Haley v. Gorell Windows & Doors, LLC (In Re Haley)

Citations: 418 B.R. 432; 22 Fla. L. Weekly Fed. B 119; 2009 Bankr. LEXIS 3460; 2009 WL 3670034Docket: Bankruptcy No. 9:08-bk-20621-ALP. Adversary No. 9:09-ap-00103-ALP

Court: United States Bankruptcy Court, M.D. Florida; June 12, 2009; Us Bankruptcy; United States Bankruptcy Court

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In the Chapter 7 bankruptcy case of Robert and Dawn Haley, the court reviewed a Motion to Dismiss the Plaintiff's Complaint filed by Gorell Windows, Doors, LLC. The Complaint, authored by the Debtors' attorney, Carmen Dellutri, contains five distinct claims against the Defendant, all stemming from a single act. The claims include: 

1. Violation of federal court orders and policy regarding the failure to redact nonpublic information.
2. Violation of Federal Rule of Bankruptcy Procedure 9037 for the same reason.
3. Invasion of privacy.
4. Negligence.
5. Objection to a claim.

The Plaintiff asserts that he holds an account with Gorell primarily for household purchases and that Gorell filed an unsecured Proof of Claim in his Chapter 13 case, amounting to $90,399.00. A key issue is that the documents attached to the Proof of Claim included the Plaintiff's unredacted Social Security number, which he argues exposes him to identity theft risks, necessitating lifelong credit monitoring at $25 per month.

The court noted critical discrepancies in the Plaintiff's claims, particularly that the account in question was actually maintained by Cornerstone Replacement Windows, Inc., a corporation owned by the Plaintiff, and that the Plaintiff was merely a guarantor for the debt, not the primary account holder. This finding undermines the basis of the Plaintiff's claims regarding personal liability and privacy violations.

In Paragraph 20 of the Complaint, the Plaintiff claims that Gorell failed to redact personal data, requiring the Plaintiff’s counsel to file a motion to protect the Plaintiff’s privacy, resulting in unnecessary time and expense for the attorney, the Court, and the Clerk. However, this allegation lacks support in the record, which shows that on May 6, 2009, the Debtors filed an Emergency Motion to Restrict Public Access to Gorell's Proof of Claim, which was denied by the Court on May 13, 2009, due to procedural issues, directing counsel to file a proper motion to redact if desired. The facts surrounding this issue are undisputed, leading to Gorell’s motion challenging the Plaintiff’s Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The Supreme Court has established that a complaint should not be dismissed unless it is clear that the Plaintiff cannot prove any set of facts supporting their claim. Subsequent rulings have refined this standard, emphasizing that allegations must be sufficient to raise a right to relief above mere speculation. The Plaintiff’s First Claim asserts that Gorell’s actions violated court rules by publicly disclosing personal information, thus risking harm to the Plaintiff. The Plaintiff also contends that the Court has inherent authority under 11 U.S.C. § 105 to enforce its rules and prevent abuse of process. However, Section 105 does not create independent claims but facilitates the enforcement of bankruptcy provisions. As such, the Plaintiff’s reliance on Section 105 to support their claim is legally insufficient, warranting dismissal of the First Claim.

In the Second Claim, the Plaintiff alleges that Gorell violated Federal Rules of Bankruptcy Procedure 9037 and Civil Procedure 5.2 by improperly filing nonpublic information, specifically social security numbers, which must be redacted unless ordered otherwise. The Plaintiff argues that this violation supports a claim under 11 U.S.C. § 105, emphasizing the court's authority to enforce its own orders and prevent abuse of process. The court finds the Defendant's Motion to Dismiss this claim persuasive and recommends granting it.

In the Third Claim, the Plaintiff accuses Gorell of invasion of privacy based on the Restatement (Second) of Torts § 652D. The Plaintiff references cases relevant to minors and sexual offense victims, but the court notes that the applicable legal standard requires both that the information publicized is highly offensive to a reasonable person and is not of legitimate public concern. The court concludes that the disclosed information is not highly offensive, failing the first requirement, and thus recommends granting the Motion to Dismiss this claim as well.

In the Fourth Claim, the Plaintiff seeks damages for Gorell's alleged negligence in filing a Proof of Claim that included the Plaintiff's full Social Security number. To succeed on a negligence claim, the Plaintiff must demonstrate the existence of a duty, a breach of that duty, and resulting compensatory damages. The court finds that the Plaintiff has not sufficiently detailed the damages, rendering the claim speculative. Consequently, this claim is also deemed defective and subject to dismissal.

In the Fifth Claim, the Plaintiff alleges multiple issues against the creditor, asserting that the creditor disclosed the Debtor's private information in violation of court rules, requests the Court to order the Chapter 13 Trustee to strike the claim and cancel the debt, seeks sanctions against the creditor, and demands that the claim number be disabled in the PACER system. The claim is flawed for several reasons: 

1. The case is under Chapter 7, and the Court lacks jurisdiction over a Chapter 13 Trustee.
2. The Chapter 7 Trustee cannot remove a properly filed proof of claim.
3. The Plaintiff's request for an injunction against the creditor filing future claims fails to demonstrate a "real and immediate threat" of future injury, lacking the requisite "continuing, present adverse effects" necessary for standing.
4. The request for declaratory relief to cancel the debt improperly seeks to disallow a valid claim, contrary to Section 502 of the Bankruptcy Code, with no allegations of exceptions to disallowance.
5. The request for cancellation of the claim should be pursued through an adversary proceeding under Section 523 and Fed. R. Bankr. P. 7001(6).
6. The claim for disabling the claim number in PACER is moot since the offending document has already been removed.
7. No violation of any court order has occurred, negating any basis for civil contempt against the creditor.

Ultimately, the Court finds that the Plaintiff's claims do not warrant relief, leading to the granting of the Defendant's Motion to Dismiss, resulting in the dismissal of the Complaint and closure of the adversary proceeding.