Truong v. 325 Broadway Assocs. LLC (In re Truong)

• Decision Date: 30 August 2016
• Docket Number: Case No.: 16-19929 VFP,Adv. Pro. No.: 16-1380 VFP
• Citation: 557 B.R. 326
• Parties: In re: Mac Truong, Debtor. Mac Truong, Plaintiff, v. 325 Broadway Associates LLC, Alexis Feldman and David A. Kaminsky, Esq., Defendants.
• Court: U.S. Bankruptcy Court — District of New Jersey

557 B.R. 326

In re: Mac Truong, Debtor.Mac Truong, Plaintiff,

v.325 Broadway Associates LLC, Alexis Feldman and David A. Kaminsky, Esq., Defendants.

Case No.: 16-19929 VFP

Adv. Pro. No.: 16-1380 VFP

United States Bankruptcy Court, D. New Jersey.

Signed August 30, 2016

MAC TRUONG, Debtor-Plaintiff Pro Se, 63 Van Reypen Street, Jersey City, NJ 07306

DAVID A. KAMINSKY, ESQ., Attorney for Defendants, David A. Kaminsky Associates, PC, 325 Broadway, Suite 504, New York, NY 10007

CHARLES M. FORMAN, ESQ., Trustee, LeClairRyan, One Riverfront Plaza, 1037 Raymond Boulevard, Newark, NJ 07102

R. Kenneth Barnard, Esq., Chapter 7 Trustee for the Estate of Rosemary Ida Mergenthaler, 3305 Jerusalem Avenue, Wantaugh, NY 11793

OPINION

VINCENT F. PAPALIA, United States Bankruptcy Judge

I. INTRODUCTION

This matter is before the Court on three applications filed in the captioned bankruptcy case:

1. The Debtor's motion (the “Stay Motion”) in the associated adversary proceeding, Truong v. 325 Broadway Associates, LLC , Adv. Dkt. No. 16–1380 (VFP), to obtain an injunction and money damages against his commercial landlord, landlord's counsel, and landlord's officer (the “Defendants”) for continuing the eviction proceeding which the Defendants undertook in the Civil Court of the City of New York with respect to premises leased by the Debtor at 325 Broadway, New York, New York 10007, Unit # 200 (Dkt. No. 5);

2. The Defendants' motion to dismiss the Adversary Complaint under FED. R. CIV. P. 12(b)(6) / FED. R. BANKR. P. 7012(b) for failure to state a claim upon which relief can be granted and other related reasons (Dkt. No. 10); and

3. The contested Notice of Proposed Abandonment (the “Notice”) filed by Chapter 7 Trustee Charles M. Forman (the “Trustee”) with respect to 3 Wood Edge Court, Water Mill (Suffolk County), New York 11976 (the “Property”) (Dkt. No. 11).

The Debtor filed opposition and a reply in the adversary proceeding matter (Dkt. Nos. 11 and 12). Debtor filed an objection and supplemental objection to the Trustee's Notice of Proposed Abandonment (Main Dkt. Nos. 16 and 20), and the Trustee filed a reply thereto (Main Dkt. No. 22). A Statement in support of abandonment was also filed by R. Kenneth Barnard, Esq. (“Barnard”), who serves as Chapter 7 Trustee in In re ( Rosemary) Mergenthaler , Case No. 15–72040 (REG), filed in the United States Bankruptcy Court for the Eastern District of New York under the Honorable Robert E. Grossman (Main Dkt. No. 23). Debtor was active in the In re Mergenthaler case, where he also claimed, but was found not to have, an interest in the Property which is property of the Mergenthaler bankruptcy estate.

Also scheduled was a hearing on the application for admission pro hac vice filed by David A. Kaminsky, Esq., on June 28, 2016 in the adversary proceeding (Dkt. No. 6). Although Debtor filed an objection on July 14, 2016 (Dkt. No. 9), and Kaminsky filed a reply (Dkt. No. 14), the Court properly entered the Order for pro hac vice admission on July 13, 2016 (Dkt. No. 8), as the deadline for objections had passed. Nonetheless, and as set forth below, the Court reviewed Debtor's objection and Kaminsky's reply and finds that the objection states no grounds for not entering (or for vacating) the Order permitting Kaminsky to appear pro hac vice (Dkt. No. 8).

II. STATEMENT OF FACTS

A. The State Court Proceedings and the Bankruptcy Filing

The following facts are largely undisputed. Defendant 325 Broadway Associates, LLC, (“Broadway”), as Landlord and Debtor as Tenant, entered a commercial lease (the “Lease”) on September 19, 1994 for premises at 325 Broadway, New York, New York, Unit # 200 (the “Leased Premises”) (Dkt. No. 10, Kaminsky Cert., ¶ 5 and Ex. A, Lease). Kaminsky's law firm, David A. Kaminsky & Associates, P.C., represents Broadway in its landlord-tenant action against the Debtor in Civil Court of the City of New York (the “Civil Court”) and in Debtor's appeals therefrom. When the last extension of the Lease term ended on December 31, 2014, the Debtor became a month-to-month tenant (Dkt. No. 10, Kaminsky Cert., ¶ 6 and Ex. B, last extension through Dec. 31, 2014). Kaminsky certifies and the Debtor does not dispute that Debtor sublet a portion of the Leased Premises to a subtenant in 2012 and began to collect rent from the subtenant (Dkt. No. 10, Kaminsky Cert., ¶ 7).

