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Rothberg v. Quadrangle Development Corp.


July 28, 1994


Appeal from the Superior Court of the District of Columbia; (Hon. Colleen Kollar-Kotelly, Motions Judge), (Hon. Gladys Kessler, Motions Judge)

Before Ferren, and Steadman, Associate Judges, and Kern, Senior Judge.

The opinion of the court was delivered by: Steadman

STEADMAN, Associate Judge: This is an appeal *fn1 from the trial court's dismissal with prejudice of appellant's amended complaint following the failure to timely file a proper Super. Ct. Civ. R. 24(c) pleading in intervention, in accordance with the trial court's previous order which had specifically warned that such a dismissal would be the consequence of a failure to comply. We affirm.


Appellant filed his initial complaint in this civil action against the appellees on October 5, 1990, and an amended complaint on October 31, 1990. *fn2 A series of discovery actions ensued, marked by appellant's continual intransigence. Although the trial court denied appellees' motion to dismiss on that basis on October 1, 1991, the court stated that " views [appellant's] excuses for non-compliance as insufficient and somewhat disingenuous. . . . The Court will consider appropriate sanctions if the documents are not produced forthwith."

Although appellant had made no mention of the fact in either complaint, it turned out that in December 1989, appellant had filed for chapter 11 bankruptcy protection and a trustee in bankruptcy, John Guinee, was appointed on October 29, 1990. Accordingly, in a further order on October 1, 1991, the trial court granted appellees' unopposed motion to dismiss on the basis that the trustee in bankruptcy and not appellant was the real party in interest under Super. Ct. Civ. R. 17(a).

Appellant and the trustee thereupon filed a joint motion to vacate the October 1, 1991 order of dismissal. On January 31, 1992, the trial court entered an order holding this motion in abeyance and requiring the trustee to file a pleading, pursuant to Super. Ct. Civ. R. 24(c), describing its claims of intervention, and to notify the court of its intention to intervene by February 14, 1992 or the court's earlier order of dismissal would stand. *fn3

In response, the trustee on February 28, 1992, filed a "Motion to Intervene and Statement" pursuant to Super. Ct. Civ. R. 24(c) purporting to comply with the court's January 31, 1992 order. On May 7, 1992, the trial court reinstated the civil action as to all defendants except Luther H. Hodges, Jr. and Harold Gordon *fn4 and granted the trustee's motion to intervene conditionally. The trial court found that the trustee's statement of February 28, 1992 regarding which claims he intended to pursue was not a "pleading" under Rule 24(c), *fn5 and therefore made the grant of the motion to intervene expressly contingent upon the filing of a proper 24(c) pleading. Most importantly, the court ordered that the proper 24(c) pleading "must be filed on or before 4:00 p.m., May 22, 1992 or the case will be dismissed with prejudice as to all defendants."

In addition, because the trustee had not complied with the $500 sanction imposed in the October 1, 1991 order, see note 3, (supra) , the court again ordered the trustee to pay the sanction on or before July 10, 1992 or judgment would be entered against him. The court further warned that "if the Trustee at some future point in time abandons the claims - then , with or without counsel, must proceed without any delay whatsoever. There will be no further extensions of any kind." The court also imposed another $500 sanction payable by June 12, 1992, for "[appellant's] flagrant disregard for discovery deadlines" and the necessity of two motions to dismiss to compel compliance. *fn6 The trial court cautioned that "this case has been plagued with a lack of prosecution and subsequent last minute efforts to move forward when pushed to do so by the defendants. As previously indicated, no further delays will be tolerated and any lack of prosecution will result in dismissal with prejudice as to all remaining defendants."

Nonetheless, the trustee failed to file the 24(c) pleading by the court-imposed deadline. On June 22, 1992, the trial court denied appellant's motion to file the 24(c) proposed pleading out of time based on the record in this case and the very explicit orders of the trial court. *fn7 The trial court noted that "there had been 'flagrant disregard for discovery deadlines,' imposition of sanctions, lack of prosecution by the plaintiff, and 'last minute efforts to move forward when pushed to do so by the defendants.'" The trial court also found that:

Judge Kollar-Kotelly [ *fn8] extended deadlines on several occasions for the plaintiff and finally, on May 7, 1992, entered a specifi'c Order, detailing the inadequacies of the handling of plaintiff's claims, and gave plaintiff a final opportunity to present his claims in cognizable and proper form to the Court. She ordered that the Trustee's motion to intervene could be granted "contingent on the Trustee's filing of a proper pleading on or before May 22, 1992." Moreover, she explicitly warned the trustee that "no further delays will be tolerated and any lack of prosecution will result in a dismissal with prejudice as to all remaining defendants." Her order could not have been clearer.

