Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 1 of 6

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE:

§
§
§
§
§

STANISLAW R. BURZYNSKI,
Debtor.

CASE NO. 15-34872 (DRJ)
Chapter 7 (involuntary)

MOTION TO DISMISS INVOLUNTARY PETITION AND REQUEST FOR
ATTORNEYS’ FEES
THIS MOTION SEEKS AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF
YOU OPPOSE THE MOTION, YOU SHOULD IMMEDIATELY CONTACT THE
MOVING PARTY TO RESOLVE THE DISPUTE. IF YOU AND THE MOVING PARTY
CANNOT AGREE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE
MOVING PARTY. YOU MUST FILE AND SERVE YOUR RESPONSE WITHIN 21
DAYS OF THE DATE THIS WAS SERVED ON YOU. YOUR RESPONSE MUST
STATE WHY THE MOTION SHOULD NOT BE GRANTED. IF YOU DO NOT FILE A
TIMELY RESPONSE, THE RELIEF MAY BE GRANTED WITHOUT FURTHER
NOTICE TO YOU. IF YOU OPPOSE THE MOTION AND HAVE NOT REACHED AN
AGREEMENT, YOU MUST ATTEND THE HEARING. UNLESS THE PARTIES
AGREE OTHERWISE, THE COURT MAY CONSIDER EVIDENCE AT THE
HEARING AND MAY DECIDE THE MOTION AT THE HEARING.
REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY.
To the Honorable David R. Jones,
Chief United States Bankruptcy Judge:
Dr. Stanislaw R. Burzynski (“Burzynski”) files this Motion to Dismiss Involuntary
Petition and Request for Attorneys’ Fees pursuant to Rule 1011 of the Federal Rules of
Bankruptcy Procedure, Rule 12(b) of the Federal Rules of Civil Procedure and 11 U.S.C. § 303.
SUMMARY
This involuntary petition must be dismissed because, as the petitioning creditor is well
aware, Burzynski has more than 12 creditors and the petition was filed by less than three
creditors. Additionally, the debt of the sole petitioning creditor, Burzynski’s former attorney, is

1
5129921v1

 Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 2 of 6

subject to a bona fide dispute.

Based on the foregoing, Burzynski requests an award of

attorneys’ fees and punitive damages against the petitioning creditor under 11 U.S.C. § 303(i).
LEGAL STANDARD
1.

Rule 12(b)(6) allows a Court to dismiss a case for failure to state a claim upon

which relief can be granted. Fed. R. Civ. P. 12(b)(6). In deciding a Rule 12(b)(6) motion, the
Court must accept as true all well pleaded factual allegations. Dorsey v. Portfolio Equities, Inc.,
540 F.3d 333, 338 (5th Cir. 2008). In addition, the Court must view all facts, and reasonable
inferences drawn therefrom, in the light most favorable to the plaintiff. See Wilson v. Birnberg,
667 F.3d 591, 595 (5th Cir. 2012), cert. denied, 133 S. Ct. 32 (2012). However, the Court does
not have to accept unreasonable inferences, unwarranted deductions of fact, or conclusory legal
allegations contained in the complaint and a complaint may be dismissed where the facts
pleaded, and reasonable inferences drawn therefrom, are insufficient to support the relief sought.
Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005).
2.

To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S.
662, 677-79, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009) (internal citations and quotations
omitted). Thus, in deciding a motion to dismiss, “the Court must limit its analysis to the four
corners of the complaint.” Florio v. Canty, 954 F. Supp. 2d 227, 231-32 (S.D.N.Y
2013). However, the Fifth Circuit has expressly recognized that documents attached to a motion
to dismiss that are “referred to in the plaintiff’s complaint and . . . central to her claim” are
considered part of the pleadings. Causey v. Sewell Cadillac Chevrolet, Inc., 394 F.3d 285, 288
(5th Cir. 2004); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).
3.

Courts should “scrutinize the creditor’s filing carefully because ‘the filing of an

involuntary petition is an extreme remedy with serious consequences to the alleged debtor, such
2
5129921v1

 Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 3 of 6

as loss of credit standing, inability to transfer assets and carry on business affairs, and public
embarrassment.’” In re Cates, 62 B.R. 179, 180 (Bankr. S.D. Tex. 1986). “An allegation of
bankruptcy invokes remedies not available to any ordinary debt collection procedures. It should
not be invoked unadvisedly and contrary to statutory right.” In re Walden, 781 F.2d 1121, 1123
(5th Cir. 1986).
4.

