The opinion of the court was delivered by: Richard W. Roberts United States District Judge
Debtor Jeanne Duvall appeals the bankruptcy court's decision to overrule her objections to two claims in the amount of $39,756.74, filed against her bankruptcy estate by appellees Kevin Bumbray and Sharon Bumbray Watts. Jeanne*fn1 argues that the bankruptcy court committed error by ruling that her objections to the appellees' claims were barred by res judicata, the appellees' intended third party beneficiary rights were not rescinded, and it was inequitable for Jeanne to assert the right of recession as a defense in the bankruptcy proceedings. Because Jeanne has not shown that the bankruptcy court decision was erroneous, the bankruptcy court's judgment overruling the debtor's objections will be affirmed.
In 1982, Jeanne's mother Henrietta Duvall was awarded a $1,200 monthly annuity from the Maryland Workers' Compensation Commission (WCC) as a result of the death of her husband, Edward Bumbray. (Appellant's Br. at 4.) Henrietta died in 1990 with only one heir, Jeanne, who was appointed as the personal representative of Henrietta's estate. (Id.; Ex. 1, Tr. of Bankr. Hr'g on Objection to Claims 1 and 2 ("Hr'g Tr.") at 115.)) The payor of the annuity (Hartford) informed Jeanne that nothing more was payable on the annuity after Henrietta died. (Appellant's Br. at 5.) Edward's son Elmer Bumbray told Jeanne that he thought that Henrietta's estate was entitled to continue receiving annuity payments. Elmer asked Jeanne if he could try to pursue a claim against Hartford as a child of Edward Bumbray. (Id.) Elmer and Jeanne met with Elmer's lawyer, Barry Chasen, who asked Jeanne to resign as the personal representative of Henrietta's estate, to be replaced by Elmer who would then file a claim against Hartford on behalf of the estate before the WCC. Jeanne claims that she refused to do so because she didn't understand what was going on. (Id.)
In March 1997, Jeanne again met with Elmer and Chasen. At that meeting, Elmer made an offer that if Jeanne successfully pursued the WCC claim against Hartford as the personal representative of Henrietta's estate, Jeanne would receive 16 percent of the proceeds, while Elmer and the other siblings would receive 84 percent. (Appellant's Br. at 5.) Jeanne agreed, and retained Chasen to represent the estate before the WCC. (Id. at 5-6.) The WCC held a hearing, and the claim on behalf of Henrietta's estate was successful. (Id. at 6.) Subsequently, Chasen asked Jeanne to sign checks for the workers compensation proceeds in arrears, in order for Chasen to deposit them. Jeanne hired an attorney of her own, who told her not to sign the checks because the proceeds belonged to the estate, not to Elmer. (Id.) Jeanne's attorney demanded that Chasen provide to him the proceeds from the WCC proceeding to be deposited into Henrietta's estate account. Chasen did not comply, and Jeanne's attorney wrote to Hartford's counsel and demanded that all of the proceeds from the WCC proceeding be sent to him, to be deposited in Henrietta's estate account. The WCC proceeds that Chasen held were delivered to Jeanne's attorney shortly thereafter. (Id.)
In 1999, Elmer sued Jeanne in the Superior Court of the District of Columbia for breach of contract, claiming that he was entitled to the entire amount of the proceeds of the WCC case. (Appellant's Br. at 7; see also Bumbray v. Duvall, Civil Action No. 99-2434 (D.C. Sup. Ct. 1999).) Elmer alleged that under the 1997 agreement ("Agreement") reached between Jeanne and Elmer, Elmer would receive 84 percent of the proceeds generated by the WCC claim (approximately $192,578.40), and Jeanne would receive only 16 percent of the proceeds. (Appellant's Br. at 7.) Jeanne defended the case by arguing that her agreement with Elmer called for proceeds of the WCC claim to be provided to Elmer and his five siblings to the extent that they were legally entitled to the WCC proceeds, not to Elmer alone. (Id. at 8.)
