WA Case Update: Bankruptcy: Unreported Post-Petition Claims May Be Viable

From the desk of Kyle Riley: Can a plaintiff’s Chapter 13 Bankruptcy Plan bar a future personal injury lawsuit?

Claims Pointer: In the following case, The Court of Appeals determined that where a plaintiff fails to disclose a personal injury claim in a pending Chapter 13 bankruptcy, and either the bankruptcy plan has not yet been confirmed or the plan specifically requires disclosure, the future personal injury claim may be barred. However, non-disclosure of a claim in a pending bankruptcy does not automatically lead to the barring of a future suit, particularly where the plaintiff did not intend to conceal the claim.

Arp v. Riley, No. 72613-7-I, Court of Appeals of Washington, Division I (December 28, 2015).

Benjamin C. Arp (Arp) filed a Chapter 13 bankruptcy petition on July 22, 2008. The bankruptcy court confirmed Arp’s plan on December 17, 2009. The confirmation order required him to inform the bankruptcy trustee of any change in circumstances and allowed Arp to retain his property. On October 5, 2010, following the confirmation order, a sports utility vehicle (SUV) rear-ended Arp’s stopped car. The SUV was driven by James Riley while he was working for the Sierra Construction Company. Arp sustained physical injuries as well as mental and emotional problems, including difficulty with memory. Following the accident, Arp missed several Chapter 13 bankruptcy payments, totaling $2,875.00. In November 2011, the trustee moved to dismiss Arp’s bankruptcy case. The trustee subsequently struck the motion after Arp responded stating he forgot to make the payments due to the accident and his memory loss and also noted that he had paid $154,336.42 to his creditors under his Chapter 13 plan. In March 2012, Arp was granted a discharge in the bankruptcy case. Arp paid off his remaining debts according to the plan, and his bankruptcy case was closed in April 2012.

Arp later filed suit against Riley as well as Sierra Construction Company. Sierra’s amended answer...

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