In re Worldwide Collection Services of Nevada
| Decision Date | 03 December 1992 |
| Docket Number | Adv. No. 92-656. |
| Parties | In re WORLDWIDE COLLECTION SERVICES OF NEVADA, INC., Debtor. WORLDWIDE COLLECTION SERVICES OF NEVADA, INC., Plaintiff, v. Fred AARON, et al., Defendants. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida |
COPYRIGHT MATERIAL OMITTED
Daniel and Barbara Sasso, c/o M. Daniel Sasso, Cape Coral, FL.
Gregory and Susan Grier, c/o William M. Powell, P.A., Cape Coral, FL.
Don and Saundra Wolsfer, c/o William P. Meehan, Ft. Myers, FL.
Randolph and Betty Berger, c/o Alfred E. Johnson, Ft. Myers, FL.
James A. White, c/o E. Mitchell Whaley, Ft. Myers, FL.
Lucy Mae Williams, c/o Karen Williams North, Ft. Myers, FL.
Leroy and Barbara Dewey, c/o Michael F. Kayusa, Ft. Myers, FL.
Terry and Goldie Goble, c/o Simon M. Harrison, Lehigh Acres, FL.
Florence and Helen Russell, c/o Michael C. Tice, Ft. Myers, FL.
Janet Davenport, c/o Robert L. Donald, Ft. Myers, FL.
William and Carol Dukes, c/o William G. Belcher, II, Ft. Myers, FL.
Richard and Christine Middleton, c/o Frank J. Aloia, Cape Coral, FL.
Henry and Lois Knight, c/o Daniel E. Sinclair, Ft. Myers, FL.
Thomas and Julia Moore, c/o Doris A. Bunnell, Bradenton, FL.
Richard and Susan Bessire, c/o Robert J. Norton, Punta Gorda, FL.
Elizabeth and John Bevins, c/o Roger L. Waltemyer, Ft. Myers, FL.
Richard and Kathy Breed, c/o David K. Oaks, Punta Gorda, FL.
Robert L. Roth, P.A., c/o Allison R. Day, Miami, FL.
Laura and George Brightman, Theodore L. Tripp, Jr., Ft. Myers, FL.
Isiah and Margaret Epps, Thomas M. Dryden, Ft. Myers, FL.
Colin and Stacie McTigue, David K. Oaks, Punta Gorda, FL.
Ralph and Shirley Oestman, c/o Jerry L. Brewer, Orlando, FL.
Kenneth and Sally Burdette, c/o Robert G. Hines, Naples, FL.
Charles and Diana Smith, c/o John S. Dzurak, Punta Gorda, FL.
Russell V. Trent, c/o Bill B. Berke, Cape Coral, FL.
Elijah and Ethel Manning, c/o Philip R. Miaiorca, Ft. Myers, FL.
Pierce J. Guard, Jr., Lakeland, FL.
Joseph and Karen Stoernell, c/o Allan W. Workman, Ft. Myers, FL.
Walter and Danah Cooper, c/o John A. Noland, Ft. Myers, FL.
James and Elizabeth Langston, c/o Thomas H. Faulk, Jr., Ft. Myers, FL.
John H. Dalton, c/o William A. Keyes, Jr., Ft. Myers, FL.
Henry and Genola Ford, c/o Richard A. Collman, Sanibel, FL.
Rita M. Farry, P.C., Reno, NV.
ORDER ON EMERGENCY MOTION OF DEFENSE MANAGEMENT COMMITTEE TO DISMISS ADVERSARY COMPLAINT AND/OR TO ABSTAIN ACTION PENDING EVIDENTIARY HEARING AND FOR SANCTIONS AGAINST RITA FARRY, P.A.
THIS is a yet-to-be confirmed Chapter 11 case, originally filed in Reno, Nevada, and now pending in the Southern District of Florida. The matter under consideration is a two-Count Complaint filed by Worldwide Collection Services, Inc. (Debtor) seeking a determination of the extent and validity of liens, and a money judgment claimed to be owed by the Defendants. The Complaint named approximately 460 individual defendants who apparently either bought or leased a solar water heater from the predecessor-in-interest of the Debtor. The facts as established at the duly noticed hearing and as they appear from the record are as follows.
