United States District Court, E.D. Wisconsin
Stadtmueller U.S. District Judge
Novoselsky (“Novoselsky”), a resident of Pleasant
Prairie, Wisconsin, filed a Chapter 11 bankruptcy petition in
the United States Bankruptcy Court for the Eastern District
of Wisconsin. Before the Court is an appeal by Tiberiu Klein
(“Klein”), who is proceeding pro se as a
creditor of Novoselsky's bankruptcy estate. Klein appeals
from an order of Bankruptcy Judge G. Michael Halfenger
excusing a violation of the automatic stay pursuant to 11
U.S.C. § 362. Although the facts of the case are
difficult to parse, the legal issues before the Court are
simple. On this record, the Court must dismiss the appeal for
want of jurisdiction.
history of this case extends from long before the filing of
these bankruptcy proceedings. The web of litigation that
precedes the task before the Court is complicated but is
largely irrelevant to the disposition of the instant appeal.
The Court will briefly summarize the history between these
parties and then turn to the facts giving rise to Klein's
Zvunca was killed in 2002 when she was struck by a Greyhound
bus. Zvunca ex rel. Klein v. Greyhound Lines, Inc.,
530 F. App'x 672, 672 (10th Cir. 2013). Her
eight-year-old daughter, Cristina, witnessed her death.
Id. Klein, a resident of Illinois, was married to
Claudia at the time of her death, but he is neither
Cristina's biological nor adoptive father. Id.
onslaught of litigation, and litigation on that litigation,
followed Claudia's death. The Appellate Court of Illinois
summarized this legal morass, stating that “from the
tragic, but relatively straightforward, facts regarding
Claudia Zvunca's death, arose at least 13 lawsuits in
various state and federal courts. Among these were legal
malpractice suits and two wrongful death actions, proceeding
simultaneously in Illinois and Colorado. This court has also
had before it over 25 appeals related to this case, many of
which were filed by Klein in his continuing attempt to
intervene in this matter as the party entitled to represent
‘Cristina's' interests.” Cushing v.
Greyhound Lines, Inc., 991 N.E.2d 28, 33 (Ill. Ct. App.
2013). Given the plethora of simultaneously pending actions
and the number of parties involved, “the question of
‘who represented whom' was an issue”
throughout all the proceedings. Cushing v. Greyhound
Lines, Inc., No. 1-10-3176, 2013 WL 2404044, at *9 (Ill.
Ct. App. May 30, 2013). Another complicating factor was
Klein's penchant for hiring and firing his lawyers with
regularity. See Id. This included, at one point, the
debtor in the underlying bankruptcy proceedings at issue
here, David Novoselsky. Id. It appears that
Novoselsky also represented Cristina, her mother's
estate, or both for some time during prior proceedings.
purposes of this appeal, the Court need only describe two of
the several actions brought relating to Claudia Zvunca's
death and her estate's representation in prior
wrongful-death proceedings. In 2007, Cristina and her
mother's estate brought a wrongful death action in the
Circuit Court of Cook County, Illinois against several
defendants, including Greyhound Lines, Inc.
(“Greyhound”) and Motor Coach Industries, Inc.
(“Motor Coach”). (Docket #12-1 at 75-76); (Docket
#12 at 6). In April 2014, Cristina and her mother's
estate brought a similar action in the same court. (Docket
#12-1 at 75-76). In the 2014 complaint she included
Greyhound, Motor Coach, and various attorneys and
representatives involved in prior actions, including
Novoselsky. Id. Appellees represent that the 2014
action was filed as a “protective measure, ”
while admitting that this action was
“duplicative” of the 2007 case “and
completely unnecessary to the recovery on behalf of the
estate.” (Docket #12 at 6).
18, 2014, Novoselsky filed a Chapter 11 bankruptcy petition
in this District. (Docket #12-1 at 76). Klein joined the
bankruptcy as a creditor, filing a proof of claim for $6,
000, 000 for alleged legal malpractice. (14-29136, Docket
#38). As a result of Novoselsky's bankruptcy
filing, the 2014 Cook County action was placed on that
court's “bankruptcy stay calendar” in August
2014 to await the completion of the bankruptcy proceedings.
(Docket #12-1 at 76). In September 2014, Cristina filed a
motion to remove the 2014 action from the bankruptcy stay
calendar in order that she might dismiss some of the
defendants, including Motor Coach and Greyhound. Id.
