Glassman v. Feldman (In re Feldman)
Decision Date | 26 February 2019 |
Docket Number | Case No. 17-40152-cec,Adv. Pro. No. 17-01050-cec |
Citation | 597 B.R. 448 |
Parties | IN RE: Robert FELDMAN, Debtor. Donald Glassman, Plaintiff, v. Robert Feldman, Defendant. |
Court | U.S. Bankruptcy Court — Eastern District of New York |
Steven A. Soulios, Esq., Ruta, Suoilos, & Stratis LLP, 370 Lexington Avenue, 24th Floor, New York, NY 10017, Counsel for the Plaintiff
Steven D. Hamburg, 2736 Independence Avenue, Suite 1H, Bronx, NY 10463, Counsel for the Debtor/Defendant
DECISION DISMISSING CASE WITH PREJUDICE AND GRANTING IN PART PLAINTIFF'S MOTION FOR SANCTIONS
This matter comes before the Court on the motion of Donald Glassman ("Glassman"), a creditor of the debtor, Robert Feldman (the "Debtor"), to dismiss this Chapter 13 case with prejudice, pursuant to 11 U.S.C. § 1307, and to sanction the Debtor pursuant to 11 U.S.C § 105, 28 U.S.C. § 1927, and Federal Rule of Bankruptcy Procedure 7037.
The Debtor is a lawyer, and Glassman, his former client, commenced an action in state court against him asserting various claims, including legal malpractice and defamation. The automatic stay has been modified to permit this action to proceed to judgment, but not to execution. (Lift Stay Order, ECF No. 78).1
Glassman seeks an order dismissing the bankruptcy with prejudice because, Glassman asserts, the Debtor filed the bankruptcy petition, and prosecuted this case, in bad faith. Glassman also seeks sanctions based upon the Debtor's failure to comply with two discovery orders entered in this case. For the following reasons, the motion to dismiss is granted with prejudice, and the motion for sanctions is granted in part.2
This Court has jurisdiction of this core proceeding under 28 U.S.C. § 157(b)(2)(A) and § 1334(b), and the Eastern District of New York standing order of reference dated August 28, 1986, as amended by Order dated December 5, 2012.
This Chapter 13 case was commenced on January 13, 2017. On March 9, 2017, Glassman, acting pro se, filed a "notice of motion to dismiss the petition for cause pursuant to 11 U.S.C. § 1307(c)." (See Mot. to Dismiss, ECF No. 20.) There, Glassman alleged that "the Petition was not filed to obtain protection from the Debtor's creditors, but rather for the sole, improper purpose of securing an automatic stay of [Glassman's] civil actions for legal malpractice, defamation, and several other causes of action against the Debtor ... which had been scheduled to go to trial on January 18, 2017." (Mot. to Dismiss 1, ECF No. 20).
On February 18, 2017, Glassman filed a claim in this bankruptcy case based upon the claims asserted in the state court action, which was amended on April 14, 2017 to seek damages of $ 31,030,000. (See Claim No. 2-2.) On April 17, 2017, Glassman, pro se, commenced an adversary proceeding against the Debtor, seeking a determination that his claim is nondischargeable under 11 U.S.C. § 523(a)(2) and (4). (Compl. 1, ECF No. 32.) Glassman then retained an attorney, who filed a noticeof appearance on May 25, 2017, and who appeared on behalf of Glassman in this case and in the adversary proceeding thereafter. (Notice of Appearance, ECF No. 39.) Glassman filed an application to conduct a Rule 2004 examination of the Debtor, which was granted on July 14, 2017 (the "2004 Order"). (2004 Order, ECF No. 44.) By Stipulation and Order entered on August 11, 2017, the parties were to complete the Rule 2004 examination on or before September 28, 2017. (Sched. Order, ECF No. 47.)
On October 10, 2017, Glassman informed the Court that the Debtor failed to comply with the 2004 Order. (See Ltr., ECF No. 50.) On November 6, 2017, after holding a conference on the matter, the Court issued an order providing as follows:
(Order, Adv. Pro. No. 17-01050-CEC, ECF No. 8 (the "November 6 Order").)
On January 27, 2018, Glassman filed a letter on the docket captioned "Joint Request to modify scheduling order and adjourn trial to allow for completion of di[s]covery." (Ltr., ECF No. 53 (the "Jan. 27, 2018 Letter").) The Jan. 27, 2018 Letter detailed the Debtor's failure to comply with the November 6 Order, and requested that the Court modify the November 6 Order to allow the deposition to be completed on or before February 9, 2018. (Jan. 27, 2018 Ltr., ECF No. 53.) The Court adjourned the trial to May 30, 2018, and directed the parties file a joint pre-trial order by May 23, 2018. (Order Adj. Trial, ECF No. 56.) Then, on May 9, 2018, Glassman, alleging that the Debtor still refused to comply with the 2004 Order, the Subpoena for Rule 2004 Examination dated September 26, 2017 (the "Subpoena"), and the November 6 Order, filed a motion to sanction the Debtor (the "Sanctions Motion"), seeking dismissal of this bankruptcy case with prejudice as well as monetary sanctions. (Sanctions Mot., ECF No. 60.) On May 22, 2018, Glassman requested a stay of trial pending resolution of the Sanctions Motion, which the Court denied. (See Order Denying Stay, ECF No. 63.)
On May 23, 2018, the date joint pre-trial order was due, the parties requested, and the Court granted, an extension of time for the parties to submit a joint pre-trial order until May 25, 2018. (Endorsed Order, Adv. Pro. No. 17-01050-CEC, ECF No. 15.) On May 25, 2018, the parties again requested, and the Court granted, an extension of time for the parties to submit a joint pre-trial order until May 29, 2018 at 5:00 p.m. (Endorsed Order, ECF No. 68.) The parties did not submit a pre-trial order. The May 30, 2018 trial proceeded nevertheless, focusing on whether the Court should grant Glassman's motion to dismiss this bankruptcy case with prejudice and whether the Court should sanction the Debtor. (See Trial Tr. (hereinafter "Tr."), ECF No. 117.)3
(Tr. 20:22–21:4.) The Debtor made no effort to conceal his contempt for Glassman and Glassman's attorney. Tr. 30:1–8 () .) ,
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