IN RE ALLEGHANY HEALTH, EDUC. AND RESEARCH FOUND.

• Decision Date: 11 March 2005
• Docket Number: No. 98-25773-MBM to 98-25777-MBM.,98-25773-MBM to 98-25777-MBM.
• Citation: 321 B.R. 776
• Parties: In re ALLEGHENY HEALTH, EDUCATION AND RESEARCH FOUNDATION, Allegheny University of the Health Sciences, Allegheny University Medical Practices, Allegheny Hospitals, Centennial and Allegheny University Hospitals-East, Debtors. William J. Scharffenberger, As Chapter 11 Trustee of Allegheny Health, Education and Research Foundation, Movant, v. Michelle Kirkland, Respondent.
• Court: U.S. Bankruptcy Court — Western District of Pennsylvania

321 B.R. 776

In re ALLEGHENY HEALTH, EDUCATION AND RESEARCH FOUNDATION, Allegheny University of the Health Sciences, Allegheny University Medical Practices, Allegheny Hospitals, Centennial and Allegheny University Hospitals-East, Debtors William J. Scharffenberger, As Chapter 11 Trustee of Allegheny Health, Education and Research Foundation, Movant, v. Michelle Kirkland, Respondent.

Nos. 98-25773-MBM to 98-25777-MBM.

United States Bankruptcy Court, W.D. Pennsylvania.

March 11, 2005.

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David I. Swan, McGuire Woods, L.L.P., Pittsburgh, PA, for trustee.

Robert T. Vance, Jr., Law Offices of Robert T. Vance, Jr., Philadelphia, PA, for Michelle Kirkland.

MEMORANDUM OPINION

M. BRUCE MCCULLOUGH, Chief Judge.

Michelle Kirkland, the instant respondent (hereafter "Kirkland"), has filed two proofs of claim in the instant bankruptcy case, each for an identical amount of $8,341,200.00. The Chapter 11 Trustee for the above-captioned debtors (hereafter "the Trustee") objects to both proofs of claim and requests that each be disallowed in its entirety. For the reasons set forth below, the Court sustains the Trustee's objection to Kirkland's proofs of claim and, therefore, disallows such proofs of claim in their entirety. On a procedural note, the Court sustains the Trustee's objection to Kirkland's proofs of claim by granting in full the Trustee's summary judgment motion dated October 12, 2004.¹ At the same time, the Court denies with prejudice the motion for partial summary judgment brought by Kirkland, which motion is dated October 8, 2004.²

STATEMENT OF FACTS

As Kirkland's various pleadings and briefs filed in the instant claims objection make clear, both of the proofs of claim that she has filed in the instant bankruptcy case pertain to the same claims, namely her claims against MCP-Hahnemann School of Medicine (hereafter "MCP"), which entity comprised part of one of the above-captioned debtors when such claims accrued. Kirkland was a student at MCP from August 1996 until July 1998, at which time she was dismissed from MCP because of her substandard academic performance. Kirkland claims that at all times while she was a student at MCP she suffered from a learning disability, namely attention deficit disorder (hereafter "ADD"). Kirkland attributes her substandard academic performance entirely to an alleged failure by MCP to accommodate her alleged learning disorder. Therefore, Kirkland contends ultimately that MCP dismissed her because MCP, in turn, failed to accommodate her alleged learning disability. Because of such alleged failure to accommodate by MCP, as well as MCP's dismissal of Kirkland caused, as Kirkland argues, by such alleged failure to accommodate, Kirkland claims that, with respect to herself, MCP (a) violated the Americans with Disabilities Act of 1990 ("ADA"), (b) violated § 504 of the Rehabilitation Act of 1973 (the "Rehabilitation Act"), and (c) breached an implied contract between MCP and Kirkland.

Prior to filing the aforesaid proofs of claim in the instant bankruptcy case, Kirkland pursued her claims against MCP via a three-count action in the United States District Court for the Eastern District of Pennsylvania. The District Court ultimately dismissed such action on the basis that (a) Kirkland's claims against MCP were pre-petition claims against one of the above-captioned debtors, and (b) such action was consequently brought in violation of the automatic stay. Such dismissal decision by the District Court was subsequently affirmed by the U.S. Court of Appeals for the Third Circuit. Such decisions by the District Court and the Third Circuit Court of Appeals necessitated Kirkland's filing of the aforesaid proofs of claim.