By “30 Day Notice” dated February 9, 2016 (the “Termination Notice”), Broadway advised Debtor that his month-to-month tenancy would terminate on March 31, 2016 and that he would have to vacate the Leased Premises by that date. (Dkt. No. 10, Kaminsky Cert., ¶ 8 and Ex. C). The Debtor thereafter stopped paying the rent and did not vacate the Leased Premises (Dkt. No. 10, Kaminsky Cert., ¶ 9).¹ The Debtor, however, continued to collect rent from a subtenant after the Termination Notice. See Amended Complaint (Dkt. No. 3 at ¶¶ 22-26 and Count One).

On April 1, 2016, Broadway (through Kaminsky's law firm) filed a “Holdover Notice of Petition” in Civil Court for a judgment for possession and rent payment. Debtor answered and filed a counterclaim on May 16, 2016 (Dkt. No. 10, Kaminsky Cert., ¶¶ 10-11 and Exs. D and E). Trial began on May 19, 2016, but was adjourned to May 25, 2016, when the Debtor indicated after a lunch break that he was not feeling well and was seeking the attention of a doctor (Dkt. No. 10, Kaminsky Cert., ¶¶ 12-16). According to Kaminsky, the Civil Court Judge advised the Debtor to appear in court on May 25, 2016 and the Debtor acknowledged that he was advised of the new date. Id. at ¶ 16.

The Debtor filed the instant bankruptcy petition on May 23, 2016 and sent Kaminsky and the Civil Court Judge a “Notice of Proceeding Being Stayed” under 11 U.S.C. § 362(a) (Dkt. No. 10, Kaminsky Cert., ¶ 18 and Ex. J). On the May 25, 2016 Civil Court return date at which the Debtor did not appear, Kaminsky briefed and argued to the Court that the Leased Premises were not subject to the stay because the commercial lease had terminated prepetition (Dkt. No. 10, Kaminsky Cert., ¶ 19 and Ex. 1). Kaminsky indicates that Debtor was served with this memorandum and was instructed by the Civil Court to appear on May 26, 2016 to address the issue of whether the Civil Court Action was stayed. Debtor (per Kaminsky) told the Civil Court that he would not appear (Dkt. No. 10, Kaminsky Cert., ¶¶ 19-25).

On May 31, 2016, the Civil Court, by the Hon. Erika M. Edwards, issued a Decision and Order, which found that the stay did not apply to the Leased Premises pursuant to 11 U.S.C. § 362(b)(10) and that the Debtor's asserted interest in the Lease was not property of the estate pursuant to 11 U.S.C. § 541(b)(2). As a result, the Civil Court granted Broadway both a Judgment for Possession and a Warrant of Eviction (Dkt. No. 10, Kaminsky Cert., ¶ 26 and Ex. L). The Civil Court also held that the stay did apply to any action by the Landlord to collect rent from the Debtor (Dkt. No. 10, Kaminsky Cert., Ex. L at 5, 7).

Kaminsky stated in his reply to Debtor's objection to Kaminsky's pro hac vice retention on May 30, 2016, that Debtor filed a Complaint against Judge Edwards; and that, on June 6, 2016, he filed a Motion for Reconsideration of her Decision and Order; and on June 21, 2016 filed an Order to Show Cause to vacate her “Inquest Judgment” (Dkt. No. 14, Kaminsky Reply, ¶ 36). Both the Order to Show Cause and Motion for Reconsideration were denied by Judge Edwards and appealed by Debtor to New York's Appellate Division, which issued a temporary stay pending that Court's decision on Debtor's Motion to Vacate the Warrant for Eviction (Dkt. No. 15, Debtor's Motion filed Aug. 17, 2016, Orders entered on July 14, 2016 by Civil Court, Exs. 5 and 6; Order entered on July 22, 2016 by the Appellate Division, Ex. 8). However, based on subsequent pleadings filed by the Debtor, the Appellate Division denied the Motion to Vacate by Order entered on August 12, 2016 (Dkt. No. 15, Debtor's Motion filed Aug. 17, 2016, Ex. 1, Order entered Aug. 12, 2016 by the Appellate Term, Supreme Court of New York, denying Debtor's Motion to Vacate Warrant of Eviction).² Debtor's new pleadings also ask this Court to stay the State Court eviction proceedings.

B. The Adversary Proceeding

On May 31, 2016, the Debtor filed an Adversary Complaint ( Adv. Pro. No. 16–1380), against Broadway, Kaminsky and Alexis Feldman (“Feldman”) and an Amended Complaint on June 6, 2016 (Dkt. No. 3) with a jury demand. The Amended Complaint identifies Feldman as an officer of Broadway (Dkt. No. 3, ¶ 7). The six-count Amended Complaint alleges the following claims:

Count 1. Tortious interference against Broadway with respect to the subtenancy and a demand for $84,000 in actual damages, plus $168,000 in punitive damages ($252,000 total demand).

Count 2. Defamation against Broadway and Feldman for calling Debtor a “thief” during a hallway discussion at the courthouse on May 19, 2016, with a demand for $100,000 in actual damages, plus $200,000 in punitive damages ($300,000 total demand).

Count 3. Libel against Broadway and Kaminsky for referring to Debtor as “a disbarred attorney and known on Court records to be a liar and a fraud,” with a demand for $100,000 in actual damages, plus $200,000 in punitive damages ($300,000 total demand).

Count 4. Libel against Broadway and Kaminsky for allegedly violating the May 12, 2005 Order of the Third Circuit in Truong v. Baker, which Debtor states enjoined parties from referring to certain findings of forgery,³ with a demand for $1,000,000 in actual damages, plus $2,000,000 in punitive damages ($3,000,000 total demand).

Count 5. Stay violation against Broadway for proceeding with the eviction action, with a demand for $50,000 in actual damages plus $100,000 in punitive damages ($150,000 total demand).

Count 6. Declaratory judgment stating that the Judgment of Possession entered by the Civil Court is and void.

III. CONCLUSIONS OF LAW

These applications require the Court to decide the following legal...