United States District Court, S.D. New York
LAURA TAYLOR SWAIN, District Judge.
In this action, Plaintiffs Andre Grammer ("Grammer") and Burnell Guyton ("Guyton") asserted claims of racial discrimination, hostile work environment and retaliation against Defendants Mercedes Benz of Manhattan/Mercedes Benz USA, LLC (their former employer) ("Mercedes") and individual Defendants Blair Creed ("Creed") and Myra Conzo ("Conzo") (collectively, "Defendants"), pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000(e), et seq.; 42 U.S.C. § 1981; and the New York State Human Rights Law, New York Executive Law §§ 290 et seq. On November 4, 2013, the Court endorsed Plaintiff Guyton's voluntary stipulation of dismissal with prejudice, leaving only Plaintiff Grammer. The Court has jurisdiction of this action pursuant to 28 U.S.C. §§ 1331 and 1367.
Currently pending before the Court are two motions. Defendants move to dismiss all claims asserted by Grammer, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), due to Grammer's lack of standing to litigate contingent claims that were not disclosed as assets in his Chapter 7 bankruptcy petition or, in the alternative, for summary judgment. Defendants also request that the Court impose sanctions against Plaintiff Grammer, including reasonable attorneys' fees and costs, in an amount to be determined by the Court. Plaintiff Grammer has filed a cross-motion to amend his amended complaint, pursuant to Federal Rules of Civil Procedure 15, 17 and 21, to substitute the Trustee of his Chapter 7 bankruptcy estate (the "Trustee") for himself as plaintiff as the real party in interest. Because these motions are interrelated, the Court considers them together. For the following reasons, the Court grants Defendants' motion to dismiss and grants Grammer's motion to amend.
On May 16, 2011, Grammer completed an Intake Questionnaire ("Questionnaire") with the Equal Opportunity Employment Commission ("EEOC"), alleging that he had been terminated from his job at Mercedes on April 1, 2011, in retaliation for having complained about racial discrimination and harassment. (Am. Compl. ¶ 13; Quesnel Aff., Ex G.) On August 5, 2011, Grammer received a letter with a copy of his Charge of Discrimination (the "Charge"), which informed him that the Questionnaire "constituted a charge of employment discrimination, " but that before the EEOC began to investigate the Charge, Plaintiff had to "sign and return the enclosed Form." (See Quesnel Aff., Ex. H.) On August 30, 2011, the EEOC received the formal version of Grammer's Charge. ( Id., Ex. I.)
Meanwhile, on August 1, 2011, Grammer filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Georgia. (See Aron Decl., Ex. 1B.) The petition listed $127, 247.00 in unsecured claims and included a Schedule B of Personal Property, in which Grammer, under penalty of perjury, was required to list "all personal property of the debtor of whatever kind." ( Id., Ex. 1B, pgs. 23-25, 33.) Grammer included cash, home furnishings, clothing, jewelry, two automobiles and an estimate of the current value of each item on this list. (Id.) However, Grammer did not disclose any contingent claims against Mercedes or any of its employees as an asset of the bankruptcy estate and he did not list his pending EEOC Charge in response to the petition's requirement that he list "[o]ther contingent and unliquidated claims of every nature" and provide the "estimated value of each." ( Id., Ex. 1B, pg. 24.) On November 22, 2011, the U.S. Bankruptcy Court for the Northern District of Georgia-without having been informed of any contingent claim or of the pendency of Grammer's EEOC administrative proceeding - entered an order discharging Grammer's debts and closing the proceeding.
Plaintiff testified that he did not report any potential claims in his Chapter 7 proceeding because he believed that the EEOC was in the process of investigating whether he had any legitimate, reportable cause of action against Defendants and that the EEOC would so inform him if it believed that he did have a claim. (Aron Decl., Ex. 2, Grammar Dep. 262-64, 277.)
On January 2, 2012, Grammer filed a second voluntary Chapter 13 bankruptcy petition. (Aron Decl., Ex. 6.) Again, Grammer did not list any contingent claim against Mercedes or against any Defendant in his petition and did not list his pending EEOC administrative proceeding against Mercedes. (Aron Decl, Exhibit 1B.) On June 4, 2012, Plaintiff Grammer received a Notice of Right to Sue letter from the EEOC, informing him that the EEOC was terminating its processing of his charge and that he was entitled to file suit in federal or state court. (See Am. Compl., Ex. B.)
Grammer sued Defendants in this Court on August 6, 2012, alleging that he had suffered race discrimination, hostile work environment, harassment and retaliation while working for Mercedes. The parties began discovery and, on December 18, 2012, Defendants requested that Grammer produce "all documents concerning any lawsuits or administrative actions" filed by Plaintiff or in which Plaintiff participated as a party or witness. (See Def. Mem. in Support of Motion, at 7; Aron Decl., Ex. 1C.) This was followed by other similar requests in February and April to which Grammar did not respond. ( Id., Exs. 1D, 1E.) On April 19, 2013, Grammer objected to the Defendants' discovery request for "production of other lawsuits, actions, [or] witness in other proceedings involving Plaintiffs, " contending that those documents had no relevance to this litigation. ( Id., Ex. 1E.)
On April 11, 2013, Grammer filed an Amended Schedule B list of assets in his pending Chapter 13 bankruptcy proceeding, listing "EEOC Claim v. Mercedes Benz Corporation" in the section for "[o]ther contingent and unliquidated claims of every nature." (Id. Ex. 7.) However, Grammer did not inform the Defendants in this case until August 21, 2013, during his deposition, of his various bankruptcy proceedings and that he had not disclosed the existence of a contingent claim against Defendants in any of those proceedings before April 2013. Upon learning of Plaintiff Grammer's pending bankruptcy proceeding, Defendants applied to this Court, asking that the instant case be stayed until the resolution of Grammer's Chapter 7 bankruptcy case, which the bankruptcy court was considering reopening. (See docket entry no. 31.) On September 6, 2013, the Court stayed this action for 45 days "or, if earlier, the date 5 days after the Bankruptcy Court's ruling on the motion to reopen." (See docket entry no. 29.)
On September 9, 2013, the Bankruptcy Court in Atlanta, Georgia reopened Grammer's Chapter 7 bankruptcy case. (See Quesnel Aff, Ex. B.) On September 13, 2013, M. Denise Dotson (the "Trustee") was appointed Trustee of the Chapter 7 case. ( Id., Ex. C.) On October 10, 2013, Grammer filed an Amended Schedule B with the Bankruptcy Court, identifying his prior complaint to the EEOC and this lawsuit for the first time with specificity, writing: "EEOC claim and Lawsuit: Andre Grammer vs. Mercedes Benz Manhattan et al., filed in Distsrict [sic] Court of New York, Civil Case No. 12-cv-6005(LTS/JCF) filed September 18, 2012 Debtor reserves the right to amend his exemption at such time as the asset' [sic] true value is determined." ( Id., Ex. D.) On October 29, 2013, Girvin & Ferlazzo, P.C. (Grammer's counsel in this case) were appointed as special counsel for the Chapter 7 bankruptcy proceeding. ( Id., Ex F.)
Defendants' Motion to Dismiss
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id . However, "detailed factual allegations" are not necessary; the complaint need only "give the defendant fair notice of what the... claim is and the grounds upon which it rests.'" Twombly , 550 U.S. at 555 (internal quotation marks and citations omitted). The court ...