Mammola et al v. Dwyer et al
Filing
15
Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER:" In accordance with the foregoing, defendants' motion to dismiss (Docket No. 6 ) is ALLOWED. So ordered." (Moore, Kellyann)
United States District Court
District of Massachusetts
________________________________
)
DIANE MAMMOLA and MICHELA
)
MAMMOLA,
)
Plaintiffs,
)
)
Civil Action No.
v.
)
13-10999-NMG
)
KATHLEEN P. DWYER, Individually )
and in her Official Capacity,
)
and MACLEAN HOLLOWAY DOHERTY
)
ARDIFF & MORSE, P.C.,
)
Defendants.
)
________________________________ )
MEMORANDUM & ORDER
GORTON, J.
Diane Mammola and Michela Mammola (“plaintiffs”), the
daughter and step-daughter of Seta Mammola (“Debtor”), bring suit
against Kathleen P. Dwyer (“Dwyer”), the duly appointed Trustee
of Debtor’s estate, and Dwyer’s law firm MacLean Holloway Doherty
Ardiff & Morse, P.C. (“MHD”) (collectively, “defendants”), for
alleged misconduct during Debtor’s bankruptcy proceedings.
I.
Background
Debtor filed for protection under Chapter 11 of the
Bankruptcy Code in 2010 in this District and Dwyer was appointed
Trustee of the estate.
The matter was later converted to a
Chapter 7 proceeding and Dwyer was named Chapter 7 Trustee.
Plaintiffs claim interests as beneficiaries of three commercial
trust properties included in Debtor’s bankruptcy estate.
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They
allege that because of defendants’ unlawful conduct during
Debtor’s bankruptcy proceedings the family real estate business
was effectively destroyed and they were forced to sell their
residence in Medford, Massachusetts.
In April, 2013 plaintiffs filed a pro se Complaint alleging:
breach of contract (Count I), breach of fiduciary duty (Count
II), “instrumentality” (Count VIII (sic)), intentional
misrepresentation (Count IX (sic)) and a violation of M.G.L. c.
93A (Count XI (sic)).
II.
Analysis
Defendants have moved to dismiss for lack of subject matter
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1).
A. Legal Standard
In considering a motion to dismiss for lack of subject
matter jurisdiction under Fed.R.Civ.P. 12(b)(1), the plaintiff
bears the burden of establishing that the court has subject
matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992).
The Court assumes that all material allegations
set forth in the complaint are true. See Mulloy v. United States,
884 F.Supp. 622, 626 (D. Mass. 1995); Williams v. City of Boston,
784 F.2d 430, 433 (1st Cir. 1986). The averments of the
complaint, as well as their proper inferences, are construed in
favor of the plaintiff and the claim will not be dismissed unless
"it appears beyond doubt that the plaintiff can provide no set of
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facts in support of his claim which would entitle him to relief."
Williams, 784 F.2d at 433; Mulloy, 884 F.Supp. at 626.
B. Application
Pursuant to the so-called Barton doctrine, a suit against a
bankruptcy trustee in a court other than the bankruptcy court is
barred unless plaintiff first obtains leave of the appointing
court. Barton v. Barbour, 104 U.S. 126, 127 (1881); Muratore v.
Darr, 375 F.3d 140, 143 (1st Cir. 2004).
The Barton doctrine
also applies to trustee’s counsel when counsel acts “at the
direction of the trustee and for the purpose of administering the
estate or protecting its assets.” Allard v. Weitzman (In re
DeLorean Motor Co.), 991 F.2d 1236, 1241 (6th Cir. 1993); see
also Hutchins v. Shatz, Schwartz and Fentin, P.C., C.A. No. 1230111-MAP, 2013 WL 783069, at *6-7 (D. Mass. Feb. 28,
2013)(Barton doctrine applies to suits against the trustee’s
attorneys).
Because plaintiffs failed to file a motion with the
Bankruptcy Court requesting leave to bring suit against
defendants, this Court lacks subject-matter jurisdiction over
this dispute.
Plaintiffs contend that an exception to the Barton doctrine
applies to this case.
That exception, codified in 28 U.S.C.
§ 959(a), states that trustees of property may be sued without
leave of the bankruptcy court if the action relates to “any of
their acts or transactions in carrying on business connected with
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such property.”
The limited exception does not, however, apply to this case.
The exception
“is intended to permit actions redressing torts committed in
furtherance of the debtor’s business, such as the common
situation of a negligence claim in a slip and fall case
where a bankruptcy trustee, for example, conducted a retail
store.”
Muratore, 375 F.3d at 146 (quoting Carter v. Rodgers, 220 F.3d
1249, 1254 (11th Cir. 2000)).
Thus, § 959(a) is not applicable
when, as here, a plaintiff’s complaint is based upon the
trustee’s alleged misconduct in liquidating assets and
administering property of the estate but not on tortious acts
committed in furtherance of the debtor’s business.
The fact that
Dwyer was originally appointed as Chapter 11 Trustee does not
change that analysis.
See, e.g., Muratore, 375 F.3d at 145
(declining to apply § 959(a) to an action against a Chapter 11
Trustee relating to alleged misconduct during bankruptcy
proceedings).
Plaintiffs may have a legitimate claim for relief against
defendants but unless and until plaintiffs file a motion in the
Bankruptcy Court seeking leave to file suit and that motion is
either granted or denied with leave to appeal, this Court lacks
jurisdiction and the case must be dismissed. See id. at 148
(declining to refer case to bankruptcy court rather than dismiss
because Fed. R. Civ. P. 12(h)(3) “states that a court ‘shall
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dismiss’ an action over which it lacks subject-matter
jurisdiction.”).
ORDER
In accordance with the foregoing, defendants’ motion to
dismiss (Docket No. 6) is ALLOWED.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated July 23, 2013
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