OGANDO BATISTA et al v. REDONDO CONSTRUCTION

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
IN RE: 	:
:
REDONDO CONSTRUCTION 	: 	CASE NO. 02-02887 (GAC)
CORPORATION, 	:
:
Debtor 	: 	CHAPTER 11
___________________________________:
:
GLODOMIRO OGANDO BATISTA, 	:
CARMEN OGANDO and 	:
conjugal partnership composed :
by them, 	:
:
Plaintiffs 	:
:
v. 	: 	ADV. NO. 05-00093
:
REDONDO CONSTRUCTION 	:
CORPORATION, 	:
:
Defendant 	:
___________________________________:
DECISION AND ORDER
I. Background
The 	controversy 	pending 	before 	this 	Court 	is 	a 	Motion 	to
Dismiss 	(Docket 	#12) 	filed 	by 	debtor, 	Redondo 	Construction
Corporation 	(“Redondo”). 	The 	creditors, 	Glodomiro 	Ogando 	Batista
(“Ogando”), 	Carmen 	Ogando 	and 	their 	conjugal 	partnership
(collectively “Plaintiffs”), filed the instant adversary proceeding
for 	this 	Court 	to 	determine 	whether 	Redondo 	unlawfully 	dismissed
Ogando based on age discrimination pursuant to P.R. Law Ann. tit.
29, § 146 and requesting damages in the amount of $600,000.00.
Plaintiffs 	filed 	the 	instant 	Complaint 	(Docket 	#1) 	on 	April
12, 	2005, 	asserting 	that 	Ogando 	was 	an 	employee 	of 	Redondo 	from
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February 	10, 	1995 	to 	February 	3, 	2002, 	when 	he 	was 	fired.
Plaintiffs 	assert 	that 	Ogando 	was 	74 	years 	old 	and 	that 	he 	was
replaced 	by 	a 	25 	year 	old 	man 	to 	perform 	his 	duties. 	Thus, 	they
contend that Ogando was unlawfully fired based on his age and that
they are entitled to damages pursuant to P.R. Law Ann. tit. 29, §
146. Plaintiffs request that the Court enter judgment for the total
amount of $600,000.00 in damages.
On 	July 	26, 	2005, 	Redondo 	filed 	a 	Motion 	to 	Dismiss 	(Docket
#5), on the grounds that Plaintiffs had already filed two proofs of
claim for the amounts owed. The first proof of claim was filed by
Puerto Rico Department of Labor and the second proof of claim was
filed by Plaintiffs, both for unsecured amounts. Redondo contends
that the present case is a duplicate effort to collect the money.
Therefore, 	Redondo 	requests 	that 	the 	Court 	dismiss 	the 	present
adversary case.
On August 5, 2005, Plaintiffs filed an answer to the motion to
dismiss (Docket #10), denying that this is a duplicate effort, as
Redondo 	contends, 	because 	the 	proofs 	of 	claim 	filed 	were 	for
severance 	pay, 	vacation 	and 	wages. 	Plaintiffs 	assert 	that 	the
present 	adversary 	proceeding 	is 	an 	action 	for 	illegal 	dismissal
based 	on 	age 	discrimination. 	Finally, 	Plaintiffs 	point 	out 	that
Redondo consented to the filing of the present complaint, if it was
filed 	before 	this 	Court. 	Thus, 	Plaintiffs 	request 	that 	the 	Court
deny Redondo’s motion to dismiss.
Finally, on November 18, 2006, Redondo filed a second Motion
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to Dismiss (Docket #12), contending that both proofs of claim were
filed 	after 	the 	bar 	date. 	Redondo 	also 	asserts 	that 	Plaintiffs’
action for age discrimination under P.R. Law Ann. tit. 29, § 146 is
barred 	because 	they 	had 	one 	year 	to 	file 	it 	after 	Ogando 	was
dismissed from his job. Redondo maintains that Ogando was allegedly
fired on February 3, 2002 and Plaintiffs did not file a motion for
relief 	from 	stay 	until 	March 	9, 	2004, 	and 	the 	present 	complaint
until 	April 	12, 	2005. 	Therefore, 	Redondo 	requests 	that 	the 	Court
dismiss the present adversary proceeding with costs and attorney’s
fees.
II. DISCUSSION
The 	case 	before 	this 	Court 	relates 	to 	an 	age discrimination
claim. 	The 	United 	States 	Code 	provide 	that 	“the 	district 	court
shall 	have 	original 	but 	not 	exclusive 	jurisdiction 	of 	all 	civil
proceedings 	arising 	under 	title 	11, 	or 	arising 	in 	or 	related 	to
cases under title 11.” 28 U.S.C. § 1334(b).
The 	Judicial 	Code 	differentiates 	between 	core 	and 	non-core
proceedings. 	The 	Judicial 	Code 	includes 	a 	non-exhaustive 	list 	of
core proceedings. See 28 U.S.C. § 157(b)(2). When a creditor files
a 	proof 	of 	claim 	voluntarily, 	he 	consents 	to 	core-jurisdiction
pursuant to 28 U.S.C. § 157(b)(2)(O). Langenkamp v. Culp, 498 U.S.
