All Recycling, LLC v. Forti

• Decision Date: 08 April 2022
• Docket Number: 2022-50267,0426-21
• Court: New York City Court
• Parties: All Recycling, LLC, Plaintiff, v. Joseph Forti and NCR AUTO CORES & SECURITY, INC., Defendants.

All Recycling, LLC, Plaintiff,
v.
Joseph Forti and NCR AUTO CORES & SECURITY, INC., Defendants.

No. 2022-50267

Docket No. 0426-21

City Court of Mount Vernon

April 8, 2022

Unpublished Opinion

Patricia E. Habas, Esq.

Rogers, Habas & Eisen, PC

Attorney for Plaintiff

H. Bruce Bronson, Esq.

Bronson Law Offices, P.C.

Attorney for Defendant - NCR Auto Cores & Security, Inc.

Joseph Forti Defendant

HON. LYNDON D. WILLIAMS, CITY JUDGE

Procedural History/Facts

Plaintiff commenced this action on June 2, 2021 seeking to recover $14, 842.00 from defendants for failure to pay for goods delivered to defendants. On August 31, plaintiff filed an amended Verified Complaint seeking to suspend it's claims against the corporate defendant ("NCR") and sever the claims between the defendants. Plaintiff submitted a letter dated August 31, 2021, attached to the Verified Complaint, stating that NCR filed a Chapter 11 bankruptcy petition on October 22, 2019 (Case No.19-23869) in the Southern District of New York. Plaintiff states that NCR failed to list plaintiff as a known debtor and as such, plaintiff did not receive notice of the bankruptcy proceeding. Plaintiff's counsel, Krisly Zamor, states that NCR's counsel, H. Bruce Bronson, sent plaintiff actual written notice of the bankruptcy on June 17, 2021.

Defendant Joseph Forti has not appeared in this proceeding.

Motion to Dismiss

On November 10, 2021, the corporate defendant filed a motion seeking to dismiss the action. Defense counsel Bronson affirmed that he represented NCR in the bankruptcy action. He affirmed that the instant proceeding was commenced in violation of the automatic stay provisions of the United States Bankruptcy Code, as the filing of the bankruptcy petition triggered the automatic stay. Counsel affirms that this matter cannot be bifurcated and the action must be deemed void and dismissed in its entirety.

On December 23, 2021, plaintiff's filed an affirmation in opposition to the corporate defendant's motion seeking to dismiss the action as void. Counsel Zamor affirms that after filing the letter and amended complaint on August 31, 2021, the plaintiff has made no effort to continue pursuing its claims against the corporate defendant but solely Mr. Forti, who has failed to appear in this action. Counsel argues that this action is not subject to dismissal because plaintiff, upon learning of the bankruptcy action, ceased prosecution of the instant action by seeking to suspend its claims against the corporate defendant and to sever its claims against each defendant.

On December 29, 2021, the corporate defendant filed an affirmation in response to plaintiff's opposition. NCR argues that it is undisputed that this proceeding was commenced in violation of the automatic stay. The bankruptcy action was filed on October 22, 2019. This action was commenced on June 2, 2021 and counsel for plaintiff was notified of the bankruptcy on or before July 1, 2021. NCR argues that contrary to plaintiff's claims, the case has not and cannot be bifurcated because the claims against Joseph Forti arise solely from actions taken by him in his capacity as an agent for NCR. Thus counsel argues that NCR is a necessary party to the action and officers are protected by the automatic stay when they are essential to the debtor's reorganization. NCR further argues that the plaintiff has not ceased prosecution against NCR or stayed the case upon the notice of bankruptcy since plaintiff continues to file motions seeking judgment and collection with a caption that names the debtor/corporate defendant. Counsel argues that prior to filing a motion for a default judgment, plaintiff should have filed a motion seeking severance of the action against NCR. Counsel argues that all of the actions taken by the plaintiff must be deemed void as willful violations of the automatic stay. Finally, plaintiff argues that the effort to obtain a default judgment against the debtor's sole owner and operator would prejudice all parties to the bankruptcy action.

In a February 4, 2022 letter to the court, plaintiff argues that the automatic stay provisions do no apply to Defendant Forti, a non-bankrupt defendant. Plaintiff further argues that Mr. Forti is liable individually because he signed his name on the check, without indication of his representative capacity. Plaintiff further maintains that the corporate defendant is not a necessary party and that delay in proceeding against Mr. Forti will cause undue prejudice to plaintiff. Plaintiff argues...