United States District Court, S.D. New York
OPINION AND ORDER
L. CARTER, JR., UNITED STATES DISTRICT JUDGE
Jamie Montoya brings this personal injury action against
Defendants Daniel O'ConnelFs Sons, Inc. ("DOC")
and Marist College for injuries allegedly suffered while
working for DOC's subcontractor, Third-Party Defendant
Jupiter Environmental Services, Inc. ("Jupiter"),
on a construction project at Marist College. DOC and Marist
College have moved for summary judgment dismissing
Montoya's claims on the basis that he lacks standing and
is estopped from pursuing this action due to his failure to
disclose the suit during his bankruptcy proceeding. Jupiter
also moved for summary judgment on the basis of estoppel.
Separately, Montoya filed a motion to substitute the
bankruptcy trustee, John W. Sywilok, as the plaintiff in this
action. For the reasons that follow, the Court grants
Montoya's motion to substitute Sywilok as plaintiff,
thereby rendering Defendants' motions for summary
judgment on the basis of Montoya's lack of standing and
March 27, 2013, Montoya injured himself while working on a
construction project at Marist College as an employee of
Jupiter, a subcontractor of DOC. ECF No. 19 ("Am.
Compl."), at ¶¶ 36-40. He did not commence
this personal injury action related to the accident until
March 2015, however. In the interim, Montoya filed a petition
for voluntary bankruptcy pursuant to Chapter 7 of the
Bankruptcy Code in the United States Bankruptcy Court for the
District of New Jersey. ECF No. 106 (Affirmation of Carolyn
Comparato ("Comparato Aff.")), Ex. A (Voluntary
Petition, filed Apr. 7, 2014). Montoya is represented by
different counsel in this action than in his bankruptcy
proceeding. See id., Ex. A at 2.
Montoya already had injured himself and retained counsel to
explore the possibility of recovering in a personal injury
action, Montoya did not disclose the potential personal
injury action as personal property in his bankruptcy
petition. Id. at 9-11; ECF No. 102 (Affirmation of
Hillary P. Kahan ("Kahan Aff.")), Ex. F at 10-11.
He did disclose his related Worker's Compensation Board
claim against Jupiter, however. Comparato Aff., Ex. A at 11.
At a meeting of his creditors in May 2014, Montoya again
failed to disclose his potential personal injury action.
Comparato Aff., Ex. B (Transcript of May 12, 2014 Hearing),
at 9-10. In July 2014, the bankruptcy court granted Montoya a
discharge under 11 U.S.C. § 727. Kahan Aff. Ex. B
(Discharge Order, dated July 18, 2014).
than a year after his bankruptcy discharge, Montoya filed the
instant action against DOC and Marist College on March 4,
2015. See ECF No. 1. DOC and Marist College answered
the Complaint and DOC filed a third-party complaint against
Jupiter. ECF Nos. 20, 22, 24. Defendants then filed motions
for summary judgment. After learning of Defendants'
proposed motions, Montoya's counsel in this action
contacted John W. Sywilok, Montoya's bankruptcy trustee
(the "Trustee"), who then initiated proceedings to
reopen Montoya's bankruptcy. Kahan Aff. ¶ 6, Ex. D
(Motion to Reopen, dated Dec. 8, 2015). The bankruptcy court
reopened Montoya's case in January 2016 and appointed
Montoya's counsel in this action to serve as special
counsel to the Trustee in this action as well. Id.
¶¶ 7-9, Exs. E-G. In his opposition to
Defendants' motions for summary judgment, Montoya argued
that the Trustee should be substituted as plaintiff in his
place. ECF No. 64 at 18-19. The Court dismissed
Defendants' motions without prejudice in light of
Montoya's desire to substitute the Trustee as plaintiff
so that the two issues could be briefed together. ECF No. 82.
Marist College have again moved for summary judgment
dismissing Montoya's claims on the basis that he lacks
standing because this action is property of the bankruptcy
estate. ECF Nos. 86-89, 90-92. They further argue that
Montoya is estopped from pursuing this action as a result of
his failure to disclose the suit in his bankruptcy
proceeding. Jupiter also moved for summary judgment on the
basis of estoppel. ECF Nos. 94-95, 97.
the parties briefed Montoya's motion to substitute the
Trustee as plaintiff in this action. ECF Nos. 101 (Motion to
Substitute), 102 (Kahan Aff), 103 (Affirmation of John W.
Sywilok), 104 (Pi's Memo.). DOC and Marist College
opposed the motion, arguing that the substitution is untimely
and that this action was improperly instituted in violation
of the automatic stay in the bankruptcy court. ECF Nos. 106
(Comparato Aff), 107 (DOC Memo.), 116 (Affirmation of Keith
S. Grover). Jupiter also opposed the motion on the basis that
the Trustee cannot serve as plaintiff because he is a witness
to Montoya's alleged fraud on the bankruptcy court. ECF
No. 115 (Jupiter Memo.). Montoya has submitted his reply in
support of his motion to substitute, and the Court considers
the motions fully briefed. ECF Nos. 126 (Pi's Reply), 128
(Declaration of Hillary P. Kahan ("Kahan Reply
of the Federal Rules of Civil Procedure requires that actions
"be prosecuted in the name of the real party in
interest." Fed.R.Civ.P. 17(a)(1). If an action is
brought by a party other than the real party in interest, the
Rule prohibits a court from dismissing the action on that
basis "until, after an objection, a reasonable time has
been allowed for the real party in interest to ratify, join,
or be substituted into the action." Fed.R.Civ.P.
17(a)(3). The decision to substitute a party is committed to
the discretion of the district court and "should be
liberally allowed when the change is merely formal and in no
way alters the original complaint's factual allegations
as to the events or the participants." Advanced
Magnetics, Inc. v. Bayfront Partners Inc., 106 F.3d 11,
20 (2d Cir. 1997). Once the real party in interest is
substituted, the "action proceeds as if it had been
originally commenced by the real party in interest."
commencement of bankruptcy proceedings, "all legal or
equitable interests of the debtor" comprise the
bankruptcy estate. 11 U.S.C. § 541(a)(1). Pursuant to
§ 323 of the Bankruptcy Code, the bankruptcy trustee is
assigned as the "representative of the estate" and
has the "capacity to sue and be sued." Thus, after
a plaintiff initiates a bankruptcy proceeding, the bankruptcy
trustee becomes the real party in interest of the
debtor-plaintiffs legal interests. In re Jackson,
593 F.3d 171, 176 (2d Cir. 2010) (interests of bankruptcy
estate "include causes of action possessed by the debtor
at the time of filing").
moves to substitute the Trustee, John Sywilok, as plaintiff
in this action. The parties do not dispute that the Trustee
is the real party in interest; however, DOC and Marist
College argue that Montoya's motion should be denied
because any substitution would be untimely and a nullity.
Jupiter further argues that, to the extent the Court grants
the motion to substitute, Montoya should be prevented from
recovering personally. The Court finds that substituting the
Trustee as plaintiff is appropriate and the question of
damages is premature.