Clark v. Bakst (In re Trafford Distributing Center, Inc.)

520 B.R. 147
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedOctober 28, 2014
DocketCase No. 11-23492-BKC-AJC; Adv. Pro. No. 11-1999-BKC-AJC
StatusPublished
Cited by1 cases

This text of 520 B.R. 147 (Clark v. Bakst (In re Trafford Distributing Center, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark v. Bakst (In re Trafford Distributing Center, Inc.), 520 B.R. 147 (Fla. 2014).

Opinion

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

A. Jay Cristol, Judge, United States Bankruptcy Court

THIS MATTER came before the Court for hearing on October 6, 2014 at 11:00 a.m. in Miami, Florida upon Defendants’ Motion to Dismiss [ECF No. 4] (“Motion to Dismiss”), Plaintiffs Response to Defendants’ Motion to Dismiss [ECF No. 15] (“Plaintiffs’ Initial Response”), Plaintiffs Supplemental Response to Defendants’ Motion to Dismiss [ECF No. 32] (“Plaintiffs’ First Supplemental Response”), Defendant’s Reply to Plaintiff’s Response and Supplemental Response to Defendants’ Motion to Dismiss [ECF No. 33] [149]*149(“Defendants’ Reply”), Supplement to Defendants’ Motion to Dismiss [ECF No. 4] and Reply Memorandum [ECF No. 33] [ECF No. 68] (“Defendants’ Initial Supplement”), and Plaintiffs’ Supplemental Response to Defendants’ Motion to Dismiss and Defendants’ Reply to Plaintiffs’ Response and Supplemental Response to Defendants’ Motion to Dismiss [D.E. 68] [ECF No. 69] (“Plaintiffs’ Second Supplement”). By order dated September 25, 2014, this Court set the hearing on the Motion to Dismiss for October 6, 2014 [ECF No. 62] and a Certifícate of Service of that order was filed with this Court. [ECF No. 64], Accordingly, notice of the hearing on the Motion to Dismiss was adequate and no further notice is necessary. The Court, having reviewed the record in Debtor Trafford Distributing Center, Inc.’s chapter 7 case, the captioned Adversary Proceeding and the Related Adversary Proceedings (as that term is defined in Note 2, infra1), the foregoing pleadings and the decisional law cited therein, having heard extensive argument of counsel, and being fully advised in the premises, for the reasons stated on the record and those set forth below, finds and rules that the Motion to Dismiss is granted and this Adversary Proceeding is dismissed with prejudice.

Background

1.On April 27, 2011, Barbara Wortley, Richard I. Clark, as Trustee for Joseph M. Wortley Trust, d/b/a X Co. Factoring Corp., Liberty Properties at Trafford, LLC, Liberty Associates, LC and Advanced Vehicle Systems, LLC (collectively, “Plaintiffs”) filed their Plaintiffs’ Complaint (“Complaint”) with the Broward County, Florida Circuit Court (“State Court”), Case No. 11-009808 (“State Action”). [ECF No. 1 (Notice of Removal) ]. The defendants named in the Complaint were Michael R. Bakst and George Steven Fender (collectively, “Defendants”). The Complaint contains two Counts: “Conspiracy to Obstruct Due Operation of Law and Deprive Plaintiffs of Their Right to A Fair Trial” (Count I), and “Fraudulent Corruption of the Judicial Process” (Count II). [A copy of the Complaint is attached to ECF No. 1 (the Defendants’ “Notice of Removal”) ].

2. The crux of the Complaint is that, in the context of related adversary proceedings that were transferred to this Court,2 Defendant Michael Bakst, while court-approved counsel to chapter 7 trustee Soneet Kapila (“Trustee”), was part of a conspiracy with Steven Fender to improperly influence and corrupt Judge John K. Olson, the initial Bankruptcy Judge assigned to this bankruptcy case and Related Adversary Proceedings, by having Mr. Bakst’s then law firm, Ruden McClosky, P.A., hire Mr. Fender, Judge Olson’s fiance, as an attorney, and Mr. Bakst having Mr. Fender represent Mr. Bakst in other cases where he served as chapter 7 trustee, so that Judge Olson would rule in favor of the Trustee and approve attorneys’ fees for Mr. Bakst and Ruden McClosky, P.A. See generally Complaint.

