In re Shoppingtown Mall NY LLC

629 B.R. 391

IN RE: SHOPPINGTOWN MALL NY LLC, Debtor.

Bankruptcy No. 19-23178-CMB

United States Bankruptcy Court, W.D. Pennsylvania.

Signed July 7, 2021

Desiree Yagan, pro se, Movant.

Sarah Wenrich, Esq., for Debtor/Respondent.

Related to Doc. No. 587

MEMORANDUM OPINION

Carlota M. Böhm, Chief United States Bankruptcy Judge The matter presently before the Court is the Motion to Allow Claim Temporarily for Voting Purposes ("Motion to Allow," Doc. No. 587) filed by Desiree Yagan, who is proceeding pro se in this case. As clarified on the record at the hearings held on May 12, 2021, Ms. Yagan's motion is construed as a motion for leave to file a late claim.¹ The Motion to Allow is opposed by the Debtor, Shoppingtown Mall NY LLC (Doc. No. 598). For the reasons set forth herein, this Court finds that Ms. Yagan failed to establish excusable neglect, and the Motion to Allow must be denied.

Background & Procedural History

The above-captioned case was commenced on August 13, 2019, when Debtor filed a petition seeking relief under Chapter 11 of the Bankruptcy Code.² At the time of the filing, Debtor owned certain real property located in Dewitt, New York, known as Shoppingtown Mall. From its commencement, the case was plagued with contentious disputes between the Debtor and certain taxing bodies regarding real estate taxes owed on the Debtor's property. Ultimately, in November 2020, after a global mediation successfully resolved all disputes, the case appeared to be on track for a consensual plan. The following motions were filed with respect to the parties' settlement: Expedited Motion for Entry of an Order Approving Private Sale of the Debtor's Real Property Free and Clear of Liens, Claims, and Encumbrances Pursuant to Settlement Agreement (Doc. No. 483) and Motion for Order Approving Settlement Agreement Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (Doc. No. 485). The hearings were scheduled for December 14, 2020.

Ms. Yagan's first appearance in the case was in December 2020 when she filed an objection (Doc. No. 501) to the sale of Debtor's real property. The sale of the property was a key component of the global settlement among the parties. At the hearing held December 14, 2020, Ms. Yagan's objection to the sale was overruled. As noted on the record, Ms. Yagan's objection appeared more in the nature of an alleged claim against the Debtor. The deadline, however, for filing non-governmental claims expired on December 31, 2019.

On January 11, 2021, over one year after the bar date, Ms. Yagan filed a Proof of Claim asserting an unsecured claim in the amount of $11,000,000.00. The claim relates to an incident that occurred on Debtor's property on November 30, 2017. Ms. Yagan asserts that a motorist accelerated and intentionally struck her while she was walking through the mall parking lot. As described by Ms. Yagan, numerous claims stemmed from this incident including claims against local authorities and a medical malpractice claim against a rehabilitation center. The claims described against the Debtor involve allegations of failure to report the incident, failure to preserve alleged video surveillance, and some form of fraud in conjunction with local law enforcement regarding falsifying a police report and covering up a vehicular assault. Upon initial review of the Proof of Claim, any potential liability of the Debtor is unclear, and the attached documents do not appear to provide any credible support.

On February 10, 2021, Debtor filed its Fourth Amended Disclosure Statement to Accompany Debtor's Third Amended Chapter 11 Plan of Reorganization Dated February 10, 2021 ("Disclosure Statement," Doc. No. 549) and Debtor's Third Amended Chapter 11 Plan of Reorganization Dated February 10, 2021 ("Plan," Doc. No. 548). Pursuant to the terms of the Plan, unless Ms. Yagan sought and obtained allowance of her claim, confirmation of the Plan would result in disallowance of the late-filed claim. See Plan, Article X. The proposed treatment of Ms. Yagan's claim was specifically addressed by counsel for the Debtor at the hearing on the Disclosure Statement held March 31, 2021, and Ms. Yagan participated in that hearing. The Disclosure Statement was approved over Ms. Yagan's objection (Doc. No. 558) by Order dated March 31, 2021 (Doc. No. 561). A confirmation hearing on the Plan was scheduled for May 12, 2021.

Shortly after the approval of the Disclosure Statement, the Debtor filed its Motion to Estimate Claim of Desiree Yagan for Voting Purposes ("Motion to Estimate," Doc. No. 569). Debtor requested that the claim be estimated in the amount of $0 as the claim was untimely and did not appear to support any claim, let alone an $11,000,000.00 claim, against the Debtor. The hearing on the Motion to Estimate was scheduled for the same time as the hearing on confirmation of the Plan.

On May 3, 2021, nearly four months after Ms. Yagan filed her late claim and approximately sixteen months after the deadline to file a proof of claim, Ms. Yagan filed her Motion to Allow. The Motion to Allow was also set for hearing on May 12, 2021, with the Plan and Motion to Estimate.

