LA bankruptcy court discharges company consultant for wage claims

BY Order of Discharge of Debtor dated April 1, 2013, the US Bankruptcy Court, Central District of California, in Los Angeles, discharged a consultant of a freight forwarder from the wage and defamation claims of an alleged employee.

The Author represented the freight forwarding company and the consultant in both the civil suit and the Chapter 7 bankruptcy petition filed in the Los Angeles.  Their identities are withheld to protect their privacy.

The filing of the bankruptcy protection resulted in the automatic stay of the civil suit filed by the alleged employee against the company and consultant.  Both alleged as an affirmative defense that the plaintiff was an independent contractor who committed trespass and theft in the company premises in Los Angeles.

Civil suit for wage and hour and slander

On November 20, 2011, plaintiff individual, alleging to be an employee of defendant company, filed his Complaint for wage and hour (overtime and wage) and defamation (slander) against the company and its consultant who was employed by the company.

More  particularly, the complaint for damages alleged the following causes of action:  failure to pay overtime wages, failure to provide rest periods, failure to provide meal periods, willful failure to pay wages, failure to provide itemized wage statements, violation of Business and Professions Code Section 17200, et. Seq., and defamation (slander).

On January 5, 2012, the two named defendants filed their Answer, generally denying each and every allegation contained in the unverified complaint, pursuant to Section 431.30(d) of the Code of Civil Procedure, and asserting twenty (20) affirmative defenses, including failure to allege facts sufficient to state cause of action, statute of limitations, lack of alter ego, independent contractorship, monthly salaried employment, probable cause in reporting trespass, and theft, etc.

The civil suit was assigned to Los Angeles Superior Court Judge Abraham Khan of Department 51 of the Central District.  After several case management and status conferences and discovery, the bankruptcy filing resulted in the automatic stay of the civil suit to date.

Bankruptcy discharge and filing of proof of claim

On December 28, 2012, the Author filed separate Chapter 7 bankruptcy petitions for both the defendant  company and consultant with the US Bankruptcy Court, Central District of California, in Los Angeles, which resulted in the issuance of an automatic stay of the civil suit for damages.

At the meeting of creditors (Section 341(a) meeting) on January 24, 2013, the attorney for the plaintiff appeared and examined the representative of the company and the consultant, as allowed by Trustee Jason M. Rund.  The company has three (3) old trucks as estate assets under the control of the Trustee.

As stated above, the Bankruptcy Court issued the Discharge Order dated April 1, 2013, which discharged the defendant consultant from claims of unsecured creditors, including the plaintiff in the complaint for damages.

As for defendant and debtor company, the Bankruptcy Court issued Notice of Possible Dividend and Order Fixing Time To File claims on February 11, 2013, stating that “sufficient assets may become available for a distribution to creditors, and requiring creditors to file their proofs of claim on or before May 17, 2013.

Plaintiff in the civil suit filed his Proof of Claim for $233,280.20 on May 17, 2013.  The Trustee has not acted on plaintiff’s Proof of Claim to date.

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Roman P. Mosqueda has practiced criminal defense and Immigration law for over 20 years. He is a long-time member of the California Public Defenders Association. , and trained as a prosecutor with the Los Angeles City Attorney under the Trial Advocacy Program of the Los Angeles County Bar Association. He is also a volunteer, State-Bar trained arbitrator on attorney’s fees dispute resolution. Send comments or inquiries to  rpm_law@yahoo.com , or call (213) 252-9481 for free consultation appointment, or visit his website at  www.mosquedalaw.com

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