Opinion
No. CV 05 4003165 S
June 2, 2010
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION TO DISMISS (#122)
FACTS PROCEDURAL HISTORY
On June 29, 2005, the plaintiffs, Jose Rentas and Victor Escobar, commenced this cause of action arising from a motor vehicle accident against the defendants, William H. White and William White Trucking. The plaintiffs allege the following facts. On or about July 17, 2003, the plaintiffs were passengers in a vehicle driven by Benjamin Saldana, a nonparty to this action. At the same time, defendant William White drove a tractor trailer owned by William White Trucking. The defendants' vehicle rear-ended the vehicle carrying the plaintiffs, resulting in serious injuries to the plaintiffs. The plaintiffs seek monetary damages.
The court, Schuman, J., granted Oliver Nurseries, Inc.'s (Oliver) motion to intervene on September 6, 2005. Oliver sought intervention pursuant to General Statutes § 31-293 as the employer of Victor Escobar, to whom it paid money under the terms of the Workers' Compensation Act.
On January 30, 2006, the defendants filed a motion for stay due to their filing of a voluntary bankruptcy petition in United States Bankruptcy Court for the District of Massachusetts on June 28, 2005. The Bankruptcy Court set May 29, 2006 as the deadline for filing a proof of claim. The court, Mintz J., granted the defendants' motion for stay on February 27, 2006. Oliver filed a motion for relief from stay on September 8, 2009. This court sustained the defendants' objection to that motion on September 28, 2009. The defendants' bankruptcy case was discharged by order of the bankruptcy court on August 11, 2009.
The defendants brought the present motion to dismiss and accompanying memorandum of law dated December 21, 2009, seeking dismissal of the plaintiffs' complaint for lack of subject matter jurisdiction. Specifically, the defendants argue that because the plaintiffs had adequate notice of their bankruptcy proceeding and failed to file the required proof of claim, any and all of the plaintiffs' prepetition claims were extinguished upon discharge. The plaintiffs, Rentas and Escobar, filed a memorandum of law in opposition arguing that "[a]lthough the claims were in fact discharged, protecting the Defendants from personal liability, such discharge does not allow third parties, such as insurers, from attempting to use this personal discharge to their advantage." The intervening plaintiff Oliver also filed a memorandum of law in opposition arguing that the defendants have produced no evidence to demonstrate that it was added to "Schedule F" of the defendants' bankruptcy petition. The matter was heard at short calendar on February 8, 2010.
II DISCUSSION
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134, 918 A.2d 880 (2007). "When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegation of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007).
A. Claims of Plaintiffs Rentas and Escobar
As stated above, the defendants argue that the plaintiffs' failure to file a proof of claim in the bankruptcy case once receiving proper notice has rendered any and all of the plaintiffs' prepetition claims extinguished by the discharge obtained August 11, 2009. In opposition, the plaintiffs Rentas and Escobar argue that while the discharge prevents them from recovering against the defendants individually, based on the holding of Lightowler v. Continental Ins. Co., 255 Conn. 639, 769 A.2d 49 (2001), their cause of action should not be dismissed but be allowed to proceed to collect from any available insurance policies.
"Congress has given the United States district courts original and exclusive jurisdiction over bankruptcy matters arising under title 11 of the United States Code. 28 U.S.C. § 1334(a). Through the United States Bankruptcy Code, 11 U.S.C. § 101 et. seq., Congress has provided a comprehensive federal system of penalties and protection to govern the orderly conduct of debtors' affairs and creditors' rights." (Internal quotation marks omitted.) Lewis v. Chelsea G.C.A. Realty Partnership, L.P., 86 Conn.App. 596, 602, 862 A.2d 368 (2004), cert. denied, 273 Conn. 909, 870 A.2d 1079 (2005). "A claim will be deemed pre-petition when it arises out of a relationship recognized in, for example, the law of contracts or torts. A claim exists only if before the filing of the bankruptcy petition, the relationship between the debtor and the creditor contained all of the elements necessary to give rise to a legal obligation — a right to payment — under the relevant non-bankruptcy law." Lightowler v. Continental Ins. Co., supra, 255 Conn. 647. "A `claim' is defined under the Bankruptcy Code as a `right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured . . .' 11 U.S.C. § 101(5)(A) (1994). Congress intended by this language to adopt the broadest available definition of claim . . . By this broadest possible definition . . . [of the term claim, the Bankruptcy Code] contemplates that all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case . . ." (Citations omitted; internal quotation marks omitted.) Id., 648-49. "[T]he confirmation of a plan . . . discharges the debtor from any debt that arose before the date of such confirmation . . . whether or not . . . (i) a proof of the claim based on such debt is filed or deemed filed under Section 501 of this title, (ii) such claim is allowed under Section 502 of this title; or (iii) the holder of such claim has accepted the plan . . ." 11 U.S.C. § 1141(d)(1)(A).
