Peterson v. Wells Fargo Bank, N.A. (In re Peterson)

• Decision Date: 19 April 2018
• Docket Number: Adv. Pro. No. 17–2081 (AMN),Case No.: 10–23429 (AMN)
• Citation: 585 B.R. 1
• Court: U.S. Bankruptcy Court — District of Connecticut
• Parties: IN RE: Alyssa S. PETERSON, Debtor Alyssa S. Peterson, Plaintiff v. Wells Fargo Bank, N.A., Molly T. Whiton, Former Chapter 13 Standing Trustee, Defendants

585 B.R. 1

IN RE: Alyssa S. PETERSON, DebtorAlyssa S. Peterson, Plaintiff

v.Wells Fargo Bank, N.A., Molly T. Whiton, Former Chapter 13 Standing Trustee, Defendants

Case No.: 10–23429 (AMN)

Adv. Pro. No. 17–2081 (AMN)

United States Bankruptcy Court, D. Connecticut, New Haven Division.

Signed April 19, 2018

Alyssa S. Peterson, 297 Grandview Terrace, Hartford, CT 06114, Pro Se Plaintiff

Christin E. Sheehan, Esq., Morrison Mahoney, LLP, One Consitution Plaza, 10^th Floor, Hartford, CT 06103, Counsel for the Defendant, Molly T. Whiton, Former Chapter 13 Standing Trustee

Re: ECF Nos. 6, 13

MEMORANDUM OF DECISION AND ORDER DISMISSING COUNTS 5, 6, 7, 8, AND 9 OF THE COMPLAINT

Ann M. Nevins, United States Bankruptcy Judge

Before the court is a motion filed by the defendant Molly T. Whiton as the former Chapter 13 Standing Trustee (the "Former Trustee") seeking dismissal of counts five through nine¹ of the adversary proceeding complaint² ("AP Complaint") filed by the debtor-plaintiff, Alyssa S. Peterson ("Ms. Peterson") pursuant to Fed.R.Civ.P. 12(b)(6), made applicable to this adversary proceeding by Fed.R.Bankr.P. 7012(b). AP–ECF No. 13.³ In the alternative, the Former Trustee seeks summary judgment as to counts five though nine based upon the doctrine of general release. AP–ECF No. 13. For the reasons that follow, the court grants the Former Trustee's motion to dismiss counts five through nine. As the court's order granting dismissal is dispositive, the court need not reach the Former Trustee's motion for summary judgment and that request is moot.

I. JURISDICTION

This court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1334(b) and 157(b), and the District Court's Order of referral of bankruptcy matters, dated September 21, 1984. This adversary proceeding is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). This adversary proceeding arises under Ms. Peterson's Chapter 13 case pending in this District; therefore, venue is proper in this District pursuant to 28 U.S.C. § 1409.

II. RELEVANT PROCEDURAL HISTORY

a. Ms. Peterson's Chapter 13 Bankruptcy Case

On October 5, 2010, Ms. Peterson, proceeding pro se , filed a voluntary Chapter 13 bankruptcy petition (the "Petition Date").⁴ ECF No. 1. From the Petition Date through August 31, 2017, Ms. Peterson's Chapter 13 bankruptcy was assigned to the Former Trustee. Approximately two and a half years after the Petition Date, on March 7, 2013, Ms. Peterson filed her Fifth Amended Chapter 13 Plan ("5^th Amended Plan"). ECF No. 245.

b. Ms. Peterson's Judgment against Hannah Woldeyohannes

A brief background regarding a pre-bankruptcy judgment obtained against a third party, Hannah Woldeyohannes ("Ms. Woldeyohannes") is important to understand Ms. Peterson's 5^th Amended Plan and this AP Complaint. Throughout the AP Complaint, Ms. Peterson references a judgment obtained against Ms. Woldeyohannes and acknowledges her status as a judgment creditor of Ms. Woldeyohannes. See AP Complaint, AP–ECF No. 6, ¶ 12 ("judgment proceeds from a business fraud case"), ¶ 34 ("as a judgment creditors in a Chapter 7 case"), and ¶ 35. Accordingly, this court takes judicial notice of the documents filed in Ms. Woldeyohannes's Chapter 7 bankruptcy case ("Woldeyohannes Case"), case number 11–20003 and in Ms. Peterson's Chapter 13 bankruptcy case, case number 10–23429.⁵ In January of 2011, Ms. Woldeyohannes filed a voluntary Chapter 7 bankruptcy petition. ECF No. 1 in case number 11–20003. In the Woldeyohannes Case, Ms. Peterson filed a proof of claim asserting a debt owed by Ms. Woldeyohannes of $248,117.52. POC 2–1 in case number 11–20003. As a basis for her claim, Ms. Peterson attached a copy of a judgment dated November 13, 2009 obtained against Ms. Woldeyohannes ("Woldeyohannes Judgment") in an action pending before the Connecticut Superior Court entitled Alyssa Peterson v. Hannah Woldeyohannes and bearing docket number HHD–CV–04–0834966–S. POC 2–1, P. 6 of 21. The Woldeyohannes Judgment awarded Ms. Peterson damages of $118,500.00. POC 2–1, P. 20 of 21. The Woldeyohannes Judgment was later amended to include an award of interest, bringing the total award to $195,482.96 as of November 13, 2009. POC 2–1, P. 5 of 21; See also Ms. Peterson' Schedule A, ECF No. 18 in case number 10–23429. The Woldeyohannes Judgment also determined that Ms. Woldeyohannes was the sole owner of a limited liability company named A to Zee, LLC, and prohibited Ms. Woldeyohannes from assigning her interest in A to Zee, LLC, and/or encumbering the assets owned by A to Zee, LLC. POC 2–1, P. 6 of 21.

