Thompson v. Rizzitelli et al

Filing 186

SUPPLEMENTAL ORDER REGARDING PLAINTIFF'S BANKRUPTCY. Joint Status Report due by June 28, 2012. Signed by Judge Joan G. Margolis on 6/4/2012. (Rodko, B.)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
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:
MEL THOMPSON
:
:
:
v.
:
:
SAM RIZZITELLI, ET AL.
:
:
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3:10 CV 0071 (JBA)

DATE: JUNE 4, 2012

SUPPLEMENTAL ORDER REGARDING PLAINTIFF’S BANKRUPTCY
The factual and procedural history behind in this lawsuit is set forth in considerable
detail in this Magistrate Judge’s Order Administratively Closing File Due to Plaintiff’s
Bankruptcy, filed on February 8, 2012 (Dkt. #176)[“February 2012 Order”] and in the Order
Regarding Plaintiff’s Bankruptcy, filed April 23, 2012 (Dkt. #178)[“April 2012 Order”], with
respect to plaintiff’s pending Chapter 7 bankruptcy petition, filed on November 21, 2011, In
re Melvin Thompson, Case No. 11-32924-LMW.1 The February 2012 Order held:
The law is abundantly clear . . . that the automatic stay established
in 11 U.S.C. § 362 operates as a bar to continuation of defendant Rizzitelli’s
counterclaims against plaintiff, absent conclusion of the bankruptcy
proceedings or express authorization from U.S. Bankruptcy Judge Lorraine
Weil that defendant Rizzitelli may proceed on the counterclaim (known as
“relief from the stay.”).
(At 4, citing Dorsett-Felicelli, Inc. v. County of Clinton, Civ. No. 1:04-CV-1141 (LEK/RFT),
2009 WL 1652183, at *1 (N.D.N.Y. June 5, 2009)(citation omitted)). The February 2012
Order also held that because there is the “distinct and concrete” possibility that attorney’s
fees and costs may be imposed upon plaintiff, “under the unique circumstances of this case,

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Judge Arterton has referred this file to this Magistrate Judge on multiple occasions. (See
Dkts. ##8, 31, 41, 50, 110, 161). Familiarity is presumed with the countless rulings filed by this
Magistrate Judge in this case. (Dkts. ##25, 40, 67, 72, 114, 118, 120, 133, 146, 170, 171, 172,
175, 176).

both plaintiff’s complaint, in 10 CV 71 (JBA) and defendant Rizzitelli’s counterclaim in 11 CV
607 (JBA) are stayed, pending relief being granted by [U.S. Bankruptcy] Judge Weil to
proceed.” (At 6).2
As the April 2012 Order indicated, on April 17, 2012, counsel for consolidated plaintiff
Rizzitelli (from 11 CV 607 (JBA)) forwarded a letter to this Magistrate Judge, with a copy to
all parties and counsel of record, to which was attached a copy of the Trustee’s Report of
Abandonment, filed March 19, 2012 [“March 2012 Bankruptcy Order”], in plaintiff’s
bankruptcy case; the Order indicates that no objections having been filed, the Trustee has
abandoned as an asset of the estate all litigation in which the plaintiff-debtor is a plaintiff or
counter-plaintiff pending in the Second Circuit, this district, and the Connecticut Superior
Court. (April 2012 Order, at 2-3). In this letter, counsel for consolidated plaintiff Rizzitelli
(from 11 CV 607 (JBA)) sought “clarif[ication]” whether given the “intertwin[ing]” of the
factual issues in both cases, would both cases remain “administratively closed until the
bankruptcy concludes or if counsel may proceed on the defense of [plaintiff’s] . . . claims
alone.”

(Id.).

Therefore, the April 2012 Order required plaintiff and counsel to file

responses, with appropriate citations to governing statutory or judicial authority, on or before
May 14, 2012, with respect to the following questions:

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As a result, seven motions were denied without prejudice to renew, after relief being
granted by Judge Weil: (1) Defendant Rizzitelli’s Motion to Remand to State Court, filed May 4,
2011 (Dkt. #85); (2) Plaintiff’s Motion for Summary Judgment as to Count One of Counterclaim
Plaintiff Rizzitelli’s Complaint, filed January 9, 2012 (Dkt. #162); (3) Plaintiff’s Motion for Defendant
Sam Rizzitelli’s Compliance with #109 Order, filed January 9, 2012 (Dkt. #164); (4) Plaintiff’s
Motion for Summary Judgment against Defendant Dan Sexton, filed May 4, 2011 (Dkt. #82); (5)
Plaintiff’s Motion to Strike Answer to Amended Complaint Affirmative Defenses, filed June 18, 2011
(Dkt. #94); (6) Plaintiff’s Motion for Contempt and Sanctions, filed December 30, 2011 (Dkt.
#154); and (7) Defendants’ Motion for Order of Dismissal, filed December 29, 2011 (Dkt. #151).
(At 6-7). The first three motions were characterized as being “directly related to defendant
Rizzitelli’s counterclaims against plaintiff” and the last motion seeks the imposition of attorney’s
fees and costs against plaintiff, in violation of 11 U.S.C. § 362. (Id.).

