Leahey et al v. SP Center, LLC et al
OPINION re: 130 MOTION for Summary Judgment . filed by Precast Services Inc, 134 MOTION for Summary Judgment . filed by Aurora Contractors, Inc., Mall 1-Bay Plaza, LLC.Based on the facts and conclusions set forth above,the Defendants' motions for summary judgment are denied, and the Plaintiffs' action may proceed. (Signed by Judge Robert W. Sweet on 11/3/2017) (js)
UN I TED STATES DIS TRI CT COURT
SOUT HE RN DISTRICT OF NEW YORK
ILL IAM LEAHEY and LAUREN LEAHEY,
Pl aint iff s ,
1 4 Civ . 7411
- against OP I NION
SP CENTER , LLC , MALL 1-BAY PLAZA , LL C,
a/k/a BAY PLAZA , LL C a/k/a BAY PLAZA MALL,
LLC, AURORA CONTRACTORS , INC . and
MACY ' S , I NC .,
Defenda n ts .
SP CENT ER, LLC , MALL 1- BAY PLAZA , LLC, a/k/a
BAY PLAZA , LLC, a/k/a BAY PLAZA MALL , LLC
Th i rd -Party Pl ainti ff s ,
- against GLOBAL PRECAS T I NC ., UNISTRESS CORP . and
PRECAS T SERVICES , INC .,
Third - Pa r ty Defenda n ts .
AURORA CON TRACTORS , INC .,
Fo u rth - Party Pl a i nt iff s ,
- against UNIS TRESS CORP . and PRECAS T SERV I CES ,
Fo urt h - Par t y Defendants .
PRECAS T SERVIC ES , INC .
Fift h- Party Pl aint i f f s ,
- agains t RUTTURA & SONS CONS TRUC TI ON CO .,
I NC .,
and CONSTRUCTION & REALTY SAFETY GROUP
d/b/a CR SAFETY GROUP,
MALL 1-BAY PLAZA, LLC a/k/a BAY PLAZA, LLC
a/k/a BAY PLAZA MALL , LLC and AURORA
CONTRACTORS , INC.,
- against CONSTRUCTION & REALTY SAFETY GROUP, INC.,
RUTTURA & SONS CO. , INC., RUTTURA & SONS
CONSTRUCTION CO., INC., and CONSTRUCTION &
REALTY SAFETY GROUP , INC.,
Sixth - Party Defendants.
A P P E A RA N C E S:
Attorneys for Plaintiffs
NAPOLI SHKOLNIK, PPLC
360 Lexington Avenue , 11th Floor
New York , NY 11017
Joseph P. Napoli, Esq.
Attorneys Third-Party Plaintiffs/FourthParty Plaintiffs/Sixth-Party Plaintiffs
LAW OFFICE OF JAMES J. TOOMEY
485 Lexington Avenue, 7th Floor
New York , NY 10017
John C. Spataro , Esq.
Attorneys for Third/Fourth-Party
LEWIS JOHS AVALLONES AVILES, LLP
61 Broadway, Suite 2000
New York , NY 10006
David L. Metzger, Esq.
Third - and fourth-party Defendant/fifth-party
Plaintiff Precast Services , Inc .
("Precast") and sixth-party
Plaintiffs Mall 1 - Bay Plaza ("Bay Plaza") and Aurora
Contractors , Inc .
(collectively, the "Defendants " )
have moved pursuant to Fed . R . Civ . P. Rule 56 for summary
judgment to dismiss the Complaint (the "Complaint") of the
Plaintiffs William Leahey ("Mr . Leahey") and Lauren Leahey
("Mrs. Leahey " )
(collectively , the "Plaintiffs") . Based on the
facts and conclusions set forth below , the motions of the
Defendants are denied.
The Plaintiffs commenced this action by filing the
Complaint on September 12, 2014 alleging claims of negligence,
loss of services, and violations of New York State Labor Laws
200 , 240 , and 24l(b) . Answers were filed by Bay Plaza on October
16 , 2014 , and by Aurora on January 2 , 2015 .