The Superior Court cases of Santiago v. Kmart Corp., Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV 03 083402 (May 28, 2004, Ronan, J.T.R.), and Leserra v. Garcia, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 01 0185531 (March 3, 2010, Brazzel-Massaro, J.), contain factual scenarios similar to the present case. In both cases, the court determined that since the plaintiffs failed to file a proof of claim, the Bankruptcy Court's discharge order expunged their pre-petition claims. "Although the plaintiff had a [prepetition] claim, there is no evidence that he submitted proof of that claim to the Bankruptcy Court. The Bankruptcy Court discharged the plaintiff's claim in accordance with § 1141(d)(1) of the Bankruptcy Code. 11 U.S.C. § 1141(d)[(1)][(A)]. Once a debtor filed for bankruptcy, all prepetition legal obligations of the debtor are dealt with in the bankruptcy case, and the United States district courts have exclusive jurisdiction over the bankruptcy matters. Accordingly, this court does not have subject matter jurisdiction over the plaintiff's prepetition claim." Leserra v. Garcia, supra, Superior Court, Docket No. CV 01 0185531.
In the present case, the plaintiffs Rentas and Escobar do not dispute that they both failed to file a proof of claim in the defendants' bankruptcy case. Accordingly, their claims were extinguished when the defendants were granted a discharge in their bankruptcy case. Additionally, Rentas and Escobar's claim that they should be able to recover against the defendants' insured based on the holding in Lightowler is incorrect. A significant distinction between Lightowler and the present case is that in Lightowler, the defendants' insurer was also a named defendant in the lawsuit. Here, the only defendants in the case are William H. White and William White Trucking.
B. Claims of Intervening Plaintiff Oliver Nurseries, Inc.
In opposition to the present motion to dismiss, the intervening plaintiff Oliver argues that its claims against the defendants should not be dismissed for two reasons. First, it claims that it never received proper notice of the bankruptcy proceeding in the form of an amendment to the defendants' Schedule F. Second, it advances the same argument as Rentas and Escobar concerning the holding in Lightowler v. Continental Ins. Co., supra, 255 Conn. 639.
"An action pursuant to General Statutes § 31-293 is an independent derivative action. `An employer's sole means to assert any right against the plaintiff's third party recovery [is] by way of the procedure set forth in § 31-293.' (Citations omitted; internal quotation marks omitted.). Mulcahy v. Mossa, 89 Conn.App. 115, 124, 872 A.2d 453 [cert. denied, 274 Conn. 917, 879 A.2d 894] (2005). `[A]n intervening employer's statutory right to reimbursement depends on the liability of the third party to the employee . . .' Id.; Packtor v. Sepala [AHO] Construction Co., 33 Conn.App. 422, 431, 636 A.2d 383 (1994)." Scap Motors, Inc. v. 675 Kings Highway, LLC, Superior Court, judicial district of Fairfield, Docket No. CV 05 5000105 (September 5, 2006, Arnold, J.). "An employer has no cause of action unless the employee has a cause of action . . . Therefore, it would be illogical to grant greater rights to an employer whose rights are derivative, than to the employee from whom those derivative rights flow." (Citation omitted.) Packtor v. Sepala AHO Construction Co., supra, 33 Conn.App. 431.
In the present case, Oliver has intervened in this case pursuant to § 31-293 to recover on a sum paid to the plaintiff Victor Escobar, who was employed by Oliver at the time of the alleged incident, under the Workers' Compensation Act. Since this court has already held that it does not have subject matter jurisdiction over the claim of relevant employee, Victor Escobar, it also lacks subject matter jurisdiction over Oliver's statutory claim.
III CONCLUSION
For the foregoing reasons, the defendants' motion to dismiss is granted.