Rodney Tow, Trustee for the Bankruptcy Estate of Erwina v. Scott K. Pagano, D.C. and Campbell Chiropractic Wellness Center

Opinion issued November 5, 2009

In The

Court of Appeals

For The

First District of Texas

NO. 01-07-00464-CV

RODNEY TOW, AS TRUSTEE OF THE BANKRUPTCY ESTATE OF

ERWINA CONSUNJI AND BERNARDINO CONSUNJI, Appellant

v.

SCOTT K. PAGANO, D.C. AND CAMPBELL CHIROPRACTIC CLINIC,

P.C., D/B/A CAMPBELL CHIROPRACTIC WELLNESS CENTER,

Appellees

On Appeal from the 333rd District Court

Harris County, Texas

Trial Court Cause No. 2006–23838

O P I N I O N

In this medical malpractice suit, the trial court granted summary judgment in

favor of defendant/appellees, Scott K. Pagano, D.C. (“Dr. Pagano”) and Campbell

Chiropractic Clinic, P.C., d/b/a Campbell Chiropractic Wellness Center (“Campbell

Chiropractic Clinic”), against plaintiff/appellant, Rodney Tow, as Trustee of the

Bankruptcy Estate of Erwina Consunji and Bernardino Consunji (“Tow”). The trial

court’s order identifies two grounds supporting summary judgment against Tow. The

order states that Tow’s claims are barred by the statute of limitations or, alternatively,

by the doctrine of judicial estoppel. On appeal, Tow asserts two issues challenging

each ground supporting summary judgment.

We reverse and remand.

Factual & Procedural Background

In April and May of 2004, Bernardino Consunji sought treatment from Dr.

Pagano, a chiropractor, at the Campbell Chiropractic Clinic. On November 30, 2004,

Consunji notified Dr. Pagano and the Campbell Chiropractic Clinic that he had

sustained injuries during his treatment at the clinic and that the injuries were caused

by Dr. Pagano’s negligence.

On October 15, 2005, Consunji and his wife, Erwina, filed for Chapter 7

bankruptcy. The Consunjis did not list the medical liability claim against Dr. Pagano

and Campbell Chiropractic Clinic as an asset in their bankruptcy schedules. On April 18, 2006, Consunji filed a medical malpractice suit in state court

against Dr. Pagano and Campbell Chiropractic Clinic (hereinafter collectively

“appellees”). At that time, the bankruptcy case remained pending. Consunji did not

inform the bankruptcy trustee, Rodney Tow, of the suit’s filing.

The Consunjis received a no-asset discharge on May 5, 2006, and the

bankruptcy case was closed. Trustee Tow did not learn of the Consunji’s medical

liability claim during the pendency of the bankruptcy case.

On October 10, 2006, appellees filed a motion for summary judgment against

Consunji. Appellees asserted that Consunji’s medical liability claim was barred by

judicial estoppel because he had not disclosed the claim in the bankruptcy

proceeding.

Tow first learned of Consunji’s pending lawsuit and the medical liability claim

on October 18, 2006. Based on this newly learned information, Tow filed an

emergency motion to reopen the bankruptcy case, which was granted by the

bankruptcy court.

On October 27, 2006, a first amended petition was filed in the medical liability

suit, adding Tow as a plaintiff. Tow alleged that he was “the duly appointed Chapter

7 trustee of the bankruptcy estate.” He further alleged that when the Consunjis filed

for bankruptcy, all of their assets, including the causes of action asserted in the

lawsuit, “vested in” the bankruptcy estate. The petition averred that Tow, as the

bankruptcy trustee, “is the owner of all such assets and causes of action and is duly

authorized to pursue them on behalf of the [bankruptcy] estate.”

On November 3, 2006, the trial court granted appellees’ motion for summary

judgment against Consunji on the ground that his claims were barred by judicial

estoppel. Tow’s claim on behalf of the bankruptcy estate remained pending.

Appellees filed a second motion for summary judgment. Appellees asserted

that judicial estoppel extended to bankruptcy trustee Tow. They argued that judicial

estoppel bars Tow’s pursuit of Consunji’s medical liability claim because, as trustee,

Tow “stepped into the shoes” of bankruptcy debtor Consunji. Appellees claimed that

Consunji’s failure to disclose the claims in the bankruptcy proceeding was imputed

to Tow and operated to bar Tow’s claims as well.