In Kirkland's three-count complaint that commenced the ultimately-dismissed action in the District Court (hereafter "Kirkland's District Court Complaint"), Kirkland sought as relief from MCP "compensatory and punitive damages, reinstatement at MCP, front pay, reasonable attorney's fees, costs, disbursements, and expert witness fees." Kirkland now seeks via her claims against MCP, as set forth in the aforesaid proofs of claim and her Motion to Compel Payment of Administrative Expense, $8,341,200.00 in damages, which damages are itemized as follows: (a) Lost salary as a physician—$7,970,200; (b) Maximum claim under the ADA for compensatory and punitive damages— $300,000; (c) Legal fees—$11,000; (d) Student Loans—$60,000. The Court notes that, notwithstanding the District Court and Third Circuit decisions that Kirkland's claims against MCP accrued pre-petition, Kirkland still appears to contend that her claims constitute administrative expenses. The Court also observes that, the relief request in Kirkland's District Court Complaint for reinstatement at MCP notwithstanding, Kirkland has not sought or pursued such reinstatement at any time during the administration of the instant bankruptcy case, via either her aforesaid proofs of claim or otherwise. Because Kirkland has not, in any manner, pursued such reinstatement in this Court to date, and since the claims bar date in the instant bankruptcy case has long since passed, and given that Kirkland may not now amend her proofs of claim as they presently exist so as to seek a remedy for which notice cannot conceivably be viewed as having thus far been given, the Court not only concludes that she no longer wishes to seek such reinstatement but also holds that she is legally barred from henceforth pursuing the same.

Upon motion by the Trustee, and so as to aid the Trustee in his effort to confirm a Chapter 11 plan in the instant bankruptcy case, the Court, by an order dated December 11, 2000, directed the Trustee to establish a claims reserve regarding Kirkland's claims "in the amount of $1 Million on a general unsecured basis, or the amount of $50,000," which $50,000 figure was arrived at by multiplying $1 million by .05, or the tentative pro rata distribution rate as of December 11, 2000.

Prior to filing his summary judgment motion dated October 12, 2004 (hereafter "the Trustee's Present Summary Judgment Motion"), the Trustee filed another motion for partial summary judgment whereby he seeks to limit the scope of damages which Kirkland could recover via her claims, which motion has thus far been tabled by the Court (hereafter "the Damages Summary Judgment Motion"). Because the Court presently grants the Trustee's Present Summary Judgment Motion wherein full summary judgment is sought, the Damages Summary Judgment Motion is thereby rendered moot. However, because the Court finds that several items contained within the Damages Summary Judgment Motion and Kirkland's brief in opposition thereto (brief dated May 29, 2004) are relevant to the Court's disposition of the Trustee's Present Summary Judgment Motion, the Court shall make mention of them. In particular, the Trustee, within the Damages Summary Judgment Motion, takes the position that (a) Kirkland, to the extent that she can recover monetarily under the ADA, is limited to a statutory cap of $300,000 for compensatory and punitive damages, (b) punitive damages are not recoverable under the Rehabilitation Act, and (c) Kirkland may not recover front pay damages as she was never an employee of MCP. Kirkland stipulates, in response to the Damages Summary Judgment Motion, that (a) monetary damages under the ADA are statutorily capped at $300,000, (b) she may not recover punitive damages under the Rehabilitation Act, (c) she does not pursue punitive damages with respect to her breach of contract claim, (d) she was never an employee of MCP, and (e) she cannot obtain front pay damages since she was never an employee of MCP. See May 29, 2004 Kirkland Opp'n Br., at p. 4.³

Kirkland, as set forth above, claims that she suffered from ADD, a learning disability, at all times while she was a student at MCP. Kirkland appears to have been evaluated on three separate occasions by psychologists to determine whether, and to what extent, she suffered from either a learning disability or, in particular, ADD. The first such evaluation was conducted by the Psychological Clinic at Rutgers University (hereafter "the Rutgers Clinic") in May and June of 1996. The Rutgers Clinic, in a report dated June 29, 1996, regarding their evaluation of Kirkland (hereafter "the Rutgers Report"), concluded, inter alia, that (a) "although ... Kirkland has some indicators that are consistent with Attention Deficit Disorder, her symptoms are not severe enough to warrant an ADD diagnosis at this time," see Tr. Mot. Summ. J. Ex. F & Kirkland Mot. Part. Summ. J. Ex. C (Rutgers Report, last page), and (b) "no learning disability was found," see Id. (Rutgers Report, last page). Furthermore, the Rutgers Report indicates that Kirkland's various learning-related abilities graded out at between low average and superior when compared to other adults her age, see Id. (Rutgers Report, 2nd and 3rd pages); significantly, the Rutgers Report does not even indicate that, when comparing Kirkland to other college level adults, her various learningrelated abilities graded out at below average, see Id. Finally, the Rutgers Clinic, although it concluded that Kirkland might be challenged by, or have difficulty with, high level academic work such as medical school, did not expressly find that anything operated to "substantially limit" her ability to learn when she was compared to either the general population or some segment thereof. See Id.⁴

The second such evaluation of Kirkland was performed by PsychoEducational Associates in July 1996. PsychoEducational Associates, in an undated report regarding their July 1996 evaluation of Kirkland (hereafter "the 1996 PsychoEducational Report"), found, inter alia, that evidence exists that "suggests" that Kirkland has "attention problems" a...