Decision: In re Johnathan Glen Maupin, Case No. 25-40104-BRW (Bankr. D. Idaho, 21 Nov. 2025)
Judge: Honorable Brent R. Wilson, United States Bankruptcy Judge
Counsel for Debtor: Paul Ross, Idaho Bankruptcy Law, Paul, Idaho
Counsel for Trustee: Jeffrey P. Kaufman, Office of Kathleen A. McCallister, Meridian, Idaho
Chapter 13 Trustee: Kathleen A. McCallister
Background
Johnathan Maupin filed a Chapter 13 petition on 19 February 2025. In amended schedules filed on 11 April 2025, he disclosed a prepetition legal malpractice claim arising from a divorce proceeding in 2023. The claim was listed as an asset of the bankruptcy estate. The Debtor requested that the Chapter 13 Trustee pursue the claim through counsel; the Trustee declined. Facing an approaching statute of limitations, the Debtor sought a path forward.
The Application
On 14 August 2025, the Debtor filed an Application to Employ Special Counsel under 11 U.S.C. § 327, seeking Court approval to retain Reed Larsen of Cooper & Larsen, Chartered, to prosecute the malpractice claim in state court. The proposed engagement was on a contingency fee basis of 40% of any recovery, whether by settlement or trial, with litigation costs to be paid from any recovery. Larsen filed a verified statement confirming no adverse interests with any creditors, the Trustee, or parties in interest.
The Objection
The Chapter 13 Trustee objected on 3 September 2025, advancing a straightforward textual argument: § 327 authorizes the trustee to employ professional persons with court approval — not the debtor. Because “trustee” and “debtor” are distinct terms of art throughout the Bankruptcy Code, it would be anomalous to read § 327 as extending to a chapter 13 debtor who holds no trustee powers. The Trustee cited In re Smith, 637 B.R. 758 (Bankr. S.D. Ga. 2022), and the Eleventh Circuit’s observation in In re Cumbess, 960 F.3d 1325 (11th Cir. 2020), that it is “exceedingly unlikely that Congress would have used the term ‘trustee’ … to mean ‘debtor.’”
The Debtor’s Reply
In a reply filed 24 October 2025, the Debtor acknowledged the split of authority on whether § 327 applies to chapter 13 debtors and engaged it candidly. The reply raised a separate concern arising from Idaho Supreme Court precedent — specifically Houpt v. Wells Fargo Bank Nat’l Ass’n, 370 P.3d 384 (Idaho 2016), and McCallister v. Dixon, 303 P.3d 578 (Idaho 2013) — suggesting that broad language in those cases might be read to mean the Trustee is the only party with standing to pursue claims belonging to the estate. Given that concern, the Debtor requested either an order approving the Application, or alternatively, an order denying it but expressly confirming the Debtor’s right to proceed independently. The practical urgency was underscored at the November 4 hearing, when the Debtor disclosed that proposed counsel had already filed the malpractice lawsuit due to the impending statute of limitations.
The Debtor’s amended Chapter 13 plan, confirmed on 28 November 2025, addressed the claim directly: Section 8.1 provided that the malpractice claim would remain property of the estate and any net proceeds would be paid to the estate. Section 7.1 provided for vesting of all estate property in the Debtor upon confirmation.
The Court’s Ruling
Judge Wilson denied the Application but did so in a way that resolved nearly every practical concern the Debtor had raised.
On § 327: The Court aligned with the majority of courts that have addressed the issue, concluding that § 327 and Rule 2014 authorize only a trustee to seek court approval to employ counsel — not a chapter 13 debtor. The statutory text is clear: a chapter 13 debtor does not hold the rights and powers of a trustee under § 1303, and the debtor-in-possession framework of chapter 11 (which does extend trustee powers to the debtor) has no counterpart in chapter 13. The Collier treatise confirms the conclusion: a chapter 13 debtor “does not need court approval before retaining counsel.” 3 Collier on Bankruptcy ¶ 327.01 (16th ed.).
The Court nonetheless surveyed the competing line of cases — including In re Goines, 465 B.R. 704 (Bankr. N.D. Ga. 2012), In re Jenkins, 406 B.R. 817 (Bankr. N.D. Ind. 2009), and others — which have read “trustee” in § 327(e) to encompass a chapter 13 debtor, often on the ground that the statutory scheme would otherwise be incoherent. The Court found those cases unpersuasive against the plain language of the statute.
