HARTFORD, Conn. (Legal Newsline) – The Connecticut Appellate Court has upheld a lower court’s ruling in favor of Monroe-based law firm Beck & Beck LLC that had filed a lawsuit against James T. Costello to recover unpaid legal fees.
According to the opinion issued Nov. 21, Beck & Beck initially filed a complaint in small claims court against Costello to recover allegedly unpaid legal fees for representing him in receivership action against his condominium association.
Costello then filed counterclaims and cross-claims against Beck & Beck and Kenneth A. Beck. After the trial court dismissed those claims, he filed an appeal, claiming the trial court erroneously dismissed his counterclaims and cross-claims stating a lack of standing after the court determined the claims belonged to his bankruptcy estate and not to him.
The appellate court rejected his claims and upheld the trial court’s judgment.
After Beck & Beck filed a claim to recover unpaid legal feeds, Costello filed the counterclaim alleging breach of contract, breach of the implied covenant of good faith and fair dealing, professional malpractice and violation of the Connecticut Unfair Trade Practices Act, the opinion states.
Beck & Beck filed a motion to strike Costello’s entire counterclaim, stating his claims were legally insufficient because he couldn’t set proximate cause or damages in his assertions.
The trial court granted Beck & Beck’s motion to strike the counterclaims and Costello filed an appeal.
But because Costello failed to list the claim as an asset on his Chapter 7 bankruptcy filing, he lost the ability to seek a claim on his behalf after the case was discharged.
“Even indulging every presumption in favor of jurisdiction, we cannot conclude that the defendant has standing to pursue his amended counterclaims and cross-claims,” the appeals court wrote in its Nov. 17 opinion.
Citing Crawford v. Franklin Credit Management Corp., the appeals court also noted in its opinion that “the case law makes it clear that upon the filing of a bankruptcy petition, all prepetition causes of action become the property of the bankruptcy estate ... and that in order to revest in the debtor through abandonment, the assets must be properly scheduled.”
As a result, because Costello didn’t include the claim on his Schedule B in bankruptcy court, the appeals court sided with the lower court, ruling that it is owned by the bankruptcy estate.
“Accordingly, the court correctly determined that the defendant lacks the requisite standing to bring the amended counter-claims and cross claims against the plaintiff and counter-claim defendant,” the appeals court concluded in affirming the judgment.