In 2005, N. Hurtado and W. Diaz had their debts discharged in bankruptcy.
When they later sought to pursue a 2003 personal injury case, the Queens County Civil Court denied the defendants' dismissal request, and an appeal to the Appellate Term, Second Department, followed.
Since a debtor-in-bankruptcy must give the bankruptcy court a list of all claims, and, because this particular accident wasn't listed on any of the schedules filed with that forum, the AT2 thought the claim remained part of the bankruptcy estate and that N. and W. lacked the requisite ability or "capacity" to maintain the lawsuit.
Was that morally bankrupt?
To view a copy of the Appellate Term's decision, please use this link: Hurtado v. Castelli