An amended third-party complaint was filed by SP
Center, LLC and Bay Plaza against third - party defendant Precast
on November 14 , 2014 , to which Precast filed an answer on
December 22 , 20 1 4 .
Aurora filed a fourth-party comp l aint against Precast
on January 16 , 2015 , to which Precast answered on February 11 ,
2015 . The actions against defendants SP Center
Unistress Corp . were then discontinued on Ju l y 13 , 2015 , July
15 , 2015 , and August 22 , 2015 , respectively.
A fifth - party complaint was filed by Precast against
Ruttura & Sons Construction Co , Inc.
("Ruttura Construction " )
and Construction & Realty Safety Gro u p
("Construction & Realty " )
on November 24 , 2015 , and answers were interposed by both
A sixth-party complaint was filed by Bay Plaza and
Aurora against Ruttura Construction and Constnuction & Realty on
November 25 , 2015 , and answers were interposed by both parties .
The instant motions for summa r y
were filed by
Precast and Aurora on July 10, 20 1 7 . Oral argument was heard on
September 20 , 2017 . The motions were adjourned until October 18 ,
2017 , pending the Honorable Andrew B. Altenburg , Jr . of the U. S.
Bankruptcy Court for the District of New Jersey's
"Bankruptcy Court " ) reconsideration of whether
o add this
action as an asset , at which point the motions
ere heard and
the case was marked fu l ly submitted .
The facts have been set forth in the Defendants '
the Plaintiffs ' Rule 56 . 1 Statements , and are 9ot in dispute
except as noted below .
Mr . Leahey was involved in an accident which forms the
basis of this lawsu i t . On September 18 , 2013 , between 1 : 30 and
2 : 00 PM , Mr. Leahey , who was employed as an Iron Worker with
Precast , was walking through the parking garage of the
construction site for a new Macy ' s parking lot located at the
Mall of Bay Plaza , 100 Baychester Avenue , Bronx , New York .
Aurora was the general contractor for the job site . Mr . Leahey
noticed construction debris on the floor , and as he went to step
over it , he tripped and fell on an uneven mound of dirt with his
left foot. As a result o f this fall , Mr . Leahey injured his left
ankle. He completely tore the anterior talofibular ligament ,
partially tore the calcaneof i bu l ar ligament , and injured the
Brostrom lateral ligament , which required reconstru c tive
surgery . Mr . Leahey also injured his left knee.
Previously , on January 24 , 2011 , the Pl aintiffs filed
a Voluntary Petition for Individual/Joint Debtors
Petition " ) under Chapter 13 of the U. S . Bankruptcy Code with the
Bankruptcy Court . Contained as part of that filing were
schedules identifying the Pl aintiffs and their property ,
including contingent and unliquidated c l aims , flor which the
Plaintiffs checked " None ." See Precast Br . Ex . K, at 11 .
On September 12 , 2014 , the Plaintiffs commenced this
lawsuit . Neither the Plaintiffs nor their bankruptcy attorney ,
Mr . Steven Taieb ("Mr . Taieb " ) informed the Bankruptcy Court of
this action until after the Plaintiffs ' bankruptcy case was
dismi ssed. However, on or about March 6, 2015 , Mrs . Leahey sent
Mr . Taieb a fax informing him of this action . Pls. ' Br . Ex . E.
Moreover , Mr . Leahey testified in his August 31 , 2015 deposition
that he filed for bankruptcy approximately four to five years
prior , and that it was "almost done ." See Precast Br . Ex . L , at
9. He also testified that he "believed" that the Bankruptcy
Court was notified of the lawsuit , although he stated that his
wife "handles that . " Id. Mrs . Leahey
on October 27 ,
2016 , after the close of the bankruptcy , that she specifica l ly
notified Mr . Taieb of this lawsuit . Id . Ex . P , at 11 . Mrs.
