Modikhan v. Aronow (In re Modikhan)
| Decision Date | 18 February 2022 |
| Docket Number | Case No.: 19-46591-jmm,Adv. Pro. No: 21-01009-jmm |
| Citation | 639 B.R. 792 |
| Parties | IN RE: Ashmeen MODIKHAN, Debtor. Ashmeen Modikhan, Plaintiff, v. Darrow Aronow, Esq., Hanin R. Shadood, Courtney R. Williams, Esq., Fay Servicing LLC, Rushmore Loan Management Services, Inc., Marianne DeRosa, The United States of America, Does 1-100 Inclusive Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of New York |
Ashmeen Modikhan, 94-22 Magnolia Court, Unit 1B, Ozone Park, NY 11753, Pro Se Debtor
Courtney R. Williams, Gross Polowy, LLC, 1775 Wehrle Drive, Ste 100, Williamsville, NY 14221, Pro Se Defendant
Marianne DeRosa, Office of the Chapter 13 Trustee, 100 Jericho Quadrangle, Ste 127, Jericho, NY 11753, Pro Se Defendant
Darren Aronow, Aronow Law Firm P.C., 7600 Jericho Turnpike, Ste 115, Woodbury, NY 11797, Pro Se Defendant
Steven Amshen, Petroff Amshen, LLP, 1795 Coney Island Ave, 3rd Floor, Brooklyn, NY 11230, Counsel for Hanin Shadood
Andrea M Roberts, Blank Rome LLP, 1271 Avenue of Americas, New York, NY 10174, Counsel for Fay Servicing, LLC
Krista M Preuss, Krista M. Preuss, Chapter 13 Trustee, 100 Jericho Quadrangle, Ste 127, Jericho, NY 11753, Pro Se Defendant
Jonathan M. Robbin, J. Robbin Law PLLC, 200 Business Park Drive, Ste 103, Armonk, NY 10504, Counsel for Rushmore Loan Management Services, Inc.
In this Adversary Proceeding, Plaintiff is suing the servicers for the mortgages on the Plaintiff's two real properties, their counsel, the chapter 13 trustee, and the Plaintiff's former bankruptcy attorneys. Plaintiff alleges the Defendants are perpetrating a mortgage modification scheme and asserts claims for fraud, wire fraud, negligent misrepresentation, and replevin. Plaintiff also asserts breach of fiduciary duty claims against the chapter 13 trustee and legal malpractice claims against her attorneys. Plaintiff seeks injunctive relief as well as money damages. Each Defendant has moved to dismiss the plaintiff's claims.
For the reasons set forth below, the motions to dismiss filed by the loan servicers, their counsel, the chapter 13 trustee, and Hanin R. Shadood (one of Plaintiff's former attorneys) are granted. The motion to dismiss filed by Darren Aronow (one of Plaintiff's former attorneys) is granted in part. All Plaintiff's claims against Darren Aronow are dismissed except for Plaintiff's claim for legal malpractice.
The Court has subject matter jurisdiction over this adversary proceeding and these contested matters under 28 U.S.C. § 1334(b), 28 U.S.C. § 157(a), and the Standing Order of Reference entered by the United States District Court for the Eastern District of New York, dated August 28, 1986, as amended by Order dated December 5, 2012.
On June 28, 2012, the Plaintiff commenced a case under chapter 7 of the Bankruptcy Code (the "First Bankruptcy Case") by filing a voluntary petition for relief with the Clerk of this Court. (In re Modikhan , Case No. 12-44750 (Bankr. E.D.N.Y)). The Plaintiff was represented by counsel in the First Bankruptcy Case. (Bankruptcy 12-44750, ECF No. 1.) On October 10, 2012, the Plaintiff was granted a discharge. (Bankruptcy 12-44750, ECF No. 12.)
On July 9, 2019, the Plaintiff, proceeding pro se , commenced a second chapter 7 case by filing a petition for relief with the Clerk of this Court. (In re Modikhan , Case No. 19-44172 (Bankr. E.D.N.Y)). The Plaintiff did not file schedules of assets and liabilities, a statement of financial affairs or other documents required under the Bankruptcy Code. (Bankruptcy 19-44172, ECF No. 16.) As a result, on September 11, 2019, the Court entered an order directing the Clerk's office to dismiss the case. (Bankruptcy 19-44172, ECF No. 18.) That bankruptcy case was closed on September 27, 2019. (Bankruptcy 19-44172, ECF No. 21.)
On October 31, 2019, Plaintiff, proceeding pro se , commenced a third bankruptcy case by filing a voluntary petition for relief under chapter 13 of the Bankruptcy Code. (In re Modikhan , Case No. 19-46591 (Bankr. E.D.N.Y)). The case was assigned to the Honorable Elizabeth S. Stong, United States Bankruptcy Judge. Marianne DeRosa (the "Chapter 13 Trustee") was appointed as the chapter 13 trustee. January 9, 2020 was set as the deadline for creditors to file proofs of claim. (Bankruptcy 19-46591, ECF No. 7.)