The Debtor is the holder by assignment of claims arising from contracts for the purchase or lease of solar water heating systems entered into by its predecessor-in-interest with homeowners located in Florida. Under these contracts the homeowners were obligated to make monthly payments and also granted a security interest in the solar water heaters to the Debtor's predecessor-in-interest.
In late 1991, the Debtor initiated approximately 4,000 lawsuits in Central and Southern Florida to collect the unpaid balances on these contracts. Originally, each lawsuit was filed in the separate Circuit Courts, and named an individual defendant. The lawsuits pending in the 11th Judicial Circuit for Dade County were consolidated, styled Worldwide Collection Services of Nevada, Inc., Newman Johnson, v. Joseph Exantus, et al., Case No. 91-1185 CA. On August 10, 1992, the Circuit Court in Dade County granted a petition to certify the suit as a class action. Two classes of defendants were established, one class representing homeowners who purchased the solar water systems, and a second representing homeowners who leased the solar water systems. The Defense Management Committee (DMC) was appointed to act as the representative of these classes, through counsel, which also purports to represent the defendants in this adversary proceeding as members of the class. The DMC formerly filed a 23 Count Counterclaim on behalf of the two certified classes against the Debtor seeking (1) rescission of the contracts; damages for breach of contract; (2) damages for breach of warranty; (3) failure of consideration; (4) damages based on deceptive and unfair trade practice pursuant to Chapter 501 of the Florida Statutes; and (5) alleged violations of Federal Truth in Lending 15 U.S.C. § 1601 et seq., and Florida Consumer Collection Practices Act F.S. § 559 et seq. In addition, the DMC successfully argued a Motion to Dismiss the Complaint filed by the Debtor, based on the contention that the Debtor failed to state a cause of action, and the Complaint filed by the Debtor was dismissed by the Circuit Court. This left for resolution by the Circuit Court in Dade County only the Counterclaim filed by DMC on behalf of the classes against the Debtor.
On April 7, 1992, the Debtor sought protection of the Bankruptcy Court, Nevada District, Reno Division. Although the automatic stay halted the progress of the litigation in Dade County, i.e., the Counterclaim filed against the Debtor, a Motion for Relief from the Stay was granted by the Bankruptcy Court in Nevada for the limited purpose of litigating the Counterclaim. The Debtor subsequently removed the Counterclaim to the Bankruptcy Court for the Southern District of Florida but the removed proceeding was promptly remanded by the Bankruptcy Court to the Circuit Court for Dade County.
On August 17, 1992, the Debtor initiated this adversary proceeding, along with five others, all of which are still pending in the Middle District of Florida. Each adversary named approximately 460 defendants, none of the defendants appear to have anything in common except that they either purchased or leased a solar water heater system from the Debtor's predecessor-in-interest.
Based upon the foregoing, the DMC contends that the Complaint filed by the Debtor should be dismissed because the Complaint was filed in bad faith in an attempt by the Debtor to avoid unfavorable rulings against it in the State Court; or, in the alternative, that this Court should abstain from this proceeding, based upon comity and the interest of justice, or must abstain based upon the assertion that this proceeding is identical to that before the Circuit Court in Dade County. Finally, DMC requests this Court impose sanctions on counsel for the Debtor, Rita Farry, for unethical behavior and violations of the local rules of the Middle District of Florida.
It should be noted at the outset, that DMC's standing to argue the Motion under consideration is a threshold issue. This is so because if the DMC has no standing the Motion under consideration must be denied outright. DMC claims to be the legal representative of the classes certified by the Circuit Court in Dade County. However, the members of these classes are not defendants named in this adversary proceeding. The Circuit Court in Dade County stated that its jurisdiction is limited to the claims asserted in the Counterclaim by residents of Dade and Broward Counties. This Court is satisfied that the Defendants named in this adversary proceeding are not members of the two classes. From this it follows that DMC is not the legal representative of these Defendants, and it has no standing to seek dismissal of the Complaint, nor to seek abstention or Sanctions against Debtor's counsel on behalf of these Defendants....
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