Leahey said that she was "sure " that Mr. Taieb would have filed
documentation with the Bankruptcy Court , but she did not recall
ever seeing such documentation.
In September 2015 , the Defendants Bay Plaza , Aurora ,
and Precast served post - deposition documents demands on the
Plaintiffs , requesting all documents pertaining to the
Plaintiffs' bankruptcy filings including, but not limited to
"Petition and all schedules , supplemental/amended filings ,
identities of trustees, order , and transcripts of any meeting of
creditors ." See Precast Br. Ex . H; Aurora Br .
do not dispute that they did not respond to these demands.
The Bankruptcy Court issue d its Chapter 13 Standing
Trustee's Final Report and Account (the "Final Report " ) on May
5 , 2016 . Aurora Br . Ex. L . An Order of d i scharge pursuant to 11
U. S . C. § 1 328(a) was granted to the Plaint iffs on May 8 , 2016 .
Id. at Ex. M, at 2 . A Final Decree was filed and entered on June
7 , 2016 stating that the Plaintiffs' estate had been fully
administered , and the bankruptcy case was closed . Id . at Ex . N.
On July 24 , 2017 , Mr . Taieb filed a Motion to Reopen
the bankruptcy case t o add this action as an asset , and this
motion was denied . See Pls .' Br . Exs . B & H. Mr. Taieb then
filed a Motion for Reconsideration with the Bankruptcy Court on
September 5 , 2017 , in which he stated that "[t]he debtors
definitely disclosed the injury claim to counsel and it was
clearly their intent to amend the petition to add these post petition claims. " Id. Ex . H, at 2 . This motion was also denied .
See id . Ex . H.
Further, a list of document filings printed from the
database of the Bankruptcy Court makes no reference to any
amendment or supplement schedule disclos in g this action to the
Bankruptcy Co urt.
Id . at Ex. P . Moreover , the two annual
Trustee's Rep orts of Receipts and Disbursements filed after the
accident occurred and cover ing the period of January 1, 2013 to
December 31 , 2014 do not indi cate any notification of the
lawsuit to the Bankruptcy Court . Id. at Ex . Q. The Plaintiffs do
not dispute these facts .
The Applicable Standard
Summary judgment is appropriate only where "there is
no genuine issue as to any material fact and .
. the moving
party is entitled to a judgment as a matter of law."
Civ . P . 56(c).
Fed . R.
"[T]he substantive law will ide ntify which facts
are material. " Anderson v . Liberty Lobby, Inc. , 477 U. S . 242 ,
A dispute is "genuine" if "the evidence is such that a
reasonable jury could return a verdict for the nonmovi ng party . "
Id. The relevant inquiry o n application for summary judgment is
"whether the evidence presents a sufficient di J agreement to
require submission to a jury or whether it is ~ o one - sided that
one party must prevail as a matter of law . "
Id . at 25 1-52 .
court is not charged with weighing the evidence and determining
its truth , but with determining whether there is a genuine issue
Westinghouse Elec . Corp . v . N . Y . City Transit Auth. ,
735 F . Supp . 1205 , 121 2 (S .D . N. Y. 1990)
U.S . at 249) . "[T]he mere existence of some alleged factual
dispute between the parties will not defeat an ot herwis e
properly supported motion for summary judgment; the requirement
is that there be no genuin e issue of material fact. " Anderson,
477 U. S . at 247 - 48
(emphasis in original).
While the moving party bears the initial burden of
showing that no genuine issue of material fact exists , Atl . Mut .
Ins . Co . v . CSX Lines, L.L.C ., 432 F . 3d 428,
(2d Cir . 2005) ,
in cases where the non - movi ng party bears the burden of
persuasion at trial , "the burden on the moving party may be
discharged by 'showing'-that is , pointing out t o the district
court-that there is an absence of evidence to support the
nonmoving party's case ." Celotex Corp. v. Catr J tt , 477 U. S . 317 ,
325 (1 986). " It is ordinarily suffic i ent for the movant to point
to a lack of evidence
. on an essential element of the non -
movant ' s claim.
