Salvatore v. Salvatore (In re Salvatore)

• Decision Date: 21 June 2018
• Docket Number: CASE No. 15-50724 (JAM),Adv. Pro. No. 17-05024
• Citation: 586 B.R. 371
• Court: U.S. Bankruptcy Court — District of Connecticut
• Parties: IN RE: Matthew B. SALVATORE, Debtor. Michele Salvatore, Plaintiff, v. Matthew B. Salvatore, Defendant.

586 B.R. 371

IN RE: Matthew B. SALVATORE, Debtor.

Michele Salvatore, Plaintiff,

v.Matthew B. Salvatore, Defendant.

CASE No. 15-50724 (JAM)

Adv. Pro. No. 17-05024

United States Bankruptcy Court, D. Connecticut.

Signed June 21, 2018

Kellianne Baranowsky, Lauren McNair, Jeffrey M. Sklarz, Attorneys for Plaintiff, Green & Sklarz LLC, 700 State Street, Suite 100, New Haven, CT 06511, Phone: 203-285-8545, Email: kbaranowsky@gs-lawfirm.com, lmcnair@gs-lawfirm.com, jsklarz@gs-lawfirm.com

Ellery E. Plotkin, Attorney for Defendant, 777 Summer Street, 2nd Floor, Stamford, CT 06901, Phone: 203-325-4376, Email: EPlotkinJD@aol.com

MEMORANDUM OF DECISION ON MOTION TO DISMISS

Julie A. Manning, Chief United States Bankruptcy Judge

I. Introduction

On May 28, 2015 (the "Petition Date"), Matthew B. Salvatore (the "Defendant"), filed a voluntary Chapter 7 petition. The deadline to file objections to discharge or dischargeability of a debt was set as August 24, 2015. No objections were filed, and the Debtor received a discharge on August 26, 2015. (ECF No. 17). On January 9, 2016, the Chapter 7 Trustee filed a report of no distribution and the bankruptcy case was closed on January 13, 2016.

On June 19, 2017, Michele Salvatore (the "Plaintiff"), filed a motion to reopen the case. After a hearing held on June 27, 2017, the Court entered an Order Granting the Plaintiff's Motion to Reopen Bankruptcy Case in Order to Obtain Determination of Nondischargeability Pursuant to 11 U.S.C. § 523(a) (the "Order Reopening the Case," ECF No. 37).

On August 24, 2017, the Plaintiff filed an adversary complaint against the Defendant (the "Complaint," Adv. Pro. ECF No. 1), seeking a determination of nondischargeability of a debt owed to her pursuant to 11 U.S.C. § 523(a)(3)(B) ("Count One") and 11 U.S.C. § 523(a)(6) ("Count Two"), and a revocation of discharge under 11 U.S.C. § 727(d)(1) ("Count Three"). On September 26, 2017, the Defendant filed a Motion to Dismiss Adversary Proceeding (Adv. Pro. ECF 7) and a Memorandum of Law in Support of Motion to Dismiss Adversary Proceeding (Adv. Pro. ECF 8) (collectively, the "Motion to Dismiss").

The Motion to Dismiss asserts that Count One and Count Two should be dismissed for lack of jurisdiction, lack of notice, and failure to state a claim upon which relief may be granted. The Defendant also asserts that dismissal of Count Three is appropriate due to a "lack of disclosure," and because the claim is time-barred. On November 1, 2017, the Plaintiff filed an Objection to the Motion to Dismiss (Adv. Pro. ECF 14), and a Memorandum of Law in Opposition to the Motion to Dismiss (Adv. Pro. ECF 15) (collectively, the "Objection"). On November 20, 2017, the Defendant filed a Reply to the Objection (the "Reply," Adv. Pro. ECF 17). After reviewing all relevant submissions by both parties, and for the reasons set forth below, the Motion to Dismiss is hereby GRANTED in part and DENIED in part.

II. Jurisdiction

The Court has subject matter jurisdiction over this adversary proceeding pursuant to 28 U.S.C. § 1334(b). The Bankruptcy Court derives its authority to hear and determine this matter pursuant to 28 U.S.C. § 157(a) and (b)(1) and the General Order of Reference of the United States District Court for the District of Connecticut dated September 21, 1984. This adversary proceeding is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I) and (J).

III. Standard

A. Federal Rule of Civil Procedure 12(b)(1) -subject matter jurisdiction

Federal Rule of Civil Procedure 12(b)(1) is made applicable in bankruptcy proceedings through Bankruptcy Rule 7012(b). See Fed. R. Bankr. P. 7012(b). "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." In re Ener1, Inc. , 558 B.R. 91, 94–95 (Bankr. S.D.N.Y. 2016) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) ). All material facts alleged in the complaint must be accepted as true, but the court need not draw inferences favorable to the plaintiff, as is the case with a Rule 12(b)(6) motion to dismiss. Id. ; In re Bernard L. Madoff Inv. Sec. LLC , 561 B.R. 334, 344 (Bankr. S.D.N.Y. 2016). The court may review pleadings as well as matters outside the pleadings to resolve factual disputes about the existence of jurisdiction to hear an action, and the party asserting jurisdiction bears the burden of proof. In re Bernard L. Madoff Inv. Sec. LLC , 561 B.R. at 344-45.