Tow replied that a bankruptcy trustee acquires the rights and liabilities of the

bankruptcy debtor at the time the bankruptcy petition is filed. Tow contended that

any conduct by the debtor post-petition, such as failing to disclose assets, is conduct

not imputed to the trustee. Tow pointed out that he had neither abandoned the

medical liability claim nor taken any position contrary to making the claim, conduct

he claimed necessary for judicial estoppel to bar his claim.

In their motion for summary judgment, appellees asserted, alternatively, that

Tow’s claims were barred by the two-year limitations period found in Texas Medical

Liability Act (“TMLA”) section 74.251(a). Appellees pointed out that Consunji

alleged he was injured by appellees’ negligent medical treatment on May 10, 2004.

Under section 74.251(a), the two-year limitations period expired on May 10, 2006.

Tow filed his claim as trustee on October 27, 2006.

Appellees acknowledged that Bankruptcy Code section 108(a) provides that

if a limitations period has not expired before the filing of the bankruptcy petition, as

here, a trustee has two years from the filing of the bankruptcy petition to commence

an action. Under section 108(a), Tow had until October 15, 2007 to assert his claims

as bankruptcy trustee against appellees. If section 108(a) applied, Tow’s claims, filed

on October 27, 2006, were timely.

Appellees argued that section 108(a) did not extend the limitations period

beyond that provided in TMLA section 74.251(a). Appellees asserted that section

74.251(a)’s language indicates that the Texas Legislature intended the two-year

limitations period to be the “absolute” time period in which to file a medical liability

claim in Texas, regardless of Bankruptcy Code section 108(a). In support of their

position, appellees relied on language in section 74.251(a) that its provisions applied

“notwithstanding any other law.”

Appellees further asserted that Tow’s claims were time-barred because TMLA

section 74.251(a) is a statute of repose, not a statute of limitations. Appellees

contended that a statute of repose creates a substantive property right. Allowing Tow

to file suit would interfere with that right.

Relying on the Supremacy Clause of the federal constitution, Tow responded

that, to the extent that state statute conflicts with the federal Bankruptcy Code, section

108(a) preempts section 74.251(a). Tow asserted that preemption applied regardless

of whether section 74.251(a) is a statute of repose or a statute of limitations. In further support of its limitations ground, appellees asserted that Tow did not

“step into the shoes” of Consunji when he entered the lawsuit. Rather, Tow and

Consunji are “separate legal entities.” Appellees pointed out that Consunji filed his

claims in his individual capacity for his own benefit, while Tow filed suit as trustee

for the benefit of the bankruptcy estate. Appellees asserted that, as a result, Tow’s

claims do not “relate back” to the filing of Consunji’s claims for limitations purposes.

Tow countered that, in the event section 108(a) was held not to extend the limitations

period, his claims did “relate back” to Consunji’s timely filed claim. Tow asserted

that he was properly substituted in as the real-party-in-interest in the amended

petition.

The trial court granted appellees’ Rule 166a(c) motion for summary judgment.

In its order, the trial court specified that Tow’s claims were barred by the statute of

limitations or, alternatively, by the doctrine of judicial estoppel. Tow appeals,

challenging both summary judgment grounds.

Summary Judgment Standard

The summary-judgment movant must conclusively establish its right to

judgment as a matter of law. See MMP, Ltd. v. Jones , 710 S.W.2d 59, 60 (Tex. 1986).

Because summary judgment is a question of law, we review a trial court’s summary

judgment decision de novo. See Valence Operating Co. v. Dorsett , 164 S.W.3d 656,

661 (Tex. 2005).

To prevail on a “traditional” summary-judgment motion, asserted under Rule

166a(c), a movant must prove that there is no genuine issue regarding any material

fact and that it is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c);

Little v. Tex. Dep’t of Criminal Justice , 148 S.W.3d 374, 381 (Tex. 2004). A

defendant moving for traditional summary judgment must either (1) disprove at least

one element of the plaintiff’s cause of action or (2) plead and conclusively establish

each essential element of an affirmative defense to rebut the plaintiff’s cause. See

IHS Cedars Treatment Ctr. of DeSoto, Texas, Inc. v. Mason , 143 S.W.3d 794, 798

(Tex. 2004). A matter is conclusively established if reasonable people could not

differ as to the conclusion to be drawn from the evidence. See City of Keller v.