The trustee still could not manage to comply. He failed to file "a pleading" which he had been ordered to do on at least two separate occasions by Judge Kollar-Kotelly. More importantly, he again failed to meet the Court-ordered deadline and failed to file his papers (inadequate as they were) by the close of business on May 22, 1992. Given the record in this case, and the very explicit Orders, this Court concludes that there is good cause to deny the Trustee's Motion for Leave to File, Time Having Expired.

On August 14, 1992, the trial court denied appellant's motion to reconsider and, after considering the entire record, dismissed the reinstated complaint with prejudice. *fn9



Appellant first asserts that the trial court erred in its original Conclusion that the trustee was the real party in interest and requiring intervention by the trustee. *fn10 The trial court's ruling was correct.

It is clear that appellant's right in any cause of action against the appellees, which existed in October 1989 when appellant filed the bankruptcy petition, passed to the trustee as an asset of the bankruptcy estate. 11 U.S.C.A. § 541(a)(1) (1993); Jones v. Harrell, 858 F.2d 667, 669 (11th Cir. 1988); see 2 COLLIER BANKRUPTCY MANUAL § 541.03 (3d ed. 1994). Thus the trustee and not appellant as the debtor became the real party in interest, and appellant lost his standing to bring or maintain the cause of action. See Jones, 858 F.2d at 669.

Because appellant's cause of action had become the property of the estate, the trustee was given full authority over it. Steyr-Daimler-Puch of America Corp. v. Pappas, 852 F.2d 132, 136 (4th Cir. 1988). In order for a bankrupt to bring or continue a cause of action in such circumstances, the trustee must abandon the cause of action. Id.; Scharmer v. Carrollton Mfg. Co., 525 F.2d 95, 98 (6th Cir. 1975) (trustee with the approval of bankruptcy court may elect to abandon assets of debtor); Taylor v. Swirnow, 80 F.R.D. 79, 82 (D. Md. 1978) (debtor cannot bring suit unless the trustee abandons the cause of action).

Abandonment is governed by 11 U.S.C.A. § 554 and 11 U.S.C.A. R. 6007. *fn11 Abandonment may be accomplished in three ways: (1) a proposed abandonment where the trustee files notice of abandonment in accordance with R. 6007(a); *fn12 (2) a compelled abandonment, where a party in interest may file with the bankruptcy court a motion to compel the trustee to abandon property pursuant to § 554(b); or (3) abandonment by operation of law pursuant to § 554(c). *fn13 See COLLIER, (supra) , § 554.04; 9 AM. JUR. 2D Bankruptcy § 1040 (1991). Here, no notice of abandonment, *fn14 motion to compel or order of abandonment was extant when the trial court made its initial determinations with respect to the real party in interest on October 1, 1991 nor its rulings with respect to the motion to vacate *fn15 on January 31, 1992 and on May 7, 1992, where the trial court directed the trustee to file a proper 24(c) pleading. *fn16


Appellant next asserts that the first Motion to Intervene and Statement filed February 28, 1992 was a sufficient pleading under Super. Ct. Civ. R. 24(c), and that the trial court erred in concluding to the contrary. The proposed pleading accompanying a motion to intervene must generally comply with Super Ct. Civ. R. 7(a), 8, and 10 dealing with pleadings. *fn17 Sanders v. John Nuveen & Co., 463 F.2d 1075, 1082 (7th Cir.) ("The pleading should be one of those described in Fed. R. Civ. P. 7(a) so that all parties understand the position, claims and nature of relief sought by the prospective intervenors"), cert. denied, 409 U.S. 1009, 34 L. Ed. 2d 302, 93 S. Ct. 443 (1972); 3B JAMES W. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 24.14 (2d ed. 1993) ("Ordinary rules of procedure control the interpretation of the pleading"). The pleading should set up the interest of the movant just as the original complaint. Babcock v. Town of Erlanger, 34 F. Supp. 293, 295 (E.D. Ky. 1940). A pleading must give fair notice of the material elements of a plaintiffs claim or a defendant's defense. 2A JAMES W. MOORE, ET AL., MOORE'S FEDERAL PRACTICE § 8.13 (2d ed. 1993); Scott v. District of Columbia, 493 A.2d 319, 323 (D.C. 1985) (under Rule 8(a), (e), complaint is sufficient so long as it fairly puts defendant on notice of claim against him).

