FA, " or "fully administered." In the Final Account a column runs throughout the entire list of assets in which the trustee is instructed to make the notation "OA" if the asset on that line has been abandoned pursuant to 11 U.S.C. section 554(a). The column for line 27, or "Potential Medical Malpractice Action" had been left blank.

         On the same day the Final Account was entered, the Barneses filed a complaint against Ozarks, contending that, as a result of Dr. Webb's failure to diagnose Reuben Barnes' Rocky Mountain Spotted Fever, Reuben had become blind, and he and his wife were entitled to damages and costs. On April 24, 2015, Ozarks filed a motion for summary judgment in which it argued that the Barneses did not have standing to file their complaint because the malpractice claim had not been abandoned at that time; therefore, only the trustee could have filed the claim on that date. Ozarks attached the trustee's Final Account to its motion, which listed the potential medical-malpractice claim among the assets. Ozarks argued that because the Barneses had no standing to file, the complaint was a nullity. The Barneses responded that the claim had been abandoned by the bankruptcy trustee on June 16, 2014, pursuant to 11 U.S.C. section 554(a), and they had a right to pursue the claim.

         The circuit court awarded summary judgment in favor of Ozarks. In the written order filed July 31, 2015, the circuit court found that the medical malpractice claim had not been abandoned by the bankruptcy trustee under section 554(a); therefore, when the Barneses filed the complaint on June 16, 2014, they lacked standing. The circuit court found that the complaint, filed without standing, was a nullity. The circuit court additionally found that abandonment of the medical malpractice claim at the close of the bankruptcy case, pursuant to section 554(c), would not have occurred until July 23, 2014, and that the statute of limitations on the medical malpractice claim expired on June 19, 2014. The circuit court found that Arkansas Rule of Civil Procedure 17 did not apply because the Barnes' complaint was a nullity and because there was no understandable mistake that would allow for the application of the rule. The Barneses filed a timely notice of appeal.

         II. Standard of Review and Applicable Law

         A. Abandonment of the Malpractice Claim and Standing

         Summary judgment is to be granted by the circuit court only when there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. Killian v. Gibson, 2012 Ark.App. 299, at 6, 423 S.W.3d 98, 101. In reviewing a grant of summary judgment, an appellate court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. Id. This court views the evidence in the light most favorable to the party against whom the motion for summary judgment was filed and resolves all doubts and inferences against the moving party. Id.

         When the proof supporting a motion for summary judgment is sufficient, the opposing party must meet proof with proof, and the failure to do so leaves the uncontroverted facts supporting the motion accepted as true for purposes of the motion. See Inge v. Walker, 70 Ark.App. 114, 15 S.W.3d 348 (2000). In response to a motion for summary judgment, the supporting material must set forth specific facts showing that there is a ...


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