In re Lickman, Bankruptcy No. 98-02632-6C7.
| Decision Date | 25 July 2003 |
| Docket Number | Adversary No. 01-170.,Bankruptcy No. 98-02632-6C7. |
| Citation | 297 B.R. 162 |
| Parties | In re Paula LICKMAN, Debtor. Marie E. Henkel, Trustee, Plaintiff, v. Paula Lickman et al., Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
Gerald J. D'Ambrosio, Delray Beach, FL, for debtor.
This adversary proceeding presents significant issues involving a debtor and her confederates' repeated efforts to thwart the trustee's administration of the debtor's bankruptcy estate. They took their actions in derogation of settled principles of law to the substantial harm and detriment of the bankruptcy estate. They have severely prejudiced all creditors of this estate. The trustee seeks injunctive relief and sanctions. The court concludes that injunctive relief and sanctions are appropriate.
Introduction.
This adversary proceeding is the latest installment in a saga that has been ongoing for more than four years and that has played out in the Pennsylvania state courts, the federal district courts in the Eastern District of Pennsylvania and the Middle District of Florida, and the bankruptcy court in the Middle District of Florida. This court has entered several decisions in this bankruptcy case and assumes familiarity with those decisions.1
Virtually all of the litigation in this bankruptcy case has, at its core, involved a dispute as to who should have ownership and control over one asset: a 15 percent interest in a probate estate and putative claims against the executrix of that probate estate, Marcy Shain ("Shain" or "executrix"), pending in the Pennsylvania probate court ("probate asset").
The debtor and her confederates — a friend, Robert Dizak or Robert Daniels ("Daniels")2, and her attorneys, Gerald J. D'Ambrosio ("D'Ambrosio"), and James F. Wiley, III ("Wiley") — have aggressively pursued the debtor's claim of entitlement to the probate asset by making telephone calls, writing letters, filing disciplinary complaints with The Florida Bar, and placing newspaper advertisements in an effort to pressure the trustee and her counsel to abandon the probate asset; by taking an adverse position in the bankruptcy case and its related proceedings in an effort to hinder and delay the trustee's administration of the probate asset; by making and prosecuting collateral claims for legal relief in the Pennsylvania state and federal courts against the trustee and her counsel on account of the trustee's administration of the probate asset; and by continuing all of these efforts despite final judicial determinations that the debtor's legal positions are meritless. The plaintiff contends that, in taking these actions, the defendants have violated the automatic stay, this court's order granting the trustee's motions for sanctions entered on October 18, 1999, 28 U.S.C. § 959, and the Barton doctrine. The plaintiff seeks injunctive relief and monetary damages in the amount of $181,798.69, plus costs.
The court conducted the trial of this adversary proceeding over a period of three days. At trial, the court heard testimony from six witnesses and received into evidence nearly 200 exhibits. After considering all of the testimony, particularly the demeanor and credibility of the witnesses, the exhibits admitted at trial, pleadings and stipulations filed by the parties, other facts as established as a matter of record in the court file, and written arguments of the parties, including the authorities cited by the parties, the court determines the facts and issues as more specifically delineated below as required by F.R.B.P. 7052.
Chronology of Events.
The record is voluminous. In addition, the record has been somewhat muddied by the abandon with which the defendants have cited in their papers alleged "facts" that are not supported by the record. The court has therefore prepared a chronology that sets out all of the events that have occurred in the debtor's bankruptcy case and elsewhere as established by the record.
The chronology is attached to this decision as Appendix I. It is an integral part of this decision. To the extent there is testimony or evidence in the record that is contrary to what is contained in the appendix, the court does not credit that testimony or evidence.
Phase I: March 1998 — April 2001.
On March 27, 1998, the debtor filed a case under Chapter 7 of the Bankruptcy Code (App. I No. 1).3 The trustee determined that there were no assets to be administered and the case was closed shortly after the court entered a discharge of the debtor's debts (App. I Nos. 6 and 7). The debtor discharged approximately $38,000 in unsecured debt (App. I No. 1).
Unknown to the trustee, the debtor's aunt died during the 180-day period following the debtor's Chapter 7 bankruptcy filing (App. I No. 3). The aunt's will left the debtor a 15 percent interest in her estate (App. I No. 4). The debtor and her brother, Stephen Lickman ("the Lickmans"), were immediately at odds with their cousin, Shain, the major beneficiary and executrix of the probate estate, with respect to Shain's financial dealings on behalf of the decedent before and during probate (App. I No. 10). The Lickmans commenced litigation in the Pennsylvania probate court against the executrix alleging malfeasance (App. I No. 13).