42 	(1990). 	Nonetheless, 	a 	bankruptcy 	court 	may 	not 	hear 	and
determine 	a 	personal 	injury 	tort 	claim. 	See 	28 	U.S.C. 	§
157(b)(2)(O).
Section § 157(b)(2)(O) of the United Stated Code provides, in
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relevant 	part, 	that 	a 	bankruptcy 	court 	may 	hear 	and 	determine
“proceedings 	affecting 	... 	the 	adjustment 	of 	the 	debtor-creditor
... 	relationship, 	except 	personal 	injury 	tort 	or 	wrongful 	death
claims.” 	28 U.S.C. § 157(b)(2)(O). Thus, pursuant to 28 U.S.C. §
157(b)(5), “[t]he district court shall order that personal injury
tort... 	claims 	shall 	be 	tried 	in 	the 	district 	court 	in 	which 	the
bankruptcy 	case 	is 	pending...” 	Moreover, 	pursuant 	to 	28 	U.S.C. 	§
157(b)(2)(B), 	the 	liquidation 	of 	a 	contingent 	or 	unliquidated
personal 	injury 	tort 	claim 	against 	the 	estate 	for 	purposes 	of
distribution, is a non-core proceeding.
There 	are 	two 	interpretations 	of 	what 	is 	a 	personal 	injury
tort. 	There 	are 	courts 	that 	limit 	personal 	injury 	tort 	claims 	to
those involving only bodily injury. Those courts hold that a tort
without 	trauma 	or 	bodily 	injury 	is 	not 	within 	the 	statutory
exception for a “personal injury tort claim” under Section 157(b).
See In re Atron, Inc. of Michigan, 172 B.R, 541 (Bankr. W.D.Mich.
1994) 	and 	Perino 	v. 	Cohen 	(In 	re 	Cohen), 	107 	B.R. 	453 	(S.D.N.Y.
1993). 	This 	“narrower” 	approach 	puts 	too 	much 	emphasis 	on 	a
technical 	analysis 	of 	allegations 	of 	a 	complaint, 	often 	drafted
before bankruptcy and before the “personal injury tort claim” issue
even 	existed. 	Stranz 	v. 	Ice 	Cream 	Liquidation, 	Inc. 	(In 	re 	Ice
Cream Liquidation, Inc.), 281 B.R. 154, 161 (Bankr. D.Conn. 2002).
The 	majority 	of 	courts 	interpret 	the 	term 	more 	broadly 	to
include civil rights actions. See In re Sanjari, 2006 WL 1233928,
3 (Bankr. D.Mass. 2006) and Stranz v. Ice Cream Liquidation, Inc.
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(In 	re 	Ice 	Cream 	Liquidation, 	Inc.), 	281 	B.R. 	154, 	161 	(Bankr.
D.Conn. 2002). In In re Ice Cream Liquidation, Inc., the court held
that claims alleging that a debtor illegally discriminated against
an 	employee 	on 	the 	basis 	of 	race, 	creed, 	disability 	or 	sex 	are
personal injury tort claims. Stranz v. Ice Cream Liquidation, Inc.
(In re Ice Cream Liquidation, Inc.), 281 B.R. at 161. Likewise, in
In 	re 	Erickson, 	330 	B.R. 	346, 	349 	(Bankr. 	D.Conn. 	2005), 	an
adversary proceeding was filed by a former employee seeking relief
from 	the 	automatic 	say 	to 	litigate 	her 	employment 	discrimination
claim 	against 	the 	Chapter 	7 	debtor 	in 	the 	state 	court 	forum. 	The
court 	relying 	on 	In 	re 	Ice 	Cream 	Liquidation, 	Inc., 	held 	that 	it
lacked subject matter jurisdiction to adjudicate the discrimination
claim. 	In 	re 	Erickson, 	330 	B.R. 	at 	349. 	Thus, 	the 	court 	granted
the 	relief 	from 	stay 	so 	that 	the 	former 	employee 	could 	liquidate
her claim in the state court. Id. at 350.
This Court is persuaded to adopt the broader approach, finding
that age discrimination claims are personal injury torts that are
to 	be 	tried 	outside 	the 	bankruptcy 	court. 	Thus, 	this 	Court
concludes 	that 	it 	does 	not 	have 	subject 	matter 	jurisdiction
pursuant to 28 U.S.C. § 157. Consequently, this adversary will be
certified to the district court pursuant to 28 U.S.C. § 157(b)(5).
In that forum, Redondo may renew its motion to dismiss.
In 	relation 	to 	the 	other 	contentions 	made 	by 	Redondo,
regarding 	the 	bar 	date 	for 	the 	filing 	of 	proofs 	of 	claim, 	those
issues are properly determined in the legal case.
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ORDER
WHEREFORE IT IS ORDERED that this Court has no subject matter
jurisdiction 	over the present adversary proceeding. Thus, it will
be certified to the District Court.
SO ORDERED.
San Juan, Puerto Rico, this 29th day of June, 2006.
S/Gerardo A. Carlo-Altieri
____________________________
GERARDO A. CARLO-ALTIERI
Chief, U.S. Bankruptcy Judge
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