Date of Decision:
March 3, 2008
(1) Whether medical expense benefits from Debtors' vehicle insurance policy and personal injury settlement funds received due to Debtors' injuries from a pre-petition auto accident are property of the estate? (2) Whether a post-petition creditor who provided medical services to one of the debtors related to a pre-petition accident had a priority interest in the medical expense benefits from Debtors' vehicle insurance policy or the personal injury settlement funds that were property of the estate?
(1) Both the insurance benefits and the personal injury settlement funds were property of the bankruptcy estate. No party in interest demonstrated how any exclusion under 11 U.S.C. § 541 applied or how state law excluded the property from the estate upon application of § 541(a). (2) No party in interest demonstrated, under applicable bankruptcy or nonbankruptcy law, how the medical provider's post-petition claim could be paid from the insurance proceeds and settlement funds that were property of the bankruptcy estate.
Full Bankruptcy Court Decision: