Personal injury claims that a person might have can become the property of the Bankruptcy estate. It is a tricky question depending on whether the bankruptcy case is in Chapter 7, 11 or 13. Pre-Petition claims are different from post-petition claims, yet they all came together in Horvath v Budin, Reisman, Kupferberg & Bernstein LLP 2021 NY Slip Op 30105(U)
January 13, 2021 Supreme Court, New York County Docket Number: 161339/2019 Judge: David Benjamin Cohen.
“In 2009, plaintiff filed a Chapter 13 Petition in the United States Bankruptcy Court for the District of New Jersey (“the Bankruptcy Court”) under Case No. 09-38537-KCF. Doc. 22. Plaintiff was represented in the bankruptcy proceeding by Jules Rossi, Esq. Doc. 22. On September 15, 2010, plaintiff was allegedly injured while he was a passenger in an elevator in a building in Manhattan. Doc. 21 at par. 4. Plaintiff thereafter retained the Law Offices of Michael Lamonsoff (“Lamonsoff’) to commence a personal injury action on his behalf against Gumley Haft Kleier Inc. (“GHK”) and Eltech Industries (“Eltech”). The action against GHK and Eltech was commenced in the Supreme Court, Bronx County in 2010 under Index Number 310013/10 (“the Bronx County action”). Doc. 17 at par. 16. Lamonsoff also represented plaintiff in an unrelated personal injury action commenced in New York County in 2010 under Index Number 115395/10 (“the New York County action”). Doc. 17 at par. 17.
The Bankruptcy Court confirmed the Chapter 13 plan on December 28, 2011. Doc. 23. ”
“In 2014, Eltech moved to dismiss the complaint in the Bronx County action based on the pending bankruptcy matter. Doc. 17 at par. 26. By order dated December 2, 2014, the Supreme Court, Bronx County denied the motion to dismiss. Doc. 26. By order dated March 7, 2017, the Appellate Division, First Department reversed and dismissed the complaint in the Bronx County action, stating, inter alia, that:
Plaintiffs prolonged failure to disclose this lawsuit to the Bankruptcy Court renders him judicially estopped from pursuing it … Plaintiff took an inconsistent position in the bankruptcy proceedings – that he did not have other legal claims than those listed on his schedule of assets and liabilities – and that position was adopted by the Bankruptcy Court when it confirmed the plan.”
“Here, as noted above, plaintiff claims that defendant’s actions, or inaction, regarding his bankruptcy resulted in the dismissal of the Bronx County action. Specifically, he alleges that: Defendant BUDIN, REISMAN, KUPFERBERG & BERSTEIN, LLP committed legal malpractice by failing to exercise that degree of care, skill and diligence commonly possessed by a member of the legal community. Doc. 21 at par. 60.
Plaintiff also alleges that he would have succeeded on his claim in the Bronx County action “but for the defendant’s negligence and legal malpractice.” Doc. 21 at pars. 62, 78. Further, plaintiff alleges that he sustained damages as a result of defendant’s negligence. Docs. 69, 82.
Since the complaint, viewed in the light most favorable to plaintiff, pleads a viable claim sounding in legal malpractice, that branch of defendant’s motion seeking dismissal pursuant to CPLR 3211(a)(7) is denied.”