Wilson , 168 S.W.3d 802, 816 (Tex. 2005).

In our review, we take the nonmovant’s competent evidence as true, indulge

every reasonable inference in favor of the nonmovant, and resolve all doubts in favor

of the nonmovant. Diversicare Gen. Partner, Inc. v. Rubio , 185 S.W.3d 842, 846

(Tex. 2005). We consider all grounds on which the trial court ruled that are preserved

for review and that are necessary for disposition of the appeal. Cincinnati Life Ins.

Co. v. Cates , 927 S.W.2d 623, 626 (Tex. 1996).

Judicial Estoppel

In his first issue, Tow asserts that the trial court erred by granting summary

judgment because judicial estoppel does not prevent him, as bankruptcy trustee, from

prosecuting claims that Consunji did not disclose in the bankruptcy proceeding.

A. Legal Principles

Because this issue arises in the bankruptcy context, we apply federal law to

decide whether judicial estoppel bars Tow’s claims. See Bailey v. Barnhart Interest,

Inc ., 287 S.W.3d 906, 909 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (applying

Fifth Circuit law to determine whether trustee’s state court claims were barred by

judicial estoppel because debtor failed to disclose claims in bankruptcy filings); see

also Brown v. Swett & Crawford of Tex., Inc ., 178 S.W.3d 373 , 380–81 (Tex.

App.—Houston [1st Dist.] 2005, no pet.) (utilizing Fifth Circuit law to determine

whether judicial estoppel applied to bar claims based on representations made in

bankruptcy petition).

The doctrine of judicial estoppel applies when a party seeks to bring a claim

that is inconsistent with a claim asserted in a prior proceeding. Kane v. Nat’l Union

Fire Ins. Co. , 535 F.3d 380, 385 (5th Cir. 2008). The doctrine protects the integrity

of the judicial process by preventing a party from “playing fast and loose” with courts

to suit the party’s own purposes. Id. Generally, courts apply the equitable doctrine

when “intentional self-contradiction is being used as a means of obtaining unfair

advantage in a forum provided for suitors seeking justice.” In re Coastal Plains, Inc .,

179 F.3d 197, 206 (5th Cir. 1999); see Kane , 535 F.3d at 385 .

The Fifth Circuit has recognized three particular requirements that must be met

for judicial estoppel to apply: “(1) the party is judicially estopped only if its position

is clearly inconsistent with the previous one; (2) the court must have accepted the

previous position; and (3) the non-disclosure must not have been inadvertent.” Kane ,

535 F.3d at 386 (quoting In re Superior Crewboats, Inc. , 374 F.3d 330 , 334–35 (5th

Cir. 2004)).

B. Analysis

Briefing in the trial court and on appeal focuses on whether judicial estoppel

bars Tow’s claims based on Consunji’s failure to list the medical liability claim in the

bankruptcy schedule. Appellees rely on In re Superior Crewboats to support their

argument that judicial estoppel bars Tow’s claims based on Consunji’s conduct. See

374 F.3d at 336.

In re Superior Crewboats involved debtors who pursued unscheduled claims

that the bankruptcy trustee had formally abandoned. See id. at 334–35. The Fifth

Circuit concluded that judicial estoppel barred the debtor’s pursuit of the claims

because such pursuit benefitted the debtors to the detriment of the creditors. See id.

at 336; see also In re Coastal Plains, Inc ., 179 F.3d at 213 (holding that judicial

estoppel prevented corporate debtor’s CEO from benefitting from corporate debtor’s

earlier failure to disclose claim). The Superior Crewboats court further held that the

trustee’s motion to substitute as plaintiff for the debtors became moot once judicial

estoppel operated to bar the debtors’ claims. 374 F.3d at 336 .

Appellees acknowledge that, unlike the trustee in Superior Crewboats , Tow

never abandoned the claims in this case. Nonetheless, appellees’ motion for summary

judgment asserted that judicial estoppel bars Tow’s claims because “a trustee steps

into the shoes of the debtor, assumes all rights and liabilities held by the estate at the

time of the bankruptcy filing, and is also subject to any defenses that could be

asserted against the debtor.” Appellees reasoned, “Thus, if judicial estoppel prevents

the debtor from pursuing a claim, then it will also prevent the trustee who has stepped

into the debtor’s shoes from pursuing the same claims.”