B. Federal Rule of Civil Procedure 12(b)(6) -failure to state a claim upon which relief can be granted

Rule 12(b)(6) of the Federal Rules of Civil Procedure is made applicable in bankruptcy proceedings through Bankruptcy Rule 7012(b). See Fed. R. Bankr. P. 7012(b). To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a pleading must contain a short, plain statement of the claim showing the pleader is entitled to relief,¹ and a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 557, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A pleading cannot merely recite the elements of a cause of action, nor "tender[ ] naked assertion[s] devoid of further factual enhancement." Id.

In Iqbal , the United States Supreme Court described a two-step analysis to evaluate the sufficiency of a complaint. First, all allegations contained in the complaint, except legal conclusions or "naked assertions," must be accepted as true, and second, the complaint must state a plausible claim for relief. Id. at 678-79, 129 S.Ct. 1937. "A claim is facially plausible where the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." In re Sagarino , No. 16-21218 (JJT), 2017 WL 3865625, at *2 (Bankr. D. Conn. Aug. 29, 2017) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ) (internal quotations omitted). Determining the plausibility of a claim for relief is context-specific and "requires the reviewing court to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937.

C. Federal Rule of Civil Procedure 9(b) -pleading fraud with particularity

Federal Rule of Civil Procedure 9(b) is made applicable in bankruptcy proceedings through Bankruptcy Rule 7009. See Fed. R. Bankr. P. 7009. Rule 9(b) requires a party to state with particularity the circumstances surrounding an allegation of fraud. Fed. R. Civ. P. 9(b) ; Fed. R. Bankr. P. 7009. Pleading fraud with particularity "ordinarily requires a complaint alleging fraud to (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." United States ex rel. Chorches for Bankr. Estate of Fabula v. Am. Med. Response, Inc. , 865 F.3d 71, 81 (2d Cir. 2017) (internal quotations omitted). "The adequacy of particularized allegations under Rule 9(b) is ... case- and context-specific ..." Espinoza ex rel. JPMorgan Chase & Co. v. Dimon , 797 F.3d 229, 236 (2d Cir. 2015). Allegations of malice, intent, and other conditions of a person's mind may be alleged generally. Fed. R. Civ. P. 9(b) ; In re Licata , No. 02-51167 (JJT), 2017 WL 2588337, at *4 (Bankr. D. Conn. June 14, 2017).

IV. Facts Alleged in the Complaint

The Complaint alleges the following facts, which pursuant to Iqbal and other controlling case law, the Court must accept as true for the purposes of the Motion to Dismiss:

1. The Plaintiff and the Defendant were married in April 2003. Compl. at ¶ 6.

2. On October 16, 2014, the Defendant was arrested for an altercation with the Plaintiff where the Defendant spit on and yelled at the Plaintiff in front of their children, pretended the Plaintiff hit him with her car, and called the police on the Plaintiff to falsely report the same (the "October 2014 incident"). Id. at ¶¶ 14-24.

3. On May 31, 2015, the Court's BNC Certificate of Mailing (ECF No. 6) regarding the notice of commencement of the Defendant's Bankruptcy Case was docketed. Id. at ¶ 32.

4. The Plaintiff was not listed on the May 31, 2015 BNC Certificate of Mailing. Id. at ¶ 34.

5. On June 18, 2015, the Defendant filed an Amended List of Creditors with the Plaintiff's name listed (ECF No. 11), but no certification appears on the docket regarding service of the Amended List of Creditors, and the Plaintiff did not receive notice. Id. at ¶¶ 35-6.

6. On June 18, 2015, the Defendant filed his bankruptcy schedules, listing the Plaintiff as a "Notice Party" on Schedule F, with a claim amount listed as "N/A," but did not serve the Plaintiff with the schedules. Id. at ¶ 37.

7. The Plaintiff's claims for alimony and child support payments were not listed on the Defendant's schedules, and Schedule E stated that the Defendant had no creditors holding unsecured priority claims. Id. at ¶ 38.

8. The Defendant listed no claim relating to the October 2014 Incident. Id.

9. The Defendant's Schedule J lists a $1,000.00 "Guardian Ad Litem" expense and $2,600 "Support/Alimony" expense. Id. at ¶ 39.

10. The first notice the Plaintiff received of the Defendant's bankruptcy case was receipt of the Court's August 28, 2015 BNC Certificate of Mailing (ECF No. 18) regarding the Defendant's discharge. Id. at ¶¶ 41-3.

V. Analysis of Claims raised in the Motion to Dismiss for Lack of Jurisdiction

A. Pleading Deficiencies

At the outset, and as noted in the Objection, the Motion to Dismiss fails to provide any procedural basis upon which the Defendant relies to obtain the relief requested. The Reply cites to Federal Rule of Bankruptcy Procedure 9024, which specifically states that actions to revoke a discharge must be brought within one year pursuant to 11 U.S.C. § 727(e). The Reply also asserts that as to all three...