[T]he nonmoving party must [then] come
forward with admissible evidence sufficient to raise a genuine
issue o f fact for trial
" Jaramillo v . Weyerhaeuser Co .,
536 F . 3d 140 , 145 (2d Ci r . 2008)
(interna l citations omitted) ;
see also Goenaga v . March of Dimes Birth Defects Found ., 51 F.3d
14 , 18 (2d Cir. 1995)
(" Once the moving party has made a
properly supported showing sufficient to suggest the abse n ce of
any genuine issue as to a mater i al f act , the nonmoving party
. must come forward with evidence that wou l d be sufficient to
support a jury verd i ct in his favor") .
The Defendants' Motions for Summary Judgment Are Denied
The Defendants contend that the Plaintiffs are
precluded from bringing the present action regarding the
Plaintiff's alleged injury because they failed to amend their
Voluntary Petition under Chapter 13 of the U. S. Bankruptcy Code
to include the instant litigation . Th e Plaintiffs argue that the
e l ements of judicial estoppel have not been met as they were
forthcoming about the present lawsuit and never attempted to
concea l i t as an asset in the bankruptcy proceeding.
Specifically , the Plaintiffs assert-and their bankruptcy
attorney has confirmed under oath-that they informed their
bankruptcy attorney of the subject of this lawsuit in March 2015
with the clear intent that he amend the Voluntary Petition
pending before the Bankruptcy Court . See Pls.' Br. 5.
Th e doctrine of judicial estoppel "i s an equitable
doctrine invoked by a court at its d i scretion " that " prevents a
party from asserting a factual position in one legal proceeding
that is contrary to a pos i tion that it successfully advanced in
another proceeding." See New Hampshire v . Maine , 532 U. S. 742 ,
750 (2001) ; Rodal v . Anesthesia Group of Onondaga, P.C ., 369
F.3d 113, 118 (2d Cir. 2004) . The underlying goal of the
doctrine is to "protect the integrity of the judicial process by
prohibiting parties from deliberately changing positions
according to the exigencies of the moment ." Maine , 5 3 2 U. S . at
(internal quotation marks and citations omitted) .
The circumstances under which judicial estoppel may be
invoked are " probably not reducible to any general formulation
of principle," and as such , the applicability of the doctrine is
not bound by "infl exible prerequ i sites or an exhaustive
formula." See id. at 750 - 51 (quoting Allen v . Zurich , 667 F.2d
1162 , 1166 (4th Cir. 1982)
(internal citations omitted)) .
Nevertheless , three factors typically guide the judicial
estoppel inquiry . First , " a party ' s later position must be
clearly inconsistent with its earlier position . " Id .
quo tation marks and citations omitted) . Second , courts consider
whether the party bringing the claim " succeeded in persuad i ng a
court to accept that party ' s ear l ier position , so that judicial
acceptance of an i nconsistent position in a later pro c eeding
would create ' the perception that either the first or the second
court was misled .'" Id.
(citing Edwards v . Aetna Life Ins . Co .,
690 F . 2d 595 , 599 (6th Cir. 1982)) . Third , courts ask "whether
the party seeking to assert an inconsistent position would
derive an unfair advantage or impose an unfair detrime nt on the
oppos i ng party if not estopped ." Id .
The Second Circuit has yet to directly address a case
in which a plaintiff has sought to bring a claim on the basis of
an asset he failed to disclose during a bankruptcy pr o ceeding .
However , this Circuit has concluded that "[i]t may be
appropriate to resist application of judicial estoppel when a
party ' s prior position was based on an inadvertence or mistake . "
See id .
(citing Maine , 532 U. S . at 753); see also Mitchell v .
Wash i ngtonville Cent. Sch . Dist ., 190 F . 3d 1 , 6 n . 2 (2d Ci r.