In his response, Tow countered, “As a matter law, upon commencement of a

bankruptcy case, the trustee, as the representative of the estate, steps into the shoes

of the debtor but only as to any rights and liabilities which the debtor possessed at the

time of filing the bankruptcy case.” Tow continued, “When a trustee prosecutes a

right of action derived from the debtor, the trustee stands in the shoes of the debtor,

subject to any pre-petition defenses.” Tow concluded, “In short, [appellees’]

argument that the Trustee is subject to any defenses that [appellees] would have

against [Consunji], including the post-petition failure to disclose an asset, is simply

incorrect.”

The law supports Tow’s position. Under Bankruptcy Code section 541,

Consunji’s medical liability claim vested in the bankruptcy estate when Consunji

filed his bankruptcy petition. See 11 U.S.C. § 541 (a)(1) (2006) (providing that

bankruptcy estate includes “all legal or equitable interest of the debtor in property as

of the commencement of the case”); see also Kane , 535 F.3d at 385 . Because the

medical liability claim belongs to the bankruptcy estate, Tow, as trustee, is the real

party in interest and the only party with standing to assert the claim. See 11 U.S.C.

§§ 323 , 541(a)(1); see also Kane , 535 F.3d at 385 . The filing of the bankruptcy

petition extinguished all of Consunji’s rights in the medical liability claim. See

Parker v. Wendy’s Int’l, Inc ., 365 F.3d 1268, 1272 (11th Cir. 2004). The claim would

have reverted to Consunji had Tow abandoned it under Bankruptcy Code section 554;

however, no such abandonment occurred. See 11 U.S.C. § 554 (2006). Consunji’s

failure to list the claim on the bankruptcy schedule leaves the claim in the bankruptcy

estate. See Kane , 535 F.3d at 385 ; Parker , 365 F.3d at 1272 . When Consunji received

his bankruptcy discharge, the medical liability claim remained the property of the

estate, even though it was unscheduled and not administered. See 11 U.S.C. § 554 (d);

Kane , 525 F.3d at 385; Parker , 365 F.3d at 1272 . Taken together, the facts and

applicable law compels the conclusion that judicial estoppel cannot be applied against

Tow based on Consunji’s post-bankruptcy failure to disclose the claim. See Parker ,

365 F.3d at 1272 ; see also Bank of Marin v. England , 385 U.S. 99, 101 , 87 S. Ct. 274,

276 (1966) (“The trustee succeeds only to such rights as the bankrupt possessed; and

the trustee is subject to all claims and defenses which might have been asserted

against the bankrupt but for the filing of the petition.” ) .

Significantly, since the parties filed their appellate briefing, the Fifth Circuit,

in Kane v. National Union Fire Insurance Co. , answered the question at issue in this

appeal: whether judicial estoppel precludes a Chapter 7 trustee from pursuing an

undisclosed, pre-petition tort claim that was never administered or abandoned by the

trustee. See 535 F.3d at 388 . In deciding the issue, the Fifth Circuit discussed, and

ultimately distinguished, In re Superior Crewboats . See id. at 386–87.

The Kane court explained, “In In re Superior Crewboats, Inc ., we were asked

only to consider whether debtors could pursue claims for their own benefit that they

failed to disclose in their bankruptcy schedules.” Id. at 386 . “[B]ecause the

[ Superior Crewboats ] trustee had abandoned the claim, he was not the real party in

interest and was not entitled to be substituted as such.” Id . “Rather, following the

trustee’s abandonment, the interest in the claim had reverted to the debtors, who then

stood to collect a windfall from their failure to schedule the asset at the expense of

their creditors.” Id. at 386–87.

The Kane court recognized the distinction between the underlying

circumstances in that case and those underlying In re Superior Crewboats. The court

wrote, “In the case before us, the Kanes’ personal injury claim became an asset of

their bankruptcy estate when they filed their Chapter 7 petition. The Trustee became

the real party in interest in the Kanes’ lawsuit at that point and never abandoned his

interest therein.” Id. at 387 .

