Sanchez Goes to Bankruptcy Court to Ensure Dismissal in Civil BI Action
Clausen Miller partner Yesy Sanchez recently appeared at the Eastern District Bankruptcy Court in Central Islip, New York and successfully opposed Plaintiff’s motion to reopen her bankruptcy case. Plaintiff previously failed to disclose her bodily injury claims against the insured during her bankruptcy proceedings, and subsequently commenced an action against them. This information was uncovered during her deposition.
Upon learning of Plaintiff’s failure to comply with her statutory duty to disclose her assets to the Bankruptcy court, we filed a motion to dismiss on the grounds that Plaintiff lacked standing to sue. This is because claims that are not disclosed, administered, or abandoned by the bankruptcy court cannot be pursued by Plaintiff thereafter. Our motion also asserted that Plaintiff’s claims were barred by judicial estoppel, since she had taken a prior inconsistent position during the bankruptcy case. Specifically, Plaintiff filed a schedule of assets which she failed to amend to include the bodily injury claims, and thereafter, sought to pursue those claims in State court.
After the motion to dismiss was filed, Plaintiff opposed our motion in State court and filed a motion in bankruptcy court seeking to reopen her case. Plaintiff’s motion asked the bankruptcy court to reopen her case for the sole purpose of abandoning her bodily injury claims against the insured. Had the Bankruptcy court granted Plaintiff’s motion, it would have destroyed the basis of the insured’s pending motion to dismiss and permitted Plaintiff to pursue her bodily injury claims. The Bankruptcy court determined that Plaintiff’s conduct was willful and that it would not reopen her case as it would interfere with the State court action, including the insured’s pending motion to dismiss.
This case highlights Clausen Miller attorneys’ willingness to go outside traditional venues to defend a bodily injury claim. For more information, contact Yesy at [email protected].
Yesy A. Sanchez