A
AmateurShyster
Guest
What is the name of your state? MA
I filed suit a month ago in small claims court under 47 USC sec 227(b)(1)(c) to collect damages from a junk faxer who just recently filed for bankruptcy under ch. 11. I named a second corporate defendant, who is not in bankruptcy. My small claims action is scheduled for hearing in about two months.
What effect does the automatic stay (11 USC sec 362(a)) have on my small claims action, and what can I do to pursue my claim?
I've already done a little bit of research -- enough to know that there are enough complications here to make for a good law school exam question. Suit under the private right of action conferred by the junk fax law has to be brought in *state* court. So I suppose I could file a motion under 28 USC sec 1334(c)(2) asking the bankruptcy court to abstain. But, is this really a motion under 11 USC 362(d) for relief from the automatic stay? And what do I do with a judgment if I win later? File a proof of claim? What if the bankruptcy case is over by then? Since the claim is in the nature of a fine, is it entitled to any sort of priority when finally reduced to judgment?
The filing fee for a motion for relief from the automatic stay is pretty hefty -- $75 in my district. It looks like I would have to serve every listed creditor with a copy of this motion, which would be burdensome to say the least. Can I recover these costs from the defendant if I win in small claims court?
Or should I be looking at filing an "adversary proceeding" complaint in the bankruptcy court? The fee is even higher ($150), but I wouldn't have to serve every creditor. The problem is, a federal court would not normally have subject matter jurisdiction because of the way the junk fax law is worded. Would the second defendant need to be joined in the adversary proceeding? What procedure would I use to discontinue the state court action without prejudice in this scenario?
To make this even more complex, I received another junk fax from the same two defendants after I filed my small claims action but before the bankruptcy. I want to pursue a claim about that, too.
Finally, the bankrupt defendant filed a countersuit (which I believe was bogus and actionable under theories of malicious prosecution or abuse of process) in his own small claims court. That was heard and dismissed voluntarily the same day as the bankruptcy filing. Is the dismissal effective given the automatic stay? How would I pursue a claim for malicious prosecution or abuse of process? It's possibly relevant that, under Massachusetts law, a claim for malicious prosecution in a civil matter requires that the action complained of terminate with a finding in favor of the party who's complaining. Thus, you could argue that my cause of action didn't accrue until *after* the bankruptcy filing (about an hour and a half, in fact), when the debtor voluntarily dismissed it, and therefore falls outside the automatic stay in the first place.
I filed suit a month ago in small claims court under 47 USC sec 227(b)(1)(c) to collect damages from a junk faxer who just recently filed for bankruptcy under ch. 11. I named a second corporate defendant, who is not in bankruptcy. My small claims action is scheduled for hearing in about two months.
What effect does the automatic stay (11 USC sec 362(a)) have on my small claims action, and what can I do to pursue my claim?
I've already done a little bit of research -- enough to know that there are enough complications here to make for a good law school exam question. Suit under the private right of action conferred by the junk fax law has to be brought in *state* court. So I suppose I could file a motion under 28 USC sec 1334(c)(2) asking the bankruptcy court to abstain. But, is this really a motion under 11 USC 362(d) for relief from the automatic stay? And what do I do with a judgment if I win later? File a proof of claim? What if the bankruptcy case is over by then? Since the claim is in the nature of a fine, is it entitled to any sort of priority when finally reduced to judgment?
The filing fee for a motion for relief from the automatic stay is pretty hefty -- $75 in my district. It looks like I would have to serve every listed creditor with a copy of this motion, which would be burdensome to say the least. Can I recover these costs from the defendant if I win in small claims court?
Or should I be looking at filing an "adversary proceeding" complaint in the bankruptcy court? The fee is even higher ($150), but I wouldn't have to serve every creditor. The problem is, a federal court would not normally have subject matter jurisdiction because of the way the junk fax law is worded. Would the second defendant need to be joined in the adversary proceeding? What procedure would I use to discontinue the state court action without prejudice in this scenario?
To make this even more complex, I received another junk fax from the same two defendants after I filed my small claims action but before the bankruptcy. I want to pursue a claim about that, too.
Finally, the bankrupt defendant filed a countersuit (which I believe was bogus and actionable under theories of malicious prosecution or abuse of process) in his own small claims court. That was heard and dismissed voluntarily the same day as the bankruptcy filing. Is the dismissal effective given the automatic stay? How would I pursue a claim for malicious prosecution or abuse of process? It's possibly relevant that, under Massachusetts law, a claim for malicious prosecution in a civil matter requires that the action complained of terminate with a finding in favor of the party who's complaining. Thus, you could argue that my cause of action didn't accrue until *after* the bankruptcy filing (about an hour and a half, in fact), when the debtor voluntarily dismissed it, and therefore falls outside the automatic stay in the first place.