In re Nicholas

• Citation: 457 B.R. 202
• Decision Date: 03 August 2011
• Docket Number: Bankruptcy No. 07–73330–CEC.,11–01026–CEC.,Adversary Nos. 07–08222–CEC
• Parties: In re Stephen NICHOLAS, Debtor.Stephen Nicholas, Plaintiff,v.Matthew E. Oren, Defendant.Matthew E. Oren, Plaintiff,v.Harvey Bernstein, et al., Defendants.
• Court: United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Eastern District of New York

457 B.R. 202

In re Stephen NICHOLAS, Debtor.Stephen Nicholas, Plaintiff,

v.Matthew E. Oren, Defendant.Matthew E. Oren, Plaintiff,

v.Harvey Bernstein, et al., Defendants.

Bankruptcy No. 07–73330–CEC.Adversary Nos. 07–08222–CEC

11–01026–CEC.

United States Bankruptcy Court, E.D. New York.

Aug. 3, 2011.

Avrum J. Rosen, Esq., Law Offices of Avrum J. Rosen, Huntington, NY, Cynthia M. Burke, Esq., Westbury, NY, for Stephen Nicholas.Matthew E. Oren, Flushing, NY, Pro Se.Thomas W. Hyland, Esq., Wilson Elser Moskowitz Edelman & Dicker LLP, New York, NY, for Rosen Defendants.Alan B. Katz, Esq., Farmingdale, NY, Pro Se.Alfred A. D'Agostino, Jr., Esq., D'Amato & Lynch, LLP, New York, NY, for Harvey Bernstein.

DECISION

CARLA E. CRAIG, Chief Judge.

Before the Court are two motions: first, a motion by Stephen Nicholas (“Nicholas” or the “Debtor”), Nicholas's attorneys, the Law Offices of Avrum J. Rosen, PLLC, Avrum J. Rosen, Fred S. Kantrow, and Allan Katz, and Nicholas's real estate broker, Harvey Bernstein (collectively, the “Defendants”) to dismiss pursuant to Rule 12(c) the complaint of Matthew Oren (“Oren”), a pro se party, in an action that was removed from state court; and second, a motion by the Debtor pursuant to § 524 and § 105 to hold Oren in contempt for violating the discharge granted to him pursuant to § 1328 upon the completion of his Chapter 13 plan by commencing and pursuing that action. ¹ Oren opposes both motions.

This Court finds that each cause of action in Oren's complaint, which seeks relief on various theories based upon events which occurred shortly before or during Nicholas's bankruptcy case, either fails to state a claim upon which relief can be granted, or must be dismissed under the doctrines of res judicata and collateral estoppel by virtue of decisions and orders previously entered in this bankruptcy case. The Court also finds that Oren's continued efforts to obtain recovery on pre-petition claims against Nicholas constitute a violation of Nicholas's discharge injunction. Accordingly, Defendants' motion to dismiss and Debtor's motion to hold Oren in contempt are granted. The cross motion and cross application filed by Oren are denied, for the reasons set forth below.

BACKGROUND

The following is a brief review of the factual and procedural history of the case.

In May, 1999, Nicholas purchased a cooperative apartment (the “Apartment”) from Oren, and to finance the purchase, executed a Secured Promissory Note (the “Note”) in favor of Oren in the amount of $44,000.00, secured by Nicholas's interest in the Apartment.

On or about July 11, 2007, Nicholas entered into a contract to sell his interest in the apartment for $100,000.

On or about July 19, 2007, Oren declared Nicholas in default on the Note, which provided for a default interest rate of 19.6%.

On August 27, 2007, Nicholas commenced this case under Chapter 13 of the Bankruptcy Code. Shortly thereafter, he commenced Adversary Proceeding No. 07–8222 against Oren (the “Adversary Proceeding”), seeking to compel Oren to turnover documentation needed by Nicholas to close the sale of the Apartment. (Compl. at ¶ 19, ECF No. 1).² Nicholas was represented in this bankruptcy case and in the Adversary Proceeding by the Law Offices of Avrum J. Rosen, PLLC and Avrum J. Rosen. Oren appeared pro se at all times in this bankruptcy case and in the Adversary Proceeding.

On September 7, 2007, the Debtor filed an amended complaint against Oren, additionally seeking, among other things, a determination of the amount of Oren's secured claim; a judgment declaring the Note void on the basis of usury; a judgment declaring that Oren is not entitled to collect compound interest on the Note; and an order fixing the maximum allowable interest rate on the Note. (Am. Compl. at pp. 13–14, ECF No. 5).

On September 27, 2007, the Honorable Dennis E. Milton, to whom this case was then assigned, issued an order authorizing the Debtor to consummate the sale of the Apartment, which subsequently occurred. (Order Directing Matthew Oren to Produce Documents and Allow for Closing at p. 2, Bankr. ECF No. 21). Nicholas then filed an amended Chapter 13 plan on October 11, 2007, which provided for the payment in full of all creditors, including Oren, from the proceeds of the sale of the Apartment. (Am. Chapter 13 Plan at p. 1, Bankr. ECF No. 24).

On January 3, 2008, Oren filed a proof of claim in this bankruptcy case in the amount of $81,471.21.