Here, the form of appellant's so-called statement *fn18 did not resemble a complaint or answer. See Sanders, 463 F.2d at 1082. Furthermore, the statement did not disclose the name of the trustee, the time and manner of appointment, the trustee's role or authority to act nor the trustee's position on abandonment. The statement adopted certain allegations of the amended complaint without relating claims and the corresponding defendants. Given the totality of the circumstances, we see no basis to disturb the trial court's determination that the Motion to Intervene and Statement did not contain a sufficient pleading under Super Ct. Civ. R. 24(c), particularly when the consequence of such a determination was simply to require the intervenor to provide a more specific pleading.


Finally, appellant attacks as an abuse of discretion the trial court's dismissal of his reinstated and amended complaint on August 4, 1992. See District of Columbia v. Serafin, 617 A.2d 516, 519 (D.C. 1992). While the language of the order suggests that the trial court dismissed the complaint as a consequence Of the trustee's failure to timely file the proposed pleading pursuant to 24(c), the order does specifically reference the terms Of the May 7, 1992 order and the court's consideration of the entire record. See note 9, (supra) . Plainly, then, the trial court acted against the background of the totality of circumstances of this litigation in dismissing the complaint and did not exclusively and in isolation rely on the trustee's failure to timely file. *fn19

We review a trial court's dismissal with prejudice pursuant to Super. Ct. Civ. R. 41(b) under an abuse of discretion standard. Serafin, 617 A.2d at 519. Among the factors which the trial court should consider are: the nature of the party's conduct, including whether it is willful; the length of any delay in complying with the court's order; the reasons for the delay; and any prejudice to the opposing party. Id. In exercising its discretion, the trial court should first consider lesser sanctions. Id.

Here there was clear evidence of delay and indifference on the part of appellant. Over the course of the proceedings, appellant and the trustee *fn20 repeatedly failed to comply with orders issued by the trial court. See, e.g., Massengale v. 3M Business Products Sales, 504 A.2d 574, 579-80 (D.C. 1985) (dismissal of plaintiffs' action under Super. Ct. Civ. R. 41(b) for failure to comply with rules and court orders was proper where plaintiffs had failed to comply with four separate court orders); Perry v. Sera, 623 A.2d 1210, 1219 (D.C. 1993) (plaintiff's repeated failure to answer interrogatories or produce requested documents showed gross indifference to rules of court and to fair treatment of defendant which justified dismissal as sanction for failure to comply with discovery rules). Appellant's repeated delays were in the face of explicit warnings by the trial court and condemnation of appellant's lack of diligent prosecution. Further, as already indicated, the trial court had previously attempted to deal with the situation by imposing the lesser sanction of costs and attorneys fees for non-compliance with discovery requests and delays in prosecution.

The appellees were prejudiced by appellant's inaction and sloth. A major unresolved law suit continued to threaten the appellees with unsettled liability. See note 2, (supra) . The progress of the case was halted in the attempt to establish the proper party plaintiff, including appellant's inaction in the face of the first motion to dismiss, and in completing discovery requests; moreover appellees incurred additional expense and expended additional time in preparing and filing the relevant motions and oppositions. Solomon v. Fairfax Village Condominium IV Unit Owner's Association, 621 A.2d 378, 379 (D.C. 1993) (dismissal is appropriate "where appellee was prejudiced by appellant's delay"); West Coast Theater Corp. v. City of Portland, 897 F.2d 1519, 1524 (9th Cir. 1990) (prejudice shown if party incurred more costs in preparation and filing of opposition to motions). *fn21

Moreover, as we noted recently in Perry v. Sera, supra, 623 A.2d at 1219, appellant here chose to utilize the court system to try to redress alleged wrongs. When invoking such aid, it is particularly incumbent upon the plaintiff to follow the rules that keep that system running in an orderly and efficient manner. Delay and inaction prejudice not only the defendants but also the ability of other persons -- persons who are doing what is necessary to follow the rules -- to utilize the system.

Most telling here, however, as the trial court noted in dismissing the complaint, was that explicit notice had been given to appellant of the intended sanction for failure to comply. So forewarned, appellant cannot fairly complain when the trial court did precisely what it had said it would do. Some event inevitably becomes the last straw. Viewing this record as a whole, we do not think that the trial court abused its discretion in ultimately dismissing appellant's complaint.


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