Plaintiff Mohamed Kotbi brings this action against defendant Hilton Worldwide, Inc., doing business as Waldorf-Astoria Hotel, ("Hilton") for workplace discrimination.
Defendant now moves to dismiss the case pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff apparently filed a voluntary petition for bankruptcy but did not disclose this claim in his bankruptcy proceedings. Accordingly, defendant claims that plaintiff lacks standing and is barred by judicial estoppel. Defendant also seeks sanctions, in the form of attorneys' fees and costs. Plaintiff seeks to substitute the bankruptcy estate as plaintiff in this case.
The court denies defendant's motion to dismiss the case. The court grants plaintiff's request to substitute plaintiff's bankruptcy estate as plaintiff. The court denies defendant's request for sanctions.
Plaintiff was and still is a banquet waiter at the Waldorf-Astoria Hotel. He has been employed there since 1984. Plaintiff alleges that he has been constantly harassed and subjected to a hostile work environment since September 11, 2001, due to his race, religion, and national origin. Plaintiff's race is Arab, his religion is Muslim, and his national origin is Moroccan.
In 2005, plaintiff filed a Charge of Discrimination against defendant with the Equal Employment Opportunity Commission (the "EEOC"). The charge ended with a non-monetary agreement by the defendant to properly adhere to anti-discrimination laws and to protect plaintiff from harassment.
However, the agreement apparently did not last. In November 2009, plaintiff filed a second Charge of Discrimination against defendant with the EEOC, mirroring the first charge filed in 2005 and complaining about the same defendant and the same harassers. Plaintiff's second Charge of Discrimination advanced identical claims of discrimination and harassment to those asserted in the present case. In or around August 2010, plaintiff and his attorney, Jonathan Bell, Esq., requested a right to sue letter from the EEOC. Plaintiff represents that the EEOC asked that he withdraw his request because the EEOC had a particular interest in his case.
On August 31, 2010, plaintiff, through an attorney,*fn1
filed a voluntary petition for bankruptcy in the United
States Bankruptcy Court for the
Southern District of New York. In that petition, plaintiff was asked
to disclose "[c]ontingent claims and unliquidated claims of every
nature, including tax refunds, counterclaims of the debtor and rights
to setoff claims." In response, plaintiff indicated that there were no
such claims by marking an "X" in the appropriate column. At a hearing
before the bankruptcy court on September 28, 2010, plaintiff testified
that he had no right to sue anyone for any reason. On or around
February 10, 2011, plaintiff's debts were discharged by the bankruptcy
On February 17, 2011, the EEOC issued a right to sue letter, apparently in response to a second request from plaintiff. On March 11, 2011, plaintiff's attorney wrote to defendant demanding $6 million to settle plaintiff's claims. Plaintiff then filed the complaint in the present case on April 28, 2011.
Defendant claims that plaintiff withheld the existence of his discrimination claims from the bankruptcy court in an attempt to defraud his creditors and the federal court system. Plaintiff denies any intent to defraud. He claims that he did not disclose the existence of the EEOC case because he believed that it had no economic value; he claims that he hoped for and contemplated the same result that ended his 2005 charge, i.e., an end to the harassment. Defendant believes that plaintiff's claims in this regard are self-serving, disingenuous, and preposterous. Defendant questions how plaintiff could have failed to see any relationship between his bankruptcy estate and his discrimination claim given the overlapping timelines of the two proceedings. Defendant also questions plaintiff's belief that his discrimination claim had no value given the letter from plaintiff's attorney, issued approximately one month after the discharge of plaintiff's bankruptcy estate, demanding $6 million to settle plaintiff's claims.
The trustee of plaintiff's bankruptcy estate, Robert L. Geltzer, has begun the process of reopening the bankruptcy estate in light of this lawsuit. Plaintiff's attorney has been appointed as special litigation counsel to the bankruptcy estate for this case, and the bankruptcy court has ordered plaintiff's attorney to file a motion to substitute the bankruptcy estate in this action. As noted above, plaintiff so moved in his reply to defendant's motion to dismiss the case.
As noted above, defendant moves to dismiss plaintiff's complaint on two grounds: that plaintiff lacks standing and that the doctrine of judicial estoppel applies to bar his case. Defendant also asserts that sanctions are appropriate due to what defendant believes was plaintiff's bad faith in attempting to hide this case from his creditors.
Plaintiff concedes that he does not have standing under Fed. R. Civ. P. 12(b)(1). He moves to substitute the trustee of plaintiff's bankruptcy estate as plaintiff in the present case. Plaintiff asserts ...