One common issue that can trip up a litigant is the failure to disclose a civil lawsuit in a bankruptcy petition. The lawsuit is an asset of the bankruptcy estate. Failing to disclose the existence of the lawsuit can lead to the dismissal of the civil lawsuit. In Horvath v. Budin, Reisman, Kupferberg & Bernstein, LLP, 2021 N.Y. 30105 (U), the trial court (referred to in New York as the Supreme Court) denied the law firm’s motion to dismiss in just such a case.
After his civil lawsuit was dismissed for failure to include it as an asset of the bankruptcy estate, Horvath sued the law firm for negligence. The summary of the facts indicates that the civil lawsuit was not disclosed until after Horvath’s Chapter 13 plan was confirmed.
In 2009, plaintiff filed a Chapter 13 Petition in the United States Bankruptcy Court for the District of New Jersey (“the Bankruptcy Court”) under Case No. 09-38537-KCF. Doc. 22. Plaintiff was represented in the bankruptcy proceeding by Jules Rossi, Esq. Doc. 22. On September 15, 2010, plaintiff was allegedly injured while he was a passenger in an elevator in a building in Manhattan. Doc. 21 at par. 4. Plaintiff thereafter retained the Law Offices of Michael Lamonsoff (“Lamonsoff”) to commence a personal injury action on his behalf against Gumley Haft Kleier Inc. (“GHK”) and Eltech Industries (“Eltech”). The action against GHK and Eltech was commenced in the Supreme Court, Bronx County in 2010 under Index Number 310013/10 (“the Bronx County action”). Doc. 17 at par. 16. Lamonsoff also represented plaintiff in an unrelated personal injury action commenced in New York County in 2010 under Index Number 115395/10 (“the New York County action”). Doc. 17 at par. 17.