In May of 2012, the court (Dabrowski, J.), in the Woldeyohannes Case, granted Ms. Peterson's motion seeking relief from the automatic stay to pursue collection of the Woldeyohannes Judgment.⁶ ECF Nos. 56 and 61 in case number 11–20003. Thereafter, in December of 2012, Ms. Peterson filed an amended motion for relief seeking permission to pursue collection of the Woldeyohannes Judgment against the assets of A to Zee, LLC. ECF No. 85 in case number 11–20003. In her amended motion, Ms. Peterson noted that subsequent to the entry of the Woldeyohannes Judgment, she commenced an action entitled Alyssa Peterson v. Carlton Hume, Hume & Associates, LLC, J. Hanson Guest, Guest & Associates, LLC, A to Zee, LLC, Mussie Russom, Sofia Woldeyohannes, Yodit Woldeyohannes, and Isaias Woldeyohannes , bearing docket number HHD–CV–11–5035394–S. See ECF No. 85 in case number 11–20003. As part of this subsequent action, Ms. Peterson obtained an order of prejudgment remedy entitling Ms. Peterson to attach the value of One Hundred Fifty–Two Thousand ($152,000.00) Dollars to the real estate owned by A to Zee, LLC. ECF No. 85 in case number 11–20003. The court (Dabrowski, J.) granted Ms. Peterson's amended motion, conditioned as follows:

ORDERED that the automatic stay of § 362(a) is modified pursuant to § 362(d) to permit [Ms. Peterson] to pursue recovery of her interests in [Ms. Woldeyohannes's] wholly-owned Connecticut limited liability company known as A to Zee, LLC (hereinafter, "A to Zee"), and any assets of A to Zee, including condominium property and bank accounts held under injunction by order of the Connecticut Superior Court since May 21, 2012; and

IT IS FURTHER ORDERED that so long as [Ms. Peterson's] Chapter 13 case is pending (or if said Chapter 13 case is converted to Chapter 7, so long as the Chapter 7 case remains pending) (i) any compromise or settlement agreement related to [Ms. Peterson's] attempt to recover said assets of A to Zee, shall be subject to approval of this Court upon a Motion to Approve such Settlement or Compromise, following notice and a hearing thereon in Case No. 10–23429, and (ii) any funds or other property recovered as a result of an approved settlement or compromise, or otherwise recovered, shall be immediately turned over to Molly Whiton, Chapter 13 Trustee, or to any successor Chapter 7 trustee should [Ms. Peterson's] Chapter 13 case be converted to Chapter 7, or to such other person as may be designated in writing by the Chapter 13 Trustee or any subsequent Chapter 7 trustee, to be administered as a part of [Ms. Peterson's] bankruptcy estate in Case No. 10–23429.

ECF No. 91 in case number 11–20003.

This Order was also docketed in Ms. Peterson's main bankruptcy case as ECF No. 215, and is referenced in the AP Complaint as a basis for Ms. Peterson's assertion that the Former Trustee owed a duty to Ms. Peterson.

c. Ms. Peterson's 5^th Amended Plan

In her Chapter 13 bankruptcy case, Ms. Peterson proposed to fund her 5^th Amended Plan primarily through proceeds of settlements or the collection of judgments against various third parties. In particular, the 5^th Amended Plan contained the following funding-related provisions:

In addition to pre-confirmation payments, if any, being held by the Trustee, Alyssa S. Peterson shall pay to the Trustee the sum of $200.00 each month for the duration of the plan. At confirmation, the Debtor shall make a lump sum payment of $70,155.46 being held in escrow by Attorney Anthony S. Novak which represents the remainder of a $87,500.00 settlement now in escrow received from one defendant in the matter Peterson v. Connecticut Attorneys Title Insurance Company (CATIC), et al. , Hartford Superior Court, Docket No. HHD–CV–10–5034546–S, following approval by the Court.

In addition, she will turn over the following assets and/or judgments when received:

a) Any settlement or judgment arising from other defendant(s) in the same matter, Peterson v. Connecticut Attorneys Title Insurance Company (CATIC), et al. , now awaiting decision from the Connecticut Appellate court;

b) Various net rental income as received per a Judgment obtained in the matter Peterson v. Woldeyohannes , Hartford Superior Court Docket No. CV–04–0834966–S, wherein Debtor is expected to assume 100% interest in the property of the limited liability company, A to Zee LLC, which property interest is valued to be $120,000.00, and net monthly rental income from which is estimated to be $1,500.00 monthly, and is to be turned over once collected to the Chapter 13 Trustee per Order of the Court (Dabrowski, J.) ECF Doc. 85 dated February 14, 2013 in the Chapter 7 matter, # 11–20003, Hannah Woldeyohannes, Debtor;c) Proceeds of an escrowed bank account (estimated to be $15,000.00), which sum represents escrowed rents from the A to Zee LLC condos when released by the Hartford Superior Court in the matter Peterson v. Woldeyohannes supra , and then to the Chapter 13 Trustee per Order of the Court (Dabrowski, J.) ECF. Doc. 85 dated February 14, 2013 in the Chapter 7 matter, # 11–20003, Hannah Woldeyohannes, Debtor;

d) The proceeds from a legal malpractice lawsuit estimated to be $70,000.00 or greater in the matter Woldeyohannes v. Carlton Hume, et al. , Hartford Superior Court Docket No. CV–12–6028634–S, initiated by the Chapter 7 Trustee, John O'Neil, who is overseeing the bankruptcy estate of # 11–20003, Hannah Woldeyohannes, Debtor, wherein the Chapter 13

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