The Kane court then explained the significance of the distinction:

Thus, unlike in In re Superior Crewboats, Inc .—where the debtors stood

to benefit directly from pursuing their claim at the expense of their

creditors, and the district court’s dismissal of the claim against the

debtors mooted the trustee’s motion to substitute as a matter of

law—here, the Trustee is the real party in interest and has reopened the

Kanes’ Chapter 7 bankruptcy to pursue the Kanes’ claim for the benefit

of the estate’s creditors.

Id. The Kane court concluded that In re Superior Crewboats did not require the

application of the equitable doctrine of judicial estoppel to bar the trustee’s pursuit

of the debtor’s undisclosed claims. See id. The court further concluded that “the only

way the Kanes’ creditors would be harmed is if judicial estoppel were applied to bar

the Trustee from pursuing the claim against Defendants on behalf of the estate.” See

id. The court noted, “In this case, equity favors the Trustee.” See id. In closing, the

Kane court held that In re Superior Crewboats did “not control the outcome” of the

case. See id. at 388

We now apply the Fifth Circuit’s analysis in Kane to the facts at hand. See

Bailey , 287 S.W.3d at 913 .

After the Consunjis filed their bankruptcy petition, Consunji’s medical liability

claim vested in the bankruptcy estate. See Kane , 535 F.3d at 385 . Tow, as trustee

and the representative of the bankruptcy estate, became the real party in interest; he

was the only party with standing to prosecute the claim. See id . Consunji’s filing of

the bankruptcy petition extinguished his rights in the claim, unless the claim was

abandoned by Tow. See id . It is undisputed that Tow never abandoned the medical

liability claim. Instead, Tow reopened the bankruptcy and actively pursued the claim

for the benefit of the estate’s creditors. See id .

In addition, there is no showing that Consunji will directly benefit at the

expense of the creditors from the Tow’s pursuit of the medical liability claims. See

id. at 387 . Although Consunji may benefit to the extent there is a surplus after all

debts and fees have been paid, the Consunjis’ creditors would be harmed if judicial

estoppel prevented Tow from pursuing the claims. See id . at 387. As in Kane , equity

favors the trustee in this case. See id.

Following Kane , we conclude that appellees have not satisfied their summary

judgment burden to show that the doctrine of equitable estoppel bars Tow’s pursuit

of Consunji’s medical liability claim as a matter of law. See Bailey , 287 S.W.3d at

913 (following Kane and reversing summary judgment against trustee that was based

on judicial estoppel). Therefore, we hold that the summary judgment was not

appropriate based on judicial estoppel. See id. To the extent that it based summary

judgment on judicial estoppel, the trial court erred.

We sustain Tow’s first issue.

Limitations Period

In his second issue, Tow contends that the trial court erred by granting

summary judgment on the ground that his medical liability claim is barred by the

statute of limitations.

A. The Statutes

In their summary judgment briefing, appellees maintained that TMLA section

74.251(a) determines the period during which Tow had to file his claim as trustee.

Appellees recognized, but then denied, the application of Bankruptcy Code section

108(a) to extend section 74.251(a)’s limitations period. Tow responded that

Bankruptcy Code section 108(a) determines the period during which he could file the

medical liability claim on behalf of the bankruptcy estate.

TMLA 74.251(a) provides,

(a) Notwithstanding any other law and subject to Subsection (b), no

health care liability claim may be commenced unless the action is filed

within two years from the occurrence of the breach or tort or from the

date the medical or health care treatment that is the subject of the claim

or the hospitalization for which the claim is made is completed;

provided that, minors under the age of 12 years shall have until their

14th birthday in which to file, or have filed on their behalf, the claim.

Except as herein provided this section applies to all persons regardless

of minority or other legal disability.

Tex. Civ. Prac. & Rem. Code Ann . § 74.251(a) (Vernon 2005).

Consunji alleged that he was injured by appellees’ negligent treatment on May

10, 2004. The two-year limitations period prescribed in section 74.251(a) expired on

May 10, 2006. Appellees assert that Tow’s claim, filed on October 27, 2006, was

untimely under section 74.251(a).