Ms. Yagan did not file an objection to the Plan; however, her vote was the sole vote rejecting the Plan. See Plan Ballot Summary (Doc. No. 597). As set forth on the record on May 12, 2021, the Plan could be confirmed but for the unresolved issues regarding Ms. Yagan's untimely claim. Whether Ms. Yagan's claim should be allowed and the value of the claim if allowed impact confirmation of the Plan.³ Accordingly, the hearing on the Motion to Estimate and the confirmation hearing on the Plan have been continued to July 28, 2021, while the evidentiary hearing on the Motion to Allow was scheduled to proceed on June 23, 2021. Ms. Yagan assured the Court of her ability to participate in the evidentiary hearing via video conference despite only appearing telephonically at prior hearings.

By Order dated May 14, 2021 (Doc. No. 609), the Court set deadlines related to the evidentiary hearing. Witness lists, exhibit lists, and labeled exhibits were due by June 14, 2021. The Order further provided that the parties were to be prepared to proceed at the evidentiary hearing without delay or continuance. By letter dated June 11, 2021 (Doc. No. 626), Ms. Yagan sought an extension of deadlines related to the evidentiary hearing. The request was denied (Doc. No. 627) as Ms. Yagan failed to provide a basis upon which to grant an extension. Debtor timely filed its witness and exhibit lists (Doc. No. 624) and provided exhibits to the Court.

On the morning of the evidentiary hearing, which was set to commence at 9:00 a.m., Ms. Yagan submitted several sets of documents to the Court, including an emergency motion to adjourn the hearing (Doc. No. 635). Notably, she was not present when the Court began the hearing. Debtor's counsel was present with a witness and prepared to proceed. Over twenty minutes after the hearing was scheduled to begin, the Court was able to reach Ms. Yagan by phone and connect her to the hearing. See Audio Recording of Hearing Held June 23, 2021, at 9:25:08-9:27:20. Ms. Yagan failed to provide any acceptable explanation for her failure to connect to the hearing on her own at least by telephone if she was unable to connect via video.⁴ Nonetheless, Ms. Yagan was granted a brief continuance of the evidentiary hearing to June 29, 2021. Ms. Yagan was reminded that she failed to submit exhibits to the Court. She was also advised not to file documents the day before or the day of the evidentiary hearing. See Audio Recording of Hearing Held June 23, 2021, at 10:04:28-10:04:45.

Notwithstanding the foregoing, on the morning of the continued evidentiary hearing, Ms. Yagan submitted two sets of exhibits to the Court (Doc. Nos. 639-640).⁵ Nonetheless, the Court proceeded with the evidentiary hearing, and Ms. Yagan participated via video conference. The Court heard the testimony of Ms. Yagan and Christina Wirick, a legal assistant and paralegal employed by Bernstein-Burkley, P.C., counsel for the Debtor in this case. Although Ms. Yagan testified for approximately two hours, the majority of her testimony was irrelevant to the narrow issue before the Court.⁶ Further, the Court found her testimony to be self-serving and inconsistent thereby detracting from her credibility. The matter was taken under advisement and is now ripe for decision.

Findings of Fact

Debtor identified Ms. Yagan in its Schedules as an individual holding a nonpriority unsecured claim in the amount of $0 with said claim being contingent, unliquidated, and disputed. See Schedule E/F, Doc. Nos. 21 and 64. The Court set the deadline for filing a proof of claim as December 31, 2019. See Doc. No. 23. Service of the notice of the bar date was made on Ms. Yagan by first class mail at the following address: PO Box 645, Syracuse, NY 13214 (hereinafter the "PO Box").⁷ See Audio Recording of Hearing Held June 29, 2021, at 11:05:51-11:06:43.⁸ The mailing was not returned to sender as undeliverable nor was any other mailing to that address returned to Debtor's counsel in this case. See Audio Recording at 11:06:40-11:07:34. For thirty years, Ms. Yagan has maintained the PO Box. See Audio Recording at 11:29:00-50. Though she asserts that certain agencies and even a firm that represented the Debtor in some unrelated, prepetition state court litigation knew to send her mail to another address, she used the PO Box as her letterhead in correspondence regarding important legal matters. See Audio Recording at 11:29:00-11:37:52, 11:45:15-11:47:45; Exhibit 4A; Exhibit P (Doc. No. 639). The PO Box also appears as Ms. Yagan's address on the police report regarding the incident at the Debtor's property. See Exhibit 4B. Further, Ms. Yagan continued to collect mail from the PO Box even after the bankruptcy case was filed. See Exhibit 6.⁹

To the extent Ms. Yagan asserts that she did not receive notice of the bar date, the Court finds Ms....