Dell v. Chain (In re Chain)
| Decision Date | 18 March 2020 |
| Docket Number | 2:17cv1592,Adversary Proceeding No. 17-02219-GLT,Bankruptcy Case No. 14-23630-GLT |
| Citation | 614 B.R. 512 |
| Parties | IN RE: John Michael CHAIN, Debtor, Ronald V. Dell and Lisa Dell, Plaintiffs, v. John Chain, Defendant. |
| Court | U.S. District Court — Western District of Pennsylvania |
Emerald N. Williams, Michael E. Megrey, Richard G. Talarico, Woomer & Talarico, LLC, Pittsburgh, PA, for Plaintiffs.
David A. Colecchia, Law Care, Greensburg, PA, for Defendant.
Plaintiffs commenced this personal injury action in Court of Common Pleas of Westmoreland County seeking redress for injuries sustained by Ronald Dell when he assertedly fell as a result of a decaying step on stairs leading to an apartment that plaintiffs occupied as tenants. The originally named defendant, John Chain, removed this action to the United States Bankruptcy Court for the Western District of Pennsylvania based on the contention that the action was "related to" his prior petition in bankruptcy court. Presently before the court is a motion to dismiss by recently joined defendant, Charles O. Zebley, Jr., who served as the bankruptcy trustee. For the reasons set forth below, the motion will be denied.
On November 30, 2017, a status conference was held before the Bankruptcy Court wherein defendant Chain inquired about adding the trustee to this action as a co-defendant. The Bankruptcy Court did not further address this inquiry and entered a Memorandum Order on December 7, 2017, referring the action to this court as an adversary proceeding.
Plaintiff then sought clarification from the Bankruptcy Court regarding the automatic stay imposed by 11 U.S.C. § 362. The Bankruptcy Court held a hearing on March 22, 2018, and thereafter entered a memorandum order lifting the stay to permit plaintiffs to pursue their action to recover "from any available proceeds of the Debtor's liability insurance policies and not from his personal assets involved in the ... bankruptcy action."
Following the Bankruptcy Court's lifting of the stay, plaintiffs filed with this court a motion to remand to state court on the premise that any stay had been lifted and without the trustee being named as a defendant, they were entitled to have the matter remanded. Defendant Chain filed a motion to join trustee Zebley as a defendant and sought to invoke the protections afforded by the " Barton doctrine." Plaintiffs' motion was denied "without prejudice to plaintiffs renewing [their] motion in the event the potential for joining the trustee as a defendant definitively has been eliminated from the case." Defendant Chain's motion was denied "without prejudice to plaintiffs seeking leave to amend their complaint to add the trustee as a defendant and/or debtor/defendant John Chain pursuing an action over against the trustee as permitted by Federal Rule of Civil Procedure 14."
On February 22, 2019, plaintiffs filed an amended complaint naming Zebley as a defendant. The instant motion to dismiss followed.
It is well-settled that in reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "[t]he applicable standard of review requires the court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). Under the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), dismissal of a complaint pursuant to Rule 12(b)(6) is proper only where the averments of the complaint plausibly fail to raise directly or inferentially the material elements necessary to obtain relief under a viable legal theory of recovery. Id. at 544, 127 S.Ct. 1955. In other words, the allegations of the complaint must be grounded in enough of a factual basis to move the claim from the realm of mere possibility to one that shows entitlement by presenting "a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ).
"A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In contrast, pleading facts that only offer " ‘labels or conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do,’ " nor will advancing only factual allegations that are " ‘merely consistent with’ a defendant's liability." Id. Similarly, tendering only "naked assertions" that are devoid of "further factual enhancement" falls short of presenting sufficient factual content to permit an inference that what has been presented is more than a mere possibility of misconduct. Id. at 1949-50 ; see also Twombly, 550 U.S. at 563 n. 8, 127 S.Ct. 1955 () (quoting Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 347, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) & Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975) ); accord Morse v. Lower Merion School Dist., 132 F.3d 902, 906 (3d Cir. 1997) () (citing Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 1357 (2d ed. 1997)) ("courts, when examining 12(b)(6) motions, have rejected ‘legal conclusions,’ ‘unsupported conclusions,’ ‘unwarranted inferences,’ ‘unwarranted deductions,’ ‘footless conclusions of law,’ or ‘sweeping legal conclusions cast in the form of factual allegations.’ ").
This is not to be understood as imposing a probability standard at the pleading stage. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (); Phillips v. County of Allegheny, 515 F.3d 224, 235 (3d Cir. 2008) (same). Instead, "[t]he Supreme Court's Twombly formulation of the pleading standard can be summed up thus: ‘stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest the required element ... [and provides] enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.’ " Phillips, 515 F.3d at 235 ; see also Wilkerson v. New Media Technology Charter School Inc., 522 F.3d 315, 321 (3d Cir. 2008) () (quoting Phillips, 515 F.3d at 235 ) (citations omitted). "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563, 127 S.Ct. 1955.
The facts read in the light most favorable to plaintiffs are as follows. Plaintiffs leased an apartment as tenants at 218 Pittsburgh Street, Scottdale, Pennsylvania. Amended Complaint at ¶¶ 6, 10. On March 25, 2016, plaintiff Ronald Dell was traversing the stairway to his apartment when his cane broke through a wooden step that had been decaying for some time. Amended Complaint at ¶¶ 11, 12. As a result, he slipped and/or otherwise lost his balance and fell down the stairway. Amended Complaint at ¶ 12. He suffered an array of injuries, including but not limited to a closed head injury
, headaches, back spasms, and bruising and pain in his right abdomen and extremities. Amended Complaint at ¶ 13.
Plaintiffs initially rented the apartment from defendant Chain. Thereafter, Chain filed a petition in bankruptcy pursuant to Chapter 11. The proceeding was converted to Chapter 7 on September 18, 2015. At that juncture, all of Chain's property was converted into a bankruptcy estate. Zebley was appointed as the Chapter 7 trustee to administer the estate.
At a meeting of creditors on October 16, 2015, the secured creditor of the building in which plaintiffs' apartment is located, Scottdale Bank, and Zebley as the Chapter 7 trustee, agreed that Zebley would manage the ongoing operations of the building until it and other property could be sold and distributed. The trustee did not abandon the interest of the debtor in this and other real estate coming into the estate and continued to manage the property in an effort to liquidate it for the benefit of the creditors. The trustee sold the property on November 10, 2016. See In re: John Michael Chain (Bkrtcy Case No. 14-23630) at Doc. Nos. 194 (), 285 (October 4, 2016, Amended Motion to Sell Property Free and Clear of Liens) & 296 (Order of November 10, 2016, granting 285 and Confirming Sale of Real Property Free and Clear of Liens and Encumbrances).
Against this backdrop, Defendant Zebley makes two arguments in support of dismissal. First, this court assertedly lacks subject matter jurisdiction over this action because the Barton doctrine prohibits a trustee from being sued for administrative acts without leave from the bankruptcy court, which plaintiffs did not obtain; and the exception under 28 U.S.C. § 959(a) does not apply. Second, Zebley contends that this action is barred by the statute of limitations under Pa. C.S. § 5524(2), as he was named in this action nearly a year after the limitations period had run.
Plaintiffs' response likewise is two-fold. First, they contend this court has jurisdiction because Zebley was carrying on business on the premises where and when the accident occurred, so the exception under § 959(a) applies and the Barton doctrine does not. Second, the statute of limitations purportedly does not prevent them from...
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