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Mason v. Unifirst Corp.

United States District Court, D. Maryland

June 12, 2018

ARTHUR MASON, Plaintiff,
v.
UNIFIRST CORPORATION Defendant.

          MEMORANDUM OPINION AND ORDER

          Paula Xinis United States District Judge

         On October 25, 2017, Plaintiff Arthur Mason filed a Complaint against Defendant Unifirst Corporation (“Unifirst”), alleging that Unifirst discriminated against him based on his race, age, and disability in violation of Title VII of the Civil Rights Act of 1967 (“Title VII”), the Age Discrimination in Employment Act of 1967 (“ADEA”), and the Americans with Disabilities Act of 1990 (“ADA”). Unifirst moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for lack of standing, judicial estoppel, and untimeliness. ECF No. 7. The issues are fully briefed, and the Court now rules pursuant to Local Rule 105.6 because no hearing is necessary. For the reasons stated below, Unifirst's motion is DENIED. Mason's claims, however, are for the trustee in bankruptcy to pursue. Accordingly, Plaintiff will be given a reasonable time to seek to reopen his bankruptcy case and amend his bankruptcy petition so to allow the trustee to intervene, ratify, or abandon the claims.

         I. Background

         Unifirst hired Mason as a Flat Goods Finisher in 2008. See ECF No. 1 ¶ 6. On March 10, 2013, Unifirst reassigned Mason to the more physically strenuous Mat Roller position, which eventually exacerbated his chronic Bi-Lateral Osteoarthritis and caused him severe pain. ECF No. 1 ¶¶ 9, 10. Mason alleges that Unifirst did not reassign younger and non-African American employees to Mat Roller positions. ECF No. 1 ¶ 9. Mason also alleges that he reported his pain to his supervisor and requested a transfer back to the Flat Goods Finisher position, but Unifirst denied his request and thereafter negatively reviewed Mason's work performance. ECF No. 1 ¶¶ 11, 12.

         Mason eventually took medical leave beginning July 31, 2013. ECF No. 1 ¶ 13. Unifist subsequently terminated Mason's employment on October 24, 2013, the day after he exhausted his medical leave. ECF No. 1 ¶ 15. Mason filed a complaint with the U.S. Equal Employment Opportunity Commission (“EEOC”) in November 2013. ECF No. 1 ¶ 16.

         On November 16, 2016, while the EEOC charge was pending, Mason filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Maryland. ECF No. 7-3 at 1. Mason did not disclose his discrimination claims to the bankruptcy court, nor did he list any legal claims against Unifirst among his schedule of assets. On February 14, 2017, the Bankruptcy Court discharged Mason from bankruptcy. ECF No. 7-4 at 1.

         On March 9, 2017, the EEOC issued a determination that Mason had presented probable cause that Unifirst violated the ADA. The EEOC also issued a right-to-sue letter on July 27, 2017. ECF No. 1 ¶¶ 17, 18. Mason then filed suit in this Court alleging employment discrimination based on his race, age, and disability. See generally ECF No. 1. On November 16, 2017, Unifirst moved to dismiss the Complaint for lack of standing, judicial estoppel, and untimeliness, arguing that Mason's failure to disclose his claim to the bankruptcy court precludes him from bringing this action. ECF No. 7-1 at 1. Because the Court finds that Mason's claims properly belong to his bankruptcy estate, the Court will afford Mason an opportunity to cure the standing issue by reopening the bankruptcy case to include the claims asserted in this case.

         II. Motion to Dismiss

         A. Standing

         Federal Rule of Civil Procedure 12(b)(1) governs motions to dismiss for lack of subject matter jurisdiction. Unifirst argues that because the filing of the EEOC charge occurred before Mason filed bankruptcy, the claim properly belongs to the bankruptcy estate and only the bankruptcy trustee has standing to bring this action. ECF No. 7-1 at 4-5. The Court agrees.

         An estate is created when a bankruptcy petition is filed, and a “debtor surrenders the right to control the estate, including existing or potential legal claims, to the bankruptcy trustee.” Robertson v. Flowers Baking Co. of Lynchburg, LLC, No. 6:11-CV-00013, 2012 WL 830097, at *4 (W.D. Va. Mar. 6, 2012), aff'd, 474 Fed.Appx. 242 (4th Cir. 2012). “Therefore, if a cause of action accrued before the debtor filed for bankruptcy, ‘the trustee alone has standing to bring that claim.'” Nicholas v. Green Tree Servicing, LLC, 173 F.Supp.3d 250, 255 (D. Md. 2016) (quoting Nat'l Am. Ins. Co. v. Ruppert Landscaping Co., 187 F.3d 439, 441 (4th Cir. 1999)). An EEOC charge qualifies as an asset that a debtor must disclose to the bankruptcy court. Robertson, 2012 WL 830097, at *3. Conversely, a debtor lacks standing to bring a claim that was not disclosed on the debtor's schedule, “even if the debtor was not aware of a legal basis for bringing that claim at the time the bankruptcy petition was filed.” Nicholas, 173 F.Supp.3d at 255. A debtor can regain standing to bring pre-petition claims if the trustee abandons the claim.[1] Id.

         Rule 17 of the Federal Rules of Civil Procedure prevents a court from dismissing an action for failure to prosecute in the name of the real party in interest until the real party in interest has been given reasonable opportunity to ratify, join, or be substituted into the action. Fed.R.Civ.P. 17. Thus, before this Court may dismiss claims belonging to the bankruptcy estate, “a court must first consider whether there has been reasonable time for the trustee to ratify, join, or be substituted into the action, and whether the plaintiff's decision to pursue the action directly was the result of an understandable mistake.” Nicholas, 173 F.Supp.3d at 257. Moreover, permitting the trustee to intervene is “a far less drastic alternative” than dismissal. Jones v. Safeway, Inc., No. ELH-12-03547, 2014 WL 6871586, at *6 (D. Md. Dec. 3, 2014).

         Mason's cause of action against Unifirst accrued before he filed for bankruptcy. Mason did not properly schedule his claims against Unifirst, and therefore the claims were not abandoned when the bankruptcy case closed. Consequently, this claim is part of the bankruptcy estate, and the trustee alone has standing to pursue the case. As Mason requests, the Court will afford Mason a reasonable time to reopen the bankruptcy case to amend the bankruptcy schedule, and give the trustee the opportunity to intervene, ratify, or abandon the claim. As Mason points out, it would “benefit the creditors to allow Plaintiff Mason to cure the standing defect instead of dismissing the case.” ECF No. 12.

         Mason will be granted 30 days to cure the standing issue by reopening the bankruptcy case, thus allowing the bankruptcy trustee to take appropriate next steps. See Jones, 2014 WL 6871586, at *7. If Mason fails to cure his ...


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