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Gonzales v. City and County of Denver

United States District Court, D. Colorado

February 19, 2014

JOAQUIN GONZALES, Plaintiff,
v.
CITY AND COUNTY OF DENVER, by and through Community Planning and Development, and MICHAEL SIZEMORE, in his personal capacity, Defendants.

ORDER

PHILIP A. BRIMMER, District Judge.

This matter is before the Court on the Recommendation of United States Magistrate Judge (the "Recommendation") [Docket No. 31]. The magistrate judge recommends that the Court grant Defendants' Motion to Dismiss [Docket No. 13] with respect to defendant City and County of Denver, Community Planning and Development (the "City") and deny the motion with respect to defendant Michael Sizemore. On January 23, 2014, Mr. Sizemore filed timely objections [Docket No. 32] to the Recommendation and, on January 27, 2014, plaintiff Joaquin Gonzales filed timely objections to the Recommendation. The Court will "determine de novo any part of the magistrate judge's disposition that has been properly objected to." Fed.R.Civ.P. 72(b)(3).

I. ANALYSIS

The relevant factual history is set forth in the Recommendation and will not be recited here. See Docket No. 31 at 1-3. The magistrate judge recommends that the Court dismiss plaintiff's Title VII claim[1] against the City on the basis that it is precluded by plaintiff's previous state court lawsuit. Docket No. 31 at 5-8. The magistrate judge recommends that the Court deny defendants' motion to dismiss plaintiff's Equal Protection claim[2] against Mr. Sizemore because Mr. Sizemore is not in privity with the City.

A. Notice of Bankruptcy

On February 7, 2014, Mr. Sizemore filed a Notice of Automatic Stay [Docket No. 34] on his own behalf. The notice states, in part:

2. Undersigned counsel recently discovered that Mr. Sizemore filed for Chapter 13 bankruptcy on July 18, 2011. Defendant had moved out of state and previous correspondence to his last known address had not been forwarded until recently.[3]
3. Defendant Sizemore requests a stay of these proceedings. This stay would not affect proceedings against Defendant City and County of Denver.

Docket No. 34 at 1 (internal citation omitted).

The filing of a bankruptcy petition operates as an automatic stay, "applicable to all entities, " of, inter alia, "the commencement or continuation... of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title." 11 U.S.C. § 362(a)(1). In the case of a petition for bankruptcy filed under Chapter 13, the automatic stay bars pre-petition litigation against the debtor until the case is closed, dismissed, or converted to a case under Chapter 7. 11 U.S.C. § 362(c)(2).

Mr. Sizemore filed for bankruptcy on July 18, 2011. See No. 11-27019-HRT, Chapter 13 Voluntary Petition [Docket No. 1] (Bankr. D. Colo. July 18, 2011). Mr. Gonzales filed the case currently before the Court on April 12, 2013. Docket No. 1. Mr. Gonzales' claim against Mr. Sizemore arises under 42 U.S.C. § 1983 and is based on Mr. Sizemore's actions in terminating Mr. Gonzales from his employment on April 15, 2011. See Docket No. 27 at 9, ¶ 40. Mr. Gonzales was not required to exhaust available state remedies before bringing a § 1983 claim against Mr. Sizemore. See Patsy v. Board of Regents of State of Fla., 457 U.S. 496, 516 (1982) ("exhaustion of state administrative remedies should not be required as a prerequisite to bringing an action pursuant to § 1983"). Since this case could have been commenced, with respect to Mr. Sizemore, before the bankruptcy filing, it is subject to the automatic stay until the bankruptcy case is closed, dismissed, or converted to a case under Chapter 7. See 11 U.S.C. § 362(c)(2); No. 11-27019-HRT, Order Modifying Confirmed Chapter 13 Plan [Docket No. 83] (Bankr. D. Colo. Jan 21, 2014).

Mr. Sizemore states that Mr. Gonzales' claim against the City should not be stayed. "As a general proposition, this automatic stay provision of the Bankruptcy Code applies only to bar actions against the debtor and does not extend to solvent codefendants." C.H. Robinson Co. v. Paris & Sons, Inc., 180 F.Supp.2d 1002, 1009-10 (N.D. Iowa 2001) (listing cases). An exception exists in those cases where "there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or finding against the debtor." Id. at 1011 (citing A.H. Robins Co., Inc. v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986)); see also In re Thornburg Mortg., Inc. Sec. Litig., 824 F.Supp.2d 1214, 1279 (D.N.M. 2011) (automatic stay did not apply to securities claim against officers of corporation in bankruptcy proceeding where officers' liability was only one element of debtor's liability); Hounddog Productions, L.L.C. v. Empire Film Grp., Inc., 767 F.Supp.2d 480, 485 (S.D.N.Y. 2011) ("The automatic stay may apply to non-bankrupt defendants only in special circumstances, usually when a claim against the non-debtor will have an immediate adverse economic consequence for the debtor's estate, [citation], or where removing the stay would pose a serious threat to the debtor's reorganization efforts.") (internal citations omitted).

The City and Mr. Sizemore do not share "such identity" that Mr. Sizemore "may be said to be the real party defendant" with respect to plaintiff's claim against the City, such that "a judgment against [the City] will in effect be a judgment or finding against" Mr. Sizemore. See C.H. Robinson Co., 180 F.Supp.2d at 1011. There is no indication that a ruling on plaintiff's claim against the City would "pose a serious threat to [Mr. Sizemore's] reorganization efforts." See Hounddog ...


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