Daniels and the debtor had a romantic relationship and were then living together (App. I No. 11). Daniels and the debtor were both legally sophisticated. Daniels had published a legal periodical for many years, and the debtor had worked as a paralegal (App. I Nos. 1 and 21). Daniels actively participated in the debtor's litigation against the executrix and paid some of the debtor's legal fees (App. I Nos. 14, 15, and 22).
Neither the debtor nor the executrix notified the Chapter 7 trustee of the debtor's interest in the probate estate (App. I Nos. 12 and 17). Counsel for the executrix, Larry S. Segal ("Segal"), communicated to the debtor and her counsel the necessity of notifying the trustee of the probate asset (App. I No. 17). When the debtor had failed to notify the trustee by the time to file the executrix' preliminary accounting with the probate court, Segal notified the trustee of the debtor's interest in the probate estate (App. I No. 25).
When it became apparent that the trustee might reopen the debtor's bankruptcy case to administer the probate asset, Daniels sought and obtained counsel to represent the debtor's interests in the bankruptcy court (App. I Nos. 20, 23, and 27). Daniels selected D'Ambrosio, a bankruptcy attorney whom Daniels had known for more than 20 years and with whom he shared office space (App. I No. 21). Daniels asked D'Ambrosio to assist him in writing letters to the trustee to dissuade her from administering the probate asset (App. I No. 20). Daniels was not himself admitted to The Florida Bar. Indeed, Daniels allegedly was convicted in New York of a felony for the unauthorized practice of law and is currently seeking admission to The Florida Bar (App. I No. 20).
On August 16, 1999, the court entered an order reopening the debtor's bankruptcy case to permit the Chapter 7 trustee to administer the probate asset for the benefit of the debtor's unsecured creditors (App. I No. 32). Shortly thereafter, the court approved the trustee's employment of Lynnea Concannon ("L. Concannon") as trustee's counsel (App. I No. 38). Lynnea Concannon was assisted by her associate, Sean Concannon ("S. Concannon") (App. 1 No. 38). The trustee also employed special counsel, William O'Connell ("O'Connell"), to represent the estate's interests in the Pennsylvania probate action (App. I Nos. 60 and 113).
Had the debtor cooperated with the trustee in administering the probate asset at this point, the bankruptcy estate would have incurred attorney's fees in the range of $900 to $2,000 (App. I No. 32). Even after the payment of all administrative expenses, the trustee would have been able to make a substantial distribution to the debtor's unsecured creditors. The debtor, however, did not cooperate.
Instead, Daniels, the debtor, and D'Ambrosio waged an aggressive campaign to dissuade the trustee and her counsel from administering the probate asset. They initiated a barrage of telephonic and written communications to the trustee and her counsel (App. I Nos. 29, 30, 31, 36, 40, 41, 42, 43, 52, 53, 56, 57, 58, 64, 67, 88, 89, and 94). In these communications, Daniels, the debtor, and D'Ambrosio took the position that it would be burdensome to the estate to administer the probate asset because the debtor's claims against the executrix were speculative and would be difficult to collect from the executrix who resided in Israel (App. I Nos. 29, 30, 31, 36, 40, 41, 42, and 43). Daniels, the debtor, and D'Ambrosio urged the trustee and her counsel to abandon the probate asset. They also made direct or implicit threats of adverse consequences to the trustee and her counsel if the trustee did not cease administering the probate asset (App. I Nos. 29, 30, 36, 40, 42, 43, 52, 53, 58, 64, 88, 89, and 94).
During this time, D'Ambrosio fraudulently represented to the trustee and her counsel that Daniels was formally associated with his office as an assistant or associate attorney authorized to speak on behalf of the debtor (App. I Nos. 45 and 107). Daniels also fraudulently held himself out to the trustee and her counsel as D'Ambrosio's employee or associate authorized to speak on behalf of the debtor (App. I Nos. 41, 75, 103, and 104).4 Daniels drafted and typed many of the letters that D'Ambrosio sent to the trustee and her counsel in addition to making telephone calls (App. I No. 24).
As a consequence of Daniels', the debtor's, and D'Ambrosio's early pressure tactics to force abandonment of the probate...
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