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(1) Does the statutory and judicial authority still require both 10 CV
71 (JBA) and the member case, 11 CV 607 (JBA), to be stayed, as set forth
in the February 2012 Order, notwithstanding the Bankruptcy’s Trustee’s
abandonment of plaintiff’s litigation in the March 2012 Bankruptcy Order?
(2) If not,
(A) Does the March 2012 Bankruptcy Order now permit renewal of,
and a ruling upon, the fourth, fifth, and sixth motions listed above, namely
Plaintiff’s Motion for Summary Judgment against Defendant Dan Sexton, filed
May 4, 2011 (Dkt. #82), Plaintiff’s Motion to Strike Answer to Amended
Complaint Affirmative Defenses, filed June 18, 2011 (Dkt. #94), and Plaintiff’s
Motion for Contempt and Sanctions, filed December 30, 2011 (Dkt. #154)?;
and
(B) Does the March 2012 Bankruptcy Order now permit renewal of,
and a ruling upon, the first, second, and third motions listed above, namely
Defendant Rizzitelli’s Motion to Remand to State Court, filed May 4, 2011
(Dkt. #85), Plaintiff’s Motion for Summary Judgment as to Count One of
Counterclaim Plaintiff Rizzitelli’s Complaint, filed January 9, 2012 (Dkt. #162),
and Plaintiff’s Motion for Defendant Sam Rizzitelli’s Compliance with #109
Order, filed January 9, 2012 (Dkt. #164)?
(Id. at 3-4)(footnote omitted).
On May 14, 2012, plaintiff, Attorney Burns (counsel for Rizzitelli), and Attorney
Morgan (defense counsel for all defendants except defendant Sexton) filed their responses.
(Dkts. ##179-81). In his response, plaintiff indicates that he “has chosen not to pursue this
action until such time as . . . [the] bankruptcy action is discharged . . .” so that all aspects
of the litigation should be stayed. (Dkt. #179, at 1 & Brief).3 Attorney Burns agrees with
plaintiff that “the entire consolidated matter . . . should continue to be stayed until . . .
plaintiff Melvin Thompson files notice of resolution of his bankruptcy.” (Dkt. #180, at 1; see
also id. at 3-6).
Attorney Morgan, in contrast, takes the position that there are no grounds to stay

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Plaintiff also argues that the April 17, 2012 Letter was sent in violation of the automatic
stay; that clearly was not the case, as Rizzitelli’s counsel had a legitimate issue that needed judicial
resolution. (See also Dkt. #180, at 1).

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plaintiff’s lawsuit in 10 CV 71 (JBA), and that the Court retains the authority to dismiss that
action. (Dkt. #181, at 2). Attorney Morgan agrees that any award of attorney’s fees and
costs against plaintiff is prohibited, as any “award [of] monetary damages” would “run[]
afoul of the automatic stay.” (Id. at 2-3). As a result, defendants have authorized counsel
to “withdraw and relin[q]uish their claims that attorney[‘]s fees and costs be imposed upon
the plaintiff-bankrupt[,]” so that the lawsuit should be dismissed for plaintiff’s failure to
respond to outstanding court orders regarding discovery. (Id. at 3)(emphasis omitted). As
an alternative, Attorney Morgan agrees that if the Court “decides not to rule on the motion
to dismiss notwithstanding . . . defendants’ withdrawal and relinquishment of their claim for
monetary damages, then the entire action should be stayed.” (Id.).
Two days later, on May 16, 2012, this Magistrate Judge filed an electronic order (Dkt.
#182), that gave plaintiff and Attorney Burns an opportunity to file a supplemental response
to Attorney Morgan’s alternative suggestions, by May 23, 2012, if they chose to do so. In
his Supplemental Reply, filed May 23, 2012, Attorney Burns represents that Rizzitelli is not
waiving his claim for fees brought in connection with his Motion to Remand, that the Court
is entitled to dismiss plaintiff’s entire case, and that the consolidated case, 11 CV 607 (JBA),
should be “sever[ed]” and stayed. (Dkt. #183, at 1-2). On that same day, counsel filed an
appearance for plaintiff (Dkt. #184), in which he argues that 10 CV 71 (JBA) “was never
stayed” but that 11 CV 607 (JBA) is “stayed as a matter of law.” (Dkt. #185, at 1-2).4
The one matter about which plaintiff (both when he was pro se and now through
counsel), Attorney Burns, and Attorney Morgan agree is that 11 CV 607 (JBA) is stayed,
particularly in light of Attorney Burns’ continuing intention to seek attorney’s fees with
4

Plaintiff’s new counsel requests additional time to respond to one or more pending
motions in 10 CV 71 (JBA). (Id. at 2, n.1).

