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CalAttorney2
CalAttorney2, Attorney
Category: Legal
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Experience:  Civil litigation attorney for individuals and businesses.
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I have a question regarding a defamation-misrepresentation

Customer Question

I have a question regarding a defamation-misrepresentation lawsuit I have filed as a pro se plaintiff.
Background: I filed the lawsuit in a Maryland state court. Shortly after I filed a complaint, a defendant, a reputable newspaper and its parent company, filed for Chapter 11 bankruptcy. I filed a Proof of Claim with the bankruptcy court, in Delaware. I cited my state lawsuit as the basis for the claim. Debtors’ attorneys filed an objection to my claim and I replied. My reply moved the attorneys to begin discussions as to how to resolve our dispute.
We worked for about a year and a half on an agreement that was to allow the case to proceed in the state court for the limited purposes of 1) me filing an amended complaint and 2) defendants (debtors) filing a motion to dismiss. If my case survived the motion to dismiss the original stay on the case was to be restored and we would discuss how the case would further proceed in the state court through pretrial discovery.
Then, the attorneys changed course. They sought to have the case presented to the bankruptcy court instead of the state court. That troubled me but, thinking that the bankruptcy court would follow the rules of the state court, I agreed to the change, as long as I was still permitted to submit the amended complaint. They agreed.
So, with all the documents submitted to the bankruptcy court (including the amended complaint, objections to it, and my replies to the objections), the court held a hearing on the case.
I was under the impression, from all that had taken place, that the proceedings basically would be the equivalent of a motion to dismiss in the state court. I reasoned that the purpose of the bankruptcy court was to establish whether or not I had a case that would be worthy to continue in the state court.
Four years later, recently, the bankruptcy court issued a ruling. It disallowed my claim, fully. More troubling to me though, was that the court required proof of the claims of the amended complaint. I had not provided any proof. I was under the impression that we were at the early stage of litigation at which my claims and inferences from them were accepted as true, as would have been the case in the state court. It seems that, from their objections and replies, the debtors’ attorneys, from a highly reputable firm, were also under the impression that proof was not needed. They did not complain of an absence of proof, as did the court. Rather, they simply complained of vagueness in the claims of my amended complaint.
Essentially, it seems as if the court issued the equivalent of a final judgment in the state court based upon evidence and a trial. I feel as if I have been denied the due process of the state court including the chance to further amend my complaint, to present the evidence I have of the truth of my claims, to carry out the discovery needed to obtain further evidence to prove my claims, and to engage in a trial.
I appealed the ruling. One of the grounds is the denial of due process. I have been researching case histories to uncover a case similar to mine so that I can see if what the bankruptcy court did was correct. I am having some trouble in finding one.
My Questions: 1) Did the bankruptcy court exceed its bounds in accelerating the judicial proceedings far beyond those of the state court? And 2) Can you provide me the citation for an opinion on a case similar to mine that will bring out how a case such as mine proceeds in the bankruptcy court and perhaps the citation for a statement from a code volume or the like that outlines the procedure.
I greatly appreciate your efforts in this matter.
Submitted: 5 months ago.
Category: Legal
Expert:  CalAttorney2 replied 5 months ago.

Dear Customer,

Thank you for using our forum. My name is ***** ***** I hope to assist you with this matter.

While I do not believe I am going to be able to satisfy your request for a single citation to a case or statute that covers your 4 years of complex litigation, I do believe I can help you more properly frame your case and perhaps provide you with a better reference point to consult with local counsel prior to filing your appeal (you will definitely want to at least consult with a local federal appellate law attorney prior to filing your appeal - appellate law is nothing like trial court litigation, either in bankruptcy court or state trial court, so you will want to speak with a local specialist to review your proceeding and help you identify where any appealable errors arose and how best to present these to the court - even if you plan on drafting your own appellate brief).

As an initial matter, bankruptcy courts have the authority to try cases that otherwise would be tried in state court.

This is most commonly done in what is called an "adversary proceeding" (the bankruptcy equivalent of litigation).

The adversary proceeding occurs as a separate proceeding from the underlying bankruptcy, but is given its own case number ***** is treated as a separate proceeding.

(You should be able to identify if your case was treated under this procedure by whether or not a separate case number ***** assigned (you will usually see this on pleadings and filings as having both the bankruptcy case number AND the adversary proceeding number)).

The Bankruptcy court will apply state law as the substantive law (so state statute of limitations, state law on defamation, state law on contracts, etc.), but they will use Federal Bankruptcy Procedure (https://www.law.cornell.edu/rules/frbp - adversary proceeding rules start in the 7000 series, "Part 7" of the Federal Rules of Bankruptcy Procedure)).

These rules closely match the Federal Rules of Civil Procedure (when there is a question about Bankruptcy Procedural law, the courts look to the Federal Civil Rules of Civil Procedure, not to state law).

With all of the above, I would speculate that your case was probably dealt with in an adversary proceeding, the court applied Federal Rules of Bankruptcy Procedure, and your civil claim was dismissed under some motion made by the defendants in that process.

If you want to file an appeal of the court's judgment in this process, you have a right to do so (be advised the time to file such an appeal is very short - 14 days from entry of judgment)

And you must follow the rules of procedure for bankruptcy (again the rules cited above, but this time the 8000 series or section 8).

And again, I would recommend talking to a local specialist to help you review your case to help you identify errors of law that will make your case more likely to succeed on appeal

(You can file your notice of appeal right away to preserve your time (remember that 14 day clock is running), but definitely speak to a local attorney early on to help you better prepare your appellate brief).

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