The jury that heard the contract dispute between Elmer and Jeanne was instructed to determine whether Elmer brought the WCC case on his own behalf or on behalf of himself and his siblings. (Id. at 9.) The instruction read:
A party to a contract made in part for the benefit of other parties not named in the lawsuit may sue in that person's own name without joining the parties for whose benefit the action is brought. If you find that Elmer Bumbray brought this action on behalf of some or all of his siblings, you should award him the amount of damages, if any, that you find to have been rightfully due to either [Elmer] or to his siblings. The fact that the action was brought solely by [Elmer] standing alone is not a proper basis for reducing the amount of money awarded him. If you find that Elmer Bumbray brought this action on his own behalf to use at his sole discretion, you may use that fact as a basis for reducing the amount of money awarded to [Elmer].
The measure of damages for a breach of contract is that amount of money necessary to place the injured party in the same economic position [he] would have been in if the contract had not been breached. To calculate the damages, determine the amount of money [Elmer] would have received had the contract not been breached. [Elmer] has the burden of proving all elements of damages by a preponderance of the evidence. You are to award [Elmer] damages to fully compensate him for the defendant's breach. You must not award [Elmer] damages for present or future harm which are speculative or remote, or which are based on guesswork or conjecture.
(Appellant's Br. Ex. 9 Claimant's Ex. 5.) The verdict form asked the jury two questions: 1) to find in favor of either Elmer or Jeanne on Elmer's breach of contract claim, and 2) to answer "on whose behalf did plaintiff Elmer Bumbray bring this lawsuit?" (Appellant's Br. Ex 11, Claimant's Ex. 7.) The jury returned a verdict in favor of Elmer on question one, and they found that Elmer brought the lawsuit on his behalf, not on the behalf of his siblings. The jury awarded Elmer $26,960.98. (Appellant's Br. at 9.)
In 2003, appellees Kevin Bumbray and Watts, Elmer's siblings, filed a complaint alleging breach of contract against Jeanne in the Superior Court of the District of Columbia, seeking portions of the WCC proceeds. (Appellant's Br. at 10.) Jeanne stayed that case by filing a voluntary petition for bankruptcy under Chapter 7. (Id.) In 2005, Kevin filed in the Bankruptcy Court claim #1 against Jeanne in the amount of $46,973.10, and Watts filed claim #2 against Jeanne in the amount of $46,973.10. (Id. at 3.) Jeanne objected to both claims, arguing that the claims were prohibited by the statute of limitations, and that the outcome of Bumbray v. Duvall did not justify the claimants' claims, because the appellees were not intended beneficiaries of the Agreement between Elmer and Jeanne. (Id.)
The Bankruptcy Court held a hearing regarding the claims made by Kevin and Watts. (Appellant's Br. at 3.) At that hearing, the bankruptcy court overruled Jeanne's objections and determined that the claimants were entitled to enforce the oral agreement between Kevin and Jeanne, under which Jeanne agreed that she would be entitled to 16 percent of all proceeds of the WCC enforcement recoveries that she inherited, with the remainder of the proceeds to be divided equally among the other five siblings -- fourteen percent per sibling. (Hr'g Tr. at 114-120; see also In re. Duvall, No. 04-1519 (MT), 2006 WL 3590153 at *1-2 (Bankr. D.D.C. Dec. 6, 2006).) First, the bankruptcy court ruled that the discovery rule applied to preclude the statute of limitations from barring the appellees' claims because they brought their initial action within three years of learning of the existence of the agreement between Jeanne and Elmer. (Hr'g Tr. at 116-117.) The bankruptcy court next determined that the appellees were intended third-party beneficiaries of the contract between Jeanne and Elmer:
I credit [Jeanne's] testimony that the agreement was --the 84 percent was to be divided equally amongst the six siblings, and that's how the division came about. Six into 84 percent is 14 percent. There remains another 16 percent for [Jeanne]. Obviously, the parties agreed upon a share for [Jeanne] that would eliminate fractional percentages for the other siblings. The fact that Elmer Bumbray might have believed that or have asserted that 84 percent was wholly for him is irrelevant because I find that the parties had reached an agreement for 84 percent to be divided six ways amongst the six siblings. And that there was indeed a third-party beneficiary contract.
(Id. at 117.) The court then determined that the claimants' third party beneficiary status was not revoked, because the parties to the Agreement did nothing to revoke ...