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respect to his Motion to Remand. As such, Attorney Burns is correct that 11 CV 607 (JBA)
ought to be “sever[ed]” from 10 CV 71 (JBA), so that the Order of Consolidation, filed May
4, 2011 in 11 CV 607 (JBA), Dkt. #10, and in 10 CV 71 (JBA), Dkt. #86, is revoked.
However, immediately upon restoring 11 CV 607 (JBA) as a separate action, the lawsuit is
hereby stayed, pursuant to 11 U.S.C. § 362.5
The more problematic issue, as before, is the effect of 11 U.S.C. § 362 upon 10 CV
71 (JBA). Contrary to the position of plaintiff’s counsel, this Magistrate Judge already has
ruled, in the February 2012 Order, that 10 CV 71 (JBA) was stayed in light of the “distinct
and concrete” possibility that attorney’s fees and costs may be imposed upon plaintiff.
However, both Attorney Burns and Attorney Morgan have agreed that 10 CV 71 (JBA) also
should be stayed, or alternatively, they are willing to waive their attorney’s fees and costs
in 10 CV 71 (JBA) provided that the lawsuit is dismissed. It is a gross understatement that
this litigation was unnecessarily complicated by the pro se plaintiff’s tactics in this litigation,
and the harsh response of defense counsel thereto. Both Attorney Burns and Attorney
Morgan are requesting that the Court act upon Defendants’ Motion for Order of Dismissal,
filed December 29, 2011 (Dkt. #151), which stems from the pro se plaintiff’‘s failure to fully
comply with the Court’s previous discovery rulings, for which both counsel are now willing
to forego attorney’s fees and costs in light of plaintiff’s bankruptcy. The Magistrate Judge
is fully confident that this litigation would not have reached such a boiling point had plaintiff
previously been represented by counsel. As warranted as dismissal may have been, it would

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As a result, the following three motions remain denied without prejudice to renew: (1)
Defendant Rizzitelli’s Motion to Remand to State Court, filed May 4, 2011 (Dkt. #85); (2) Plaintiff’s
Motion for Summary Judgment as to Count One of Counterclaim Plaintiff Rizzitelli’s Complaint, filed
January 9, 2012 (Dkt. #162); and (3) Plaintiff’s Motion for Defendant Sam Rizzitelli’s Compliance
with #109 Order, filed January 9, 2012 (Dkt. #164).

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now be a harsh result without giving new counsel an opportunity to “unring the bell” with
respect to at least some of the past discovery abuses.
Accordingly, in the interests of justice, 10 CV 71 (JBA) shall remain stayed, in order
to permit plaintiff’s new counsel an opportunity to fully immerse himself in this convoluted
lawsuit.

On or before June 28, 2012, Attorney Arcaro, Attorney Burns, and Attorney

Morgan shall file a Joint Status Report, which will advise the Court: (1) whether Attorney
Arcaro wishes to file an Amended Complaint; and (2) whether defendants wish to complete
their deposition of plaintiff, at which plaintiff will testify as appropriate, and if so, by when
this can be accomplished.6

A telephonic status conference will be scheduled shortly

thereafter before this Magistrate Judge, following which the stay may be lifted.7
Dated at New Haven, Connecticut, this 4th day of June, 2012.

/s/ Joan G. Margolis, USMJ
Joan Glazer Margolis
United States Magistrate Judge

6

If plaintiff fails to cooperate in any continued deposition, defendants may reclaim their
Motion for Order of Dismissal, filed December 29, 2011 (Dkt. #151), insofar as the motion seeks
dismissal of this lawsuit.
7

As a result, the following four motions shall remain denied without prejudice to renew, if
and when appropriate: (1) Plaintiff’s Motion for Summary Judgment against Defendant Dan Sexton,
filed May 4, 2011 (Dkt. #82); (2) Plaintiff’s Motion to Strike Answer to Amended Complaint
Affirmative Defenses, filed June 18, 2011 (Dkt. #94); (3) Plaintiff’s Motion for Contempt and
Sanctions, filed December 30, 2011 (Dkt. #154); and (4) Defendants’ Motion for Order of
Dismissal, filed December 29, 2011 (Dkt. #151).

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