3. On May 18, 2011, Defendants filed their Notice of Removal and Removal of Action Under 28 U.S.C. § 1452 By Mi-[150]*150chad Richard Bakst and George Steven Fender [ECF No. 1], by which they removed the State Action to this Court which was assigned Adversary Proceeding No. 11-1999-AJC (the “Removed Action”).

4. On May 18, 2011, Defendants filed their Motion to Dismiss, arguing that (i) the Removed Action should be dismissed given that the Plaintiffs failed to seek leave of this Court pursuant to the Barton doctrine3 before filing the Complaint in State Court, (ii) the purported causes of action do not exist, and (iii) the claims are barred by Florida’s litigation privilege.4 [ECF No. 4].

5. On June 8, 2011, Plaintiffs filed their Initial Response, arguing that (i) this Court lacked subject matter jurisdiction, (ii) Plaintiffs did not need to seek leave of this Court before filing the Complaint because the complained of actions were beyond the scope of Mr. Bakst’s duties as Trustee’s counsel, (iii) the stated causes of action exist, and (iv) Florida’s litigation privilege was inapplicable. [ECF No. 15].

6. Also on June 8, 2011, Plaintiffs filed their Plaintiffs’ Motion for Remand and Abstention of State Court Action. [ECF No. 16].

7. . On July 22, 2011, this Court entered is Order Denying Motion for Remand and Granting Motion for Enlargement of Time to Respond to Motion to Dismiss (“Order Denying Remand/Abstention”) [ECF No. 24]. My Order Denying Remand/Abstention held, in part, as follows:

The ‘ removed action ... assert[s] that Michael Bakst and Steven Fender conspired to influence and corrupt the judiciary in the performance of duties to obtain a favorable ruling for Mr. Bakst’s cliént, Soneet Kapila, thereby causing injury to the Defendants [in the Related Adversary Proceedings]. The allegations in the removed action refer to acts taken by Mr. Bakst while he was attorney for the Trustee, representing the Trustee in the Trustee’s efforts to recover, administer, and protect estate assets. Accordingly, the allegations raised in the removed action clearly “arise in” and “relate to” this bankruptcy case, and are within the exclusive jurisdiction of this Court.

[ECF No. 24 (Order Denying Remand/Abstention) at 2 (Italics added) ].

8. On August 4, 2011, Plaintiffs filed their Initial Supplement, raising the same arguments set forth in their Plaintiffs’ Initial Response, and for the first time requesting, in the alternative, that if this Court were to assert jurisdiction over the Removed Action that the Plaintiffs be granted 'leave to pursue their claims against the Defendants in the State Court. [ECF No. 32, ¶¶ 41-48].

9. Also on August 4, 2011, Plaintiffs filed their Motion for Rehearing of Order Denying Motion for Remand and Abstention. [ECF No. 31].

10. On August 19, 2011, Defendants filed their Reply Memorandum, arguing that the Removed Action was not ripe for adjudication until there is an order reversing judgments the Trustee obtained in the Related Adversary Proceedings, (ii) Plaintiffs cannot state a claim for which relief can be granted, (iii) leave of this Court was required by the Barton doctrine, (iv) leave to prosecute the claims in the Complaint in the State Court should be denied, and (v) [151]*151the claims are barred by Florida’s litigation privilege. [ECF No. 33].

11. On August 19, 2011, the Court entered its Order Denying Motion for Rehearing of Order Denying Motion for Remand and Abstention. [ECF No. 34].

12. On September 1, 2011, Plaintiffs filed their

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Nosek v. Saipan Sea Ventures, Inc.
Northern Mariana Islands, 2017

Cite This Page — Counsel Stack

Bluebook (online)
520 B.R. 147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-v-bakst-in-re-trafford-distributing-center-inc-flsb-2014.