657 B.R. 683
Bankr. E.D.N.Y.2024Background
- Nicole Cumberbatch filed for Chapter 7 bankruptcy and the estate included a three-family residential building in Brooklyn ("the Property").
- Debra Kramer was appointed as Chapter 7 trustee, and MYC & Associates, Inc. (MYC) was retained as the trustee’s real estate broker to market/sell the Property.
- Plaintiffs Shaquan Wilson and Lance White, claiming to be tenants, sought emergency relief in Housing Court after an alleged unlawful eviction by MYC on February 20, 2023.
- MYC removed the Housing Court case to Bankruptcy Court, asserting the claims affected the bankruptcy estate.
- MYC and its principal Marc P. Yaverbaum moved to dismiss, arguing lack of subject matter jurisdiction (Barton doctrine), qualified immunity, and failure to join the necessary party (the Chapter 7 trustee).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject matter jurisdiction (Barton doctrine) | Barton ultra vires exception; MYC acted wrongfully/illegally | Plaintiffs needed court leave to sue professionals like MYC | Dismissed: No leave sought, Barton doctrine applies |
| Qualified immunity of court officers | MYC’s actions exceeded scope/shield not applicable | MYC acted within court-authorized, trustee-directed scope | Dismissed: MYC is immune as court-appointed fiduciary |
| Necessary party (joinder of trustee) | Not addressed directly, argued for restoration from MYC | Only trustee can restore possession; trustee not joined | Dismissed: Trustee is required party not joined |
| Permissive abstention | Court should abstain to let state issues dominate | Bankruptcy court jurisdiction essential over estate property | Not reached—case dismissed on other grounds |
Key Cases Cited
- Barton v. Barbour, 104 U.S. 126 (1881) (establishes that court-appointed receivers and similar officers cannot be sued in another court without leave)
- In re DeLorean Motor Co., 991 F.2d 1236 (6th Cir. 1993) (extends Barton doctrine to professionals acting under trustee’s direction)
- In re Lehal Realty Assocs., 101 F.3d 272 (2d Cir. 1996) (Section 959(a) does not always override Barton; distinction between operating business and liquidation)