On February 15, 2008, Nicholas filed a motion for summary judgment in the Adversary Proceeding. (Mot. for Summ. J., ECF No. 15). In response, Oren filed a cross-motion seeking, among other things, 1) dismissal of the amended complaint; 2) an order awarding Oren a priority claim in Nicholas's bankruptcy case in the amount of at least $96,259.72; and 3) a hearing with respect to sanctioning Debtor's attorneys. (Cross–Mot. for Summ. J. at pp. 4–11, ECF No. 33).

On November 14, 2008, this Court entered an Order confirming Nicholas's Chapter 13 plan. (Order Confirming Plan, Bankr. ECF No. 51).

In a Decision and Order dated June 5, 2009, Judge Milton denied Oren's cross-motion except “to the limited extent it seeks an Order fixing [Oren]'s claim.” (Decision and Order on Applications for Summ. J. at p. 3, ECF No. 42). Judge Milton also denied Nicholas's motion to the extent that it sought to void the Note based on usury, but granted the motion to the extent that it sought to prevent the compounding of interest on the Note. Id. The Court instructed both parties to submit recalculations of Oren's claim to assist the Court in fixing the claim. Id. at 9.

On June 17, 2009, Oren made a request by letter for an extension of time to submit the recalculation of his claim and to appeal or file a motion for reconsideration of Judge Milton's Decision and Order dated June 5, 2009. (Req. for Extension of Time, ECF No. 43).

In a June 26, 2009 letter and Order, Judge Milton granted Oren a thirty day extension for the submission of a recalculation of his proof of claim, but denied Oren's request for an extension of time to file an appeal or to make a motion for reconsideration of the Decision and Order dated June 5, 2009. (Letter and Order Denying Requests for Time Extension, ECF No. 45).

On September 1, 2009, after receiving the parties' recalculations, Judge Milton issued a Decision and Order fixing Oren's proof of claim at $48,076.30. (Decision and Order on Appl.'s for Summ. J. Following Submission of Parties' Calculations at p. 6, ECF No. 51).

On September 11, 2009, Oren made an application to Judge Milton seeking, among other things: 1) reconsideration of his June 5, 2009 and September 1, 2009 Decisions and Orders under Rule 59, 2) relief from the June 5, 2009 and September 1, 2009 Decisions and Orders under Rule 60, and 3) an extension of time to appeal both Decisions pursuant to Bankruptcy Rule 8002. (Notice of Mot. Inter Alia Pursuant to Rules 7052, 7059, 7060 and/or 8002, ECF No. 52).

On September 14, 2009, the Chapter 13 Trustee certified that Nicholas had completed his Chapter 13 plan, and on October 6, 2009, an order was issued granting Nicholas a discharge pursuant to § 1328. (Order Discharging Debtor, Bankr. ECF No. 61).

In a March 31, 2010 Decision and Order, Judge Milton denied all of Oren's requests for reconsideration and extension of time to appeal. (Decision and Order, ECF No. 57). Judge Milton found Oren's application for reconsideration of his Decision and Order dated June 5, 2009 under Rule 59 to be untimely. Id. at 3. Judge Milton denied Oren's other applications for reconsideration on the grounds that Oren failed to allege any new evidence or change in law that would impact the Court's rulings. Id. at 4–5. Judge Milton denied Oren's application to extend his time to appeal on the grounds that the Chapter 13 Trustee already distributed to all creditors the amounts required to be paid to them under the Chapter 13 plan, the Debtor received his discharge, and Oren failed set forth a basis upon which the discharge could be set aside. Id. at 5.

On April 14, 2010, Oren filed a notice of appeal to the United States District Court for the Eastern District of New York, seeking reversal of all three of Judge Milton's decisions in Nicholas's bankruptcy case. (Notice of Appeal to District Ct., ECF No. 60). On December 8, 2010, the District Court dismissed that appeal with prejudice for Oren's failure to prosecute the appeal. (Final Order by District Ct. Judge Roslynn R. Mauskopf, ECF No. 64).

On June 5, 2010, Oren, again acting pro se, commenced an action against the Defendants in the Supreme Court of the State of New York for the County of Queens (the “State Court Action”). (Compl. at Ex. A, Removed ECF No. 1). In Oren's complaint (the “Complaint”), he alleged that the Defendants committed a variety of torts against him in an effort to induce this Court to reduce or void his proof of claim, to interfere with his business relationship with Nicholas, and to damage his reputation. Id.

Specifically, Oren asserts eight causes of action against the Defendants: 1) malicious prosecution and abuse of process; 2) attempted coercion by the Defendants through the threatening of this alleged malicious prosecution; 3) fraudulent misrepresentations made to the court regarding the calculation of Oren's claim; 4) unjust enrichment of the Defendants resulting from the allegedly fraudulent misrepresentations made to Judge Milton; 5) libel and slander; 6) fraudulent misrepresentations by the Debtor to Oren regarding an alleged “deed in lieu of foreclosure” agreement; 7) against Harvey Bernstein, tortious interference with that alleged agreement; 8) unjust enrichment of Harvey Bernstein due to this alleged interference.³ Id.

On October 18, 2010, Nicholas moved to reopen this bankruptcy case. (Mot. to Reopen Chapter 13 Case, Bankr. ECF No. 65). That motion was granted, and this case was reopened by Order entered November 3, 2010. (Order Reopening Chapter 13...