On November 21, 2019, Aronow Law Firm P.C. ("Law PC") filed a notice of appearance as Plaintiff's counsel. (Bankruptcy 19-46591, ECF No. 12.) Defendant Darren Aronow ("Aronow") is a partner or member of Law PC and Defendant Hanin R. Shadood ("Shadood") was an associate attorney with Law PC. (Id. )
On that same date, Law PC filed the Plaintiff's bankruptcy schedules and statement of financial affairs and other documents required to be filed in a chapter 13 bankruptcy case. (Bankruptcy 19-46591, ECF Nos. 13, 14, 15, 16, 17.) Plaintiff's schedules listed Fay Servicing LLC ("Fay") as holding a $381,916.48 claim secured by a mortgage on 87-10 149th Avenue, Apt. 5N, Howard Beach, New York (the "Investment Property") and Rushmore Loan Management Services ("Rushmore") as holding a $731,042.20 claim secured by a mortgage on 94-22 Magnolia Court, Unit 1B, Ozone Park, New York (the "Residential Property"). (Bankruptcy 19-46591, Sched. D, ECF No. 13.) Also, on November 21, 2019, Law PC filed a request for Plaintiff to enter the court's loss mitigation program respecting the Residential Property mortgage. (Bankruptcy 19-46591, ECF Nos. 19, 21, 18.) Additionally, on that date, Law PC filed its Disclosure of Compensation of Attorney for Debtor(s). (Bankruptcy 19-46591, ECF No. 16.) The disclosure represents that Law PC agreed to accept $5,000 for certain services, including analysis and bankruptcy advice, preparation of the bankruptcy petition and schedules, appearances at the meeting of creditors and confirmation hearing, and negotiations with secured creditors. (Id . at ¶ 5.) The disclosure acknowledges receipt of a $2,065 retainer. (Id . at ¶ 1.)
On November 27, 2019, Law PC filed the Plaintiff's proposed chapter 13 plan. (Bankruptcy 19-46591, ECF No. 32.) Section 3.3 addresses treatment of the debt secured by the Residential Property mortgage and states:
All arrears, including all past due payments, late charges, escrow deficiency, legal fees and other expenses due to the mortgagee totaling $332,911.27, may be capitalized pursuant to a loan modification. The new principal balance, including capitalized arrears will be $718,468.65, and will be paid at 3% interest amortized over 40 years with an estimated monthly payment of $3,216.94 including interest and escrow of $644.93. The estimated monthly payment shall be paid directly to the trustee while loss mitigation is pending and until such time as the debtor(s) has commenced payment under a trial loan modification. Contemporaneous with the commencement of a trial loan modification, the debtor(s) will amend the Chapter 13 Plan and Schedule J to reflect the terms of the trial agreement, including the direct payment to the secured creditor going forward by the debtor(s).
(Id . (emphasis added.)) Section 9.1 addresses treatment of the debt secured by the Investment Property mortgage and states:
All arrears, including all past due payments, late charges, escrow deficiency, legal fees and other expenses due to the mortgagee totaling $181,774.76, may be capitalized pursuant to a loan modification. The new principal balance, including capitalized arrears will be $356,916.48, and will be paid at 3% interest amortized over 40 years with an estimated monthly payment of $1,485.77 including interest and escrow of $208.06. The estimated monthly payment shall be paid directly to the trustee while loss mitigation is pending and until such time as the debtor(s) has commenced payment under a trial loan modification. Contemporaneous with the commencement of a trial loan modification, the debtor(s) will amend the Chapter 13 Plan and Schedule J to reflect the terms of the trial agreement, including the direct payment to the secured creditor going forward by the debtor(s) .
(Id . (emphasis added.)) The chapter 13 plan provides for the $2,935 owed to Law PC for legal fees to be treated as an administrative expense to be paid through the chapter 13 plan. (Bankruptcy 19-46591, ECF No. 32 at 4.3). The chapter 13 plan provides for general unsecured claims to be paid in full. (Id . at Part 5.) The plan provides for 60 monthly payments of $4,800.00. (Id . at Part 2.)
Four months later, in February 2020, Shadood left Law PC to work for the Chapter 13 Trustee. (Bankruptcy 19-46591, Feb. 2, 2020, Hr'g Tr. 12: 7-9, ECF No. 142.)
On December 30, 2020, Law PC moved to withdraw as Plaintiff's counsel in the bankruptcy case alleging that Law PC and the Plaintiff disagreed on the direction of the bankruptcy case, Plaintiff believed Law PC was conspiring with Rushmore, and Plaintiff would no longer communicate with counsel. (Bankruptcy 19-46591, ECF No. 71 at ¶11.) After a February 2, 2021 hearing, the Court entered an order granting Law PC's request to be relieved as counsel. (Bankruptcy 19-46591, ECF No. 92.)
On March 1, 2021, Plaintiff filed a motion to recuse the Judge then assigned to the bankruptcy case. (Bankruptcy 19-46591, ECF No. 103.) On May 14, 2021, that Judge entered an order recusing herself (Bankruptcy 19-46591, ECF No. 146) and this bankruptcy case was reassigned to the undersigned. (Bankruptcy 19-46591, ECF No. 148.)
Also, on March 1, 2021, the Plaintiff filed a Notice of Voluntary Conversion resulting in the immediate conversion of the case from chapter 13 to chapter 7. (Bankruptcy 19-46591, ECF No. 106.)
On January 8, 2020, Gross Polowy, LLC in its capacity as "attorney for creditor" filed a proof of claim, Claim Number 5-1 (the "Investment P...
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