Tort Claims are Disallowed Where Unenforceable Against a Debtor Under Applicable State Law

Brigid Lynn 

St. John's University School of Law

American Bankruptcy Institute Law Review Staff

In In re JCK Legacy Co., the United States Bankruptcy Court for the Southern District of New York sustained an objection to a proof of claim by Alberto Colt-Sarmiento and disallowed and expunged Mr. Colt-Sarmiento’s claim on grounds that his tort claims lacked merit.[1] Mr. Colt-Sarmiento was convicted in Washington for second-degree murder and other charges after the shooting death of 18-year-old Elijah Crawford; Colt-Sarmiento is currently incarcerated in Washington and was sentenced to 61 years in prison.[2]  In March 2018, the Tacoma News Tribune published an article related to Colt-Sarmiento’s sentencing including details of a text message exchange between Colt-Sarmiento and a co-defendant.[3]  The article stated that messages, reading “KILLKILLKILL” and “well smoke em,” were exchanged the day of the murder.[4]  Colt-Sarmiento argues this is false as he did not send the text messages, the messages were not sent the day of the murder, the messages are not relevant to the crimes with which he was charged, and the phrase “KILLKILLKILL” is a lyric from a co-defendant’s favorite song.[5]

The Tacoma News Tribune, who published the article, is operated by Tacoma News, Inc.[6]  Tacoma News and its debtor affiliates filed petitions for relief under title 11 of the United States Code (the “Bankruptcy Code”) in February 2020 in the United States Bankruptcy Court for the Southern District of New York.[7]  In July 2020, Colt-Sarmiento submitted by mail a proof of claim, to which the trustee objected for untimeliness.[8] The bankruptcy court excused the late filing of the claim and deemed that Colt-Sarmiento had timely filed a general unsecured claim, to which the trustee again objected, arguing that the claims raised by Colt-Sarmiento were deficient as a matter of law.[9]  Mr. Colt-Sarmiento raised the following tort claims: defamation, false light invasion of privacy, intentional infliction of emotional distress, negligent infliction of emotional distress, and negligence.[10]

Under section 502(b)(1) of the Bankruptcy Code, a claim will be disallowed if it is “unenforceable against the debtor and property of the debtor, under any agreement or applicable law for reason other than because such claim is contingent or unmatured.”[11] Applicable law generally refers to state law.[12]  Here, the bankruptcy court applied Washington law in evaluating Colt-Sarmiento’s tort claims as that is his state of residence and where the article was published.[13]  Colt-Sarmiento alleged that the article was defamatory, but because a defamation defendant need only show that a statement is substantially true, or that the gist of the story is true, the bankruptcy court held that slight inaccuracies in the article did not make it defamatory under Washington law.[14]  Colt-Sarmiento’s claim of false light invasion of privacy also failed according to the bankruptcy court,  as it rested on the disclosure of false or misleading information, and Colt-Sarmiento was unable to show that the article contained false statements.[15] The intentional infliction of emotional distress claim failed because, according to the bankruptcy court, the article did not contain inaccuracies in reporting that rose to the level of outrageousness required to support the claim.[16]  Further, no allegations by Colt-Sarmiento supported a claim for negligent infliction of emotional distress, as such a claim requires the viewing of a physically injured family member after a traumatic accident.[17]  Last, Colt-Sarmiento’s negligence claim failed because he could not prove that the debtors breached any duty owed to him when it published the article.[18]  In addition, the contents of Colt-Sarmiento’s criminal trial were privileged material that fell within the responsibilities of the press to report, and the bankruptcy court would not hold the debtors negligent for reporting them or for being allegedly incomplete in its reporting of the trial.[19]

In evaluating Colt-Sarmiento’s claims, the bankruptcy court was “sympathetic with . . . Colt-Sarmiento’s contentions that his incarceration has limited his ability to do legal research” and thus “attempted to identify and to consider arguments that might support his claims.”[20] However, despite this careful review of applicable Washington law, each of Colt-Sarmiento’s tort claims were unsupported and legally insufficient.[21]  The trustee’s claim objection was therefore sustained, and Colt-Sarmiento’s claim was disallowed and expunged as it was unenforceable against the debtor under Washington law.[22]