(" judicial estoppel does not apply when the first
statement resulted from ' a good faith mistake or an
unint ent i onal error '" )
128 F.3d 68 , 72
(cit in g Simon v . Safelite Glass Corp. ,
(2d Cir . 1997)). Moreover , a defendant ' s
"judicial estoppel defense cannot succeed , absent a showing that
p l a intiff acted in bad faith or wi th intent to mislead the
Court. " See Murray v . Bd . of Educ . of City of New York , 248 B.R.
484 , 487
(S .D .N.Y. 2000).
The parties do not dispute that the Plaint i ffs f a il ed
to d i sc l ose this lawsuit to the Bankruptcy Cour t
in line with
their disclosure obligations under the bankruptcy code. The
quest i on remains whet h er this failure constitutes "a good faith
mistake or unintentional error " to judicial estoppel. See
Mitchell , 190 F.3d at 6 n . 2.
A reiteration of the relevant facts in this case
serves to guide this analysis . The Plaintiffs filed the
Voluntary Petition with the Bankruptcy Court on January 24 ,
20 11, and commenced this su i t on September 12, 2014 . In March
2015, Mrs. Leahey informed her bankruptcy attorney of th i s
action via fax,
see Pls. ' Br. Ex. E, and on or about August 31 ,
2015 , Mr. Leahey testified in his deposition that he be l ieved
the Bankruptcy Court was aware of the subject of this case ,
id. Ex . L, at 9 . Mrs . Leahey testified to a similar effect on or
about October 27 , 2016 ,
see Precast Br . Ex. P , at 11. The
Bankruptcy Court discharged the bankruptcy on May 8 , 2016 ,
before either the Plaintiffs or their bankruptcy attorney
informed the court of this cause of action . See Aurora Br. Ex.
M, at 2 . Over a year after the bankruptcy had been discharged ,
the bankruptcy attorney fi l ed a Motion to Reopen the bankruptcy
case to add this lawsuit as a post - pet i t i on asset , which was
denied . See Pls .' Br. Exs. B & H. The bankruptcy attorney
subsequently filed a Motion for Reconsideration on September 5 ,
2017 , which was also denied , in which he reiterated that the
Pl aint iffs "definitely disclosed the injury claim to counse l"
and that it was "clearly their intent to amend the petition to
add these post - petition claims ." See id . Ex. H, at 2 .
As evidenced by this record , the Plaintiffs have not
made any attempt to conceal the existence of this action from
the Bankruptcy Court . The Plaintiffs both clearly believed that
their bankruptcy attorney had already disclosed this case to the
Bankruptcy Court shortly after the commencement of this act i on .
Indeed , the Plaintiffs ' bankruptcy attorney testified to exactly
this e ff ect . Moreover , the Plaintiffs twice sought to amend
their bankruptcy schedule to include this action , evidencing
that they had no interest in unfairly benefitting by attempting
to keep this suit secret . To hold the Plaintiffs accountab l e for
their bankruptcy attorney's mistake-and to bar the Plaintiffs
from asserting claims against Defendants because of an attorney
error-would contradict the demands of justice. See Coleman v.
American Red Cross, 23 F.3d 1091, 1094
(6th Cir. 1994 )
court, like many others, has been extremely reluctant to uphold
the dismissal of a case merely to discipline an attorney.").
Absent a showing of bad faith on the part of the Plaintiffs,
there is no reason to preclude them from pursuing this claim.
Accordingly, the Plaintiffs' current action is excepted from the
doctrine of judicial estoppel.
Moreover, the Plaintiffs rightfully contend that, as
Chapter 13 debtors, they have standing to maintain this action
against the Defendants. See Murray,
248 B.R. at 485; see also
Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513, 515
("[A] Chapter 13 debtor, unlike a Chapter 7 debtor,
has standing to litigate causes of action that are not part of a
case under title 11.").
Based on the facts and conclus ions set forth above,
the Defendants ' motions for summary judgment are denied, and the
Plaintiffs ' action may proceed.
It is so ordered .
New York, NY
U.S.D . J.
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