Bankruptcy Code section 108(a) provides,

(a) If applicable nonbankruptcy law, an order entered in a

nonbankruptcy proceeding, or an agreement fixes a period within which

the debtor may commence an action, and such period has not expired

before the date of the filing of the petition, the trustee may commence

such action only before the later of—

(1) the end of such period, including any suspension of

such period occurring on or after the commencement of the

case; or

(2) two years after the order for relief.

11 U.S.C. § 108 (a).

Simply stated, Bankruptcy Code section 108(a) allows a trustee to commence

an action on behalf of the debtor’s estate within the period allowed by state law for

such an action or within two years after the filing of a petition for bankruptcy,

whichever is later. See id. ; see also 11 U.S.C. § 301 (2006). Here, the Consunjis

filed their bankruptcy petition on October 15, 2005. Tow contends that section

108(a) extended the period for him to commence the medical liability action on behalf

of the bankruptcy estate until October 15, 2007. Tow maintains that his assertion of

the medical liability claim against appellees on October 27, 2006 was timely under

section 108(a).

B. Analysis

To support summary judgment, appellees asserted in the trial court that section

108(a) does not extend the limitations period because section 74.251(a) sets forth an

“absolute” two-year limitations period. Appellees maintained that the absolute nature

of the limitations period is shown by section 74.251(a)’s language that,

“notwithstanding any other law,” no health care liability claim may be commenced

beyond the specified two-year limitations period. Appellees pointed to Bala v.

Maxwell in which the Texas Supreme Court held, based on the “notwithstanding any

other law” language, that the limitations provision of section 74.251(a) governed over

the limitations provision of the Texas wrongful death statute. 909 S.W.2d 889 ,

892–93 (Tex. 1995).

Appellees also stressed the important underlying policy reasons for TMLA’s

enactment as support for their position that section 74.251(a)’s limitations provision

governs over that of section 108(a). Appellees pointed out that the Supreme Court

of Texas has acknowledged that the impetuses for the enactment of the predecessor

statutes of TMLA were concerns over insurance rates and the cost of healthcare. See

Sax v. Votteler , 648 S.W.2d 661, 666 (Tex. 1983). Appellees also pointed to the

supreme court’s comment in Morrison v. Chan regarding a TMLA predecessor

statute: “The Legislature enacted the Medical Liability and Insurance Improvement

Act to alleviate a perceived medical malpractice insurance crisis in the State of Texas.

In an effort to accomplish this goal, the Legislature adopted an absolute two-year

limitations period.” 699 S.W.2d 205, 208 (Tex. 1985).

Appellees also stressed that the legislature crafted section 74.251(a) in a

fashion to make the discovery rule inapplicable to medical liability claims. Again,

appellees suggested this evinces the legislature’s intent that section 74.251(a) be the

only statute of limitations applicable to medical liability claims.

Lastly, appellees asserted that section 108(a) cannot extend the limitations

period found in TMLA because section 74.251(a) is a statute of repose, not a statute

of limitations. Appellees argued that, as a statute of repose, section 74.251(a) creates

a substantive right to be free from liability after the expiration of the legislatively

defined two-year period. Appellees’ intimate that section 108(a) cannot be applied

to a statute of repose because such application would infringe on appellees’

substantive property rights.

In Stanley v. Trinchard , the Fifth Circuit recently decided whether section

108(a) applies to a state statute of repose. 579 F.3d 515 (5th Cir. 2009). Stanley is

instructive not only in our determination of the statute-of-repose sub-issue, but also

in determining generally the issue of whether section 108(a) extends the limitations

period in this case.

In Stanley , the bankruptcy trustee sued Trinchard, an attorney, in federal

district court on behalf of the debtor’s estate, asserting claims for legal malpractice.

Id. at 516 . Trinchard moved for summary judgment on the ground that the trustee’s

lawsuit was barred by Louisiana’s one-year peremptive period for legal malpractice

claims.

See id. at 517 . The district court granted summary judgment, and the trustee

appealed to the Fifth Circuit. See id.

On appeal, the issue was framed as follows: “The question here is whether

Louisiana’s peremptive statute, which controls the estate’s claim, is somehow exempt

from § 108 because of its status as a statute of repose.” Id. at 518. The court

answered this question in the negative: “Because Congress expressed an overriding

and unqualified interest in allowing bankruptcy trustees sufficient time to discover

causes of action on behalf of their estates, we hold that § 108(a) of the Bankruptcy

Code, 11 U.S.C. § 108 (a), extended Louisiana’s legal malpractice peremption

period.” Id. at 516 .