Novoselsky opposed the motion, arguing that dismissal of
those defendants would impair his claims for contribution
against them, which he asserted were assets of his bankruptcy
estate. Id. at 76-77. According to Appellees, the
Cook County Circuit Court declined to remove the 2014 case
from the bankruptcy stay calendar. Id. at 77.
and a half later, on January 15, 2016, Cristina filed a
motion with the bankruptcy court seeking relief from the
automatic stay under 11 U.S.C. § 362 so that she could
dismiss Greyhound and Motor Coach from the 2014 Cook County
action. See Id. at 78-79. Novoselsky again objected,
contending that dismissal of those defendants would impair
his potential claims for contribution. (Docket #12 at 6-7).
Klein objected too, asserting that the potential contribution
claims Novoselsky might have against Greyhound and the other
defendants in the 2014 case “[have] significant
value.” (Docket #12-1 at 96). Klein also stated,
without explanation, that the dismissal would prevent
Novoselsky from asserting counterclaims against Cristina and
Claudia's estate for malicious prosecution and for unpaid
attorney's fees. See Id. at 96-99.
bankruptcy court held two hearings on the motion. The first
occurred on February 10, 2016, and the second was held one
month later. Id. at 108-15. In the interim between
the two hearings, Cristina, apparently under the impression
that the Court was sure to rule in her favor, requested in
Cook County that the 2014 action be taken off the bankruptcy
stay calendar and then dismissed the entire 2014 action,
including Novoselsky, with prejudice. (Docket #12 at 7).
Cristina's counsel informed the bankruptcy court of the
dismissal at the March 10, 2016 continued hearing.
had appeared at both hearings and argued against granting
relief from the stay. Id. At the March 10, 2016
session, Klein asserted that taking the 2014 action off the
bankruptcy stay calendar was a violation of the stay.
Id. After hearing the parties' arguments-which
are not available to this Court because the hearing was
audio-recorded and never transcribed-the bankruptcy court
found that “the state court proceeding that resulted in
an order dismissing the debtor was a continuation of a
judicial proceeding against the debtor” and was
“thus a technical violation” of the automatic
stay. (Docket #12-1 at 112-14).
the bankruptcy court concluded that there was cause to grant
relief from the stay and annul the stay retroactively so as
to sanction the dismissal. Id. According to
Appellees, Cristina apprised the bankruptcy court that the
2014 action had “no value” because the same
wrongful death claims were nearly trial-ready in the 2007
case. (Docket #12 at 8). Cristina further asserted that
having both cases pending at the same time could create
thorny procedural problems. Id. Appellees state that
the trustee of the bankruptcy estate agreed with them.
Id. at 8-9. The bankruptcy court concluded,
therefore, that “there [was] good reason for the Estate
of Claudia Zvunca to have wanted to dismiss the [2014 Cook
County] case, ” since “that case stood in the way
of the litigation of the Estate's 2007 state court case
based on the Illinois pending case rule.” (Docket #12-1
at 113.) Further, “absent Novoselsky's bankruptcy,
the estate would have simply dismissed the action, but the
automatic stay was thought to have prevented that
course.” Id. Moreover, “[a]lthough
certain creditors contended that the Illinois court's
dismissal might eliminate valuable claims that are property
of the estate, ” the bankruptcy court found that
“none of those arguments was convincing.”
Id. In its order, the court did not explain what
these arguments were or why the court found them wanting.
April 5, 2016, Klein appealed the bankruptcy court's
order. (Docket #1). On June 20, 2016, the trustee abandoned
certain of Novoselsky's contingent claims, including the
potential claim for attorney's fees that Klein believed
Novoselsky could have asserted against Cristina and her
mother's estate. (Docket #12-1 at 117-19). Appellees
assert that Klein has been trying to purchase this and other
of Novoselsky's legal claims for a nominal amount.
April 20, 2016, Klein filed with the bankruptcy court a
motion to reconsider its order granting relief from the
automatic stay. Id. at 121. The bankruptcy court
denied the motion on July 6, 2016, noting that Klein had
identified no basis for setting aside the prior order.
Id. at 122. The court observed that Klein's
arguments were similar to those presented regarding the
original order and that repetition of the argument was not a
proper basis for reconsideration. Id. This appeal