On counsel’s obligations: Denial of the Application does not mean counsel operates free of any bankruptcy court oversight. The Court made clear that counsel for the Debtor remains governed by § 329 (requiring a statement of compensation paid or agreed to be paid, and subjecting that compensation to court review), Rule 2016 (disclosure and application for compensation), Rule 2017 (court examination of payments to counsel), and § 330(a)(4)(B) (requiring a compensation application for counsel representing a chapter 13 debtor). Counsel must also keep the Trustee apprised of litigation status, and any compromise must be brought before the Court under Rule 9019.
On Idaho standing law: The Court addressed the Debtor’s concern about Dixon, Mowrey v. Chevron Pipe Line Co., 315 P.3d 817 (Idaho 2013), and Houpt directly and carefully. Those cases arose primarily in the context of judicial estoppel — debtors who had failed to disclose claims in their bankruptcy schedules and were later barred from pursuing them in state court. The broad language in those opinions stating that “the trustee of the bankruptcy estate is the only party with standing to prosecute causes of action belonging to the estate” must be read against those specific facts and procedural postures, and against the fundamental distinction between chapter 7 liquidation cases and chapter 13 reorganization cases.
Under chapter 13, the debtor remains in possession of all property of the estate (§ 1306(b)), and upon plan confirmation, estate property vests in the debtor (§ 1327(b)). Federal courts have consistently recognized that a chapter 13 debtor has standing to prosecute prepetition claims — either concurrently with or independently of the chapter 13 trustee — precisely because chapter 13 is a reorganization proceeding in which the debtor retains control of estate assets. The Court cited DiSalvo v. DiSalvo (In re DiSalvo), 219 F.3d 1035 (9th Cir. 2000); Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513 (2d Cir. 1998); and Maritime Electric Co. v. United Jersey Bank, 959 F.2d 1194 (3d Cir. 1991), among others. Here, the claim was properly disclosed, the plan acknowledged it as estate property and directed net proceeds to the estate, and the plan had been confirmed. The Debtor is unquestionably a real party in interest to pursue the claim.
The Court closed with a footnote acknowledging the pendency of Keathley v. Buddy Ayers Construction, Inc., No. 25-6 (U.S. 2025), in which the Supreme Court has granted certiorari to address judicial estoppel in the bankruptcy context — a case in which the Fifth Circuit had held that a chapter 13 debtor who failed to disclose a personal injury claim was judicially estopped from pursuing it. That issue is distinct from the facts in Maupin, where disclosure was timely and complete.
Why This Matters
1. A chapter 13 debtor does not need § 327 approval to retain counsel for estate litigation. The majority rule, now applicable in this district, is that § 327 applies only to trustees. A chapter 13 debtor may hire counsel to pursue a prepetition claim without court approval of the engagement itself — though counsel remains subject to disclosure and compensation review requirements under §§ 329, 330(a)(4)(B), and Rules 2016 and 2017.
2. Filing the application anyway was the right call. Given the split of authority, the approaching statute of limitations, and the Idaho standing questions raised by Dixon, Mowrey, and Houpt, bringing the matter before the Court at the earliest opportunity was sound practice. The Court said so explicitly in a closing footnote, noting it “appreciates the Debtor’s counsel’s thoughtful approach in bringing the issues before the Court at an early date, possibly preventing future difficulties related to this matter.”
3. Idaho’s standing cases must be read narrowly. The broad language in Dixon, Mowrey, and Houpt — suggesting the trustee is the “only party with standing” to pursue estate claims — was developed in the context of undisclosed claims and judicial estoppel. It does not foreclose a chapter 13 debtor from pursuing a properly disclosed claim as a real party in interest, particularly after plan confirmation has vested estate property in the debtor.
4. Disclosure is the linchpin. The contrast between Maupin and the Idaho judicial estoppel cases is stark. Where disclosure is timely, complete, and incorporated into a confirmed plan directing proceeds to the estate, the debtor stands on firm ground. The debtor who conceals a claim faces estoppel; the debtor who discloses one retains the right to pursue it.
5. Trustee coordination and Rule 9019 are not optional. Even where the debtor pursues the claim without trustee involvement, the claim remains property of the estate until vesting or abandonment. Counsel must keep the Trustee informed, and any settlement requires court approval under Rule 9019. Practitioners should build these procedural requirements into their engagement from the outset.
6. Watch Keathley. The Supreme Court’s forthcoming decision in Keathley v. Buddy Ayers Construction, Inc. may affect the judicial estoppel landscape in bankruptcy cases nationally. While the facts there involve an undisclosed claim — unlike Maupin — the decision could have downstream implications for how courts analyze debtor standing to pursue estate claims, particularly in states like Idaho whose supreme court has borrowed from federal estoppel doctrine.
Full Decision: Case No. 25-40104-BRW, Doc. 114 (Bankr. D. Idaho 21 Nov. 2025)
Sagacity 