In support of its holding, the Fifth Circuit provided the following analysis:

The subject of bankruptcy falls within the express constitutional powers

of Congress, and bankruptcy law therefore takes precedence over state

laws under the Supremacy Clause. U.S. Const., art. VI. Section 108(a)

is written broadly to extend any “period [fixed inter alia by ‘applicable

nonbankruptcy law’] within which the debtor may commence an action.”

The statute’s clear purpose is to afford bankruptcy trustees extra time to

assess and pursue potential assets of the debtor’s estate. Congress drew

no distinction among the state law vehicles that govern time limits for

filing suit, whether statutes of limitations or prescription, repose or

peremption. The language of Section 108(a) compels the conclusion

that Congress expressly extended the time for pursuing any action that

would otherwise be time-barred under state law.

Id. at 519 .

We agree with the Fifth’s Circuit’s analysis. Section 108(a)’s purpose is self-evident: it is to provide the trustee with additional time to evaluate and to prosecute

the debtor’s potential claims as assets of the bankruptcy estate. Equally as clear, as

noted by the Fifth Circuit, is that section 108(a)’s application is without qualification.

Under its plain language, section 108(a) applies to all statutes defining a time period

for filing suit. Section 108(a) makes no exception for statutes of repose.

Nor does

it restrict its application to statutes of limitations.

In addition, section 108(a) does not exclude from its reach statutes that serve

to advance an important state interest such as regulation of heath care liability. In

short, Congress did not make the application of section 108(a) dependent on the

limitation statute’s nature, type, language, or underlying purpose. The Fifth Circuit

correctly concluded, “The language of Section 108(a) compels the conclusion that

Congress expressly extended the time for pursuing any action that would otherwise

be time-barred under state law.” Id. (emphasis added).

Further, we note that section 74.251(a)’s “notwithstanding any other law”

language does not in any fashion trump the language of section 108(a). To the

contrary, “state law is naturally preempted to the extent of any conflict with a federal

statute.” Crosby v. Nat’l Foreign Trade Council , 530 U.S. 363, 372 , 120 S. Ct. 2288,

2294 (2000). The United States Supreme Court has explained that preemption will

be found when, “under the circumstances of a particular case, the challenged state law

stands as an obstacle to the accomplishment and execution of the full purposes and

objectives of Congress.” Id. at 373 , 120 S. Ct. at 2294 (citing Hines v. Davidowitz ,

312 U.S. 52 , 66–67, 61 S. Ct. 399 (1941)).

Here, reading section 74.251(a)’s “notwithstanding any other law” language

to require application of that statute’s limitations period to Tow’s claims would stand

as an obstacle to the accomplishment of Congress’s full purposes and objectives

under section 108(a). As discussed, section 108(a)’s plain language makes clear that

Congress’s objective of enactment was to provide the bankruptcy trustee with

sufficient time to evaluate and to pursue causes of action for the benefit of the

bankruptcy estate. Congress determined that sufficient period of time to be two years

from the filing of the bankruptcy petition. In this case, applying section 74.251(a)’s

limitations period would reduce Tow’s post-bankruptcy time to bring suit from two

years, under section 108(a), to seven months. Allowing section 74.251(a) to shorten

the time period specifically defined by Congress would subvert the underlying

purpose of section 108(a), frustrate Congress’s overriding objective, and create a

direct conflict with section 108(a).

To the extent that it conflicts with section 108(a), section 74.251(a) is

preempted. Section 108(a) extends section 74.251(a)’s limitations period. Tow had

until October 15, 2007 to commence the medical liability action on behalf of the

bankruptcy estate.

Thus, his October 27, 2006 claim was timely filed.

We conclude that appellees are not entitled to summary judgment based on

limitations.

To the extent that it based summary judgment on appellees’ limitations

defense, we hold that the trial court erred.

We sustain Tow’s second issue.

Conclusion

We hold that appellees were not entitled to summary based on judicial estoppel

or based on limitations. We reverse the judgment of the trial court and remand for

further proceedings.

Laura Carter Higley

Justice

Panel consists of Justices Higley, Sharp, and Mirabal.