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

Citations: 418 B.R. 467; 22 Fla. L. Weekly Fed. B 121; 2009 Bankr. LEXIS 3459; 2009 WL 3669872Docket: Bankruptcy No. 9:08-bk-20621-ALP. Adversary No. 9:09-ap-00103-ALP

Court: United States Bankruptcy Court, M.D. Florida; August 13, 2009; Us Bankruptcy; United States Bankruptcy Court

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In the case of In re Robert Haley and Dawn Haley, the United States Bankruptcy Court for the Middle District of Florida is addressing multiple motions related to sanctions. Robert Haley, the Plaintiff, filed an adversary proceeding against Gorell Windows, Doors, LLC, seeking injunctive relief and damages under various sections of the Bankruptcy Code and Federal Rules of Bankruptcy Procedure. The key issues stem from Gorell's alleged failure to redact the last four digits of Haley's social security number in its proof of claim, which Haley claims violates Rule 9037 and has caused him damages by making his personal information public.

In his Complaint, Haley outlines several counts: 

1. **Count I** asserts Gorell's failure to redact sensitive information and seeks injunctive relief for abuse of process.
2. **Count II** alleges that Gorell's actions breach Rule 9037(a)(1) and (2), potentially leading to contempt.
3. **Count III** claims that Gorell interfered with his privacy by disclosing personal information, leading to mental anguish and distress.

Haley seeks actual damages, punitive damages, legal fees, and compensation for the invasion of privacy under Florida law due to Gorell's alleged reckless and malicious conduct. The matter includes the consideration of sanctions against both parties, highlighting the contentious nature of the litigation.

Count IV of the Complaint alleges negligence by the Defendant, claiming a duty of care was owed to the Plaintiff, which was breached through the publication of the Debtor's nonpublic personal information, resulting in actual damages to the Debtor. In Count V, the Debtor sought injunctive relief to disable the Defendant’s Proof of Claim in the PACER system and to prevent the filing of any amended claims in the Chapter 7 case. The Defendant, Gorell, filed a Motion to Dismiss, which was granted by the Court on June 12, 2009, with the Complaint dismissed with prejudice. The Court found that the Plaintiff did not plead an indispensable element for an injunction and that the request for declaratory relief lacked required substantiation under Section 502 of the Bankruptcy Code. Following the dismissal, Gorell filed a Motion for Sanctions against the Debtor's attorney, citing the Plaintiff's failure to withdraw claims despite the notice of the Motion for Sanctions. The Plaintiff did not respond within the 21-day period mandated by Rule 9011 of the Federal Rules of Bankruptcy Procedure. On July 1, 2009, the Plaintiff filed a Response and Counter-Motion for Sanctions, arguing that the Defendant's claims about the necessity to withdraw were unfounded, referencing supportive case law. The Court, while acknowledging some basis for the Plaintiff's claims, ultimately decided against imposing sanctions on the Debtor's counsel, recognizing that other courts had previously denied similar motions to dismiss.

The Court has concluded that there are no grounds to impose sanctions against the Defendant's counsel, as the attorney had sufficient knowledge that the Complaint was supported by relevant facts and case law. Both Motions for Sanctions have been reviewed and denied. Regarding the Plaintiff's Motion for Reconsideration related to the Defendant's Motion to Strike the Plaintiff's Supplemental Response, the Court noted that while the motion to strike was based on a local rule, this rule does not apply to bankruptcy courts. As the case has already been dismissed, the Motion for Reconsideration is deemed moot and therefore unnecessary. Consequently, the Court has decreed the denial of the Defendant's Motion for Sanctions, the Plaintiff's Counter-Motion for Sanctions, and the Plaintiff's Motion for Reconsideration.