The burden is on the petitioning creditor to prove that the requirements of 11

U.S.C. § 303 have been satisfied. See, e.g., In re Xacur, 216 B.R. 187, 194 (Bankr. S.D. Tex.
1997).
FACTUAL BACKGROUND
5.

On September 17, 2015, Richard A. Jaffe, Esq. (“Jaffe”), Burzynski’s former

attorney, filed an involuntary chapter 7 petition based on a claim of unpaid legal fees in the
amount of $248,221.63 (Doc. No. 1). No other debts were listed and no other creditor joined the
involuntary petition.
6.

Jaffe provided legal representation to Burzynski and his sole proprietorship, the

Burzynski Clinic, for almost 30 years prior to the filing of this involuntary case. Jaffe was very
familiar with the Burzynski Clinic’s business and the existence of well in excess of 12 creditors.
The legal services in dispute were allegedly rendered between December 2014 and June 2015.
7.

Burzynski disputes the validity of the time sheets submitted with Jaffe’s invoices

because Jaffe’s time was inflated and the amounts charged are not commensurate with the
services provided.
8.

Burzynski, through the Burzynski Clinic, has more than 12 creditors.
MOTION TO DISMISS

9.

Section 303(b)(2) of the Bankruptcy Code provides that an involuntary case may

3
5129921v1

 Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 4 of 6

only be commenced by a single creditor if the debtor has fewer than 12 creditors. If a debtor has
more than 12 creditors, § 303(b)(1) requires that three or more creditors join in the involuntary
petition.
10.

Burzynski has more than 12 creditors and, notwithstanding Jaffe’s knowledge of

this fact, Jaffe is the sole petitioning creditor. Therefore, this involuntary case, which amounts to
nothing more than a two-party dispute, must be dismissed. See, e.g., In re James Plaza Joint
Venture, 67 B.R. 445 (Bankr. S.D. Tex. 1986); see also, In re Cates, 62 B.R. 179, 180 (Bankr.
S.D. Tex. 1986) (dismissing case and assessing damages against creditor where involuntary was
used by a single creditor as a forum for the trial and collection of an isolated disputed claim).
11.

Further, § 303(b)(1) requires that the petitioning creditors’ claims not be the

subject of a bona fide dispute as to liability or amount. The Bankruptcy Code does not define
“bona fide dispute,” but the Fifth Circuit has held that a debt is subject to a bona fide dispute
when “there is an objective basis for either factual or legal dispute as to the validity of the debt.”
In re Edwards, 501 B.R. 666, 681 (Bankr. N.D. Tex. 2013) (citing In re Sims, 994 F.2d 210, 221
(5th Cir. 1993)). The amount of Burzynski’s debt to Jaffe is the subject of a bona fide dispute as
to amount because Jaffe’s invoices are inflated and the amounts charged are not commensurate
with the services provided.
Request for Attorneys’ Fees and Punitive Damages
12.

Section 303(i)(1) of the Bankruptcy Code allows this Court to grant a judgment in

Burzynski’s favor against Jaffe for costs and reasonable attorney’s fees upon dismissal of the
involuntary petition. Section 303(i)(2) of the Bankruptcy Code further allows this Court to
award actual and punitive damages against Jaffe upon a finding that the petition was filed in bad
faith.

4
5129921v1

 Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 5 of 6

13.

“[T]he onus is on the [creditor’s] attorney to investigate the debtor’s financial

position prior to filing an involuntary petition in bankruptcy.” Walden, 781 F.2d at 1123. Jaffe
filed the involuntary petition in bad faith because he had actual knowledge that Burzynski had
more than 12 creditors due to knowledge gained in connection with his prior, long-standing legal
representation of Burzynski and the Burzynski Clinic.

Jaffe’s failure to comply with the

requirements of 11 U.S.C. § 303 by filing this involuntary petition alone is particularly egregious
given that Jaffe is himself an attorney. Accordingly, Burzynski requests this Court’s order
dismissing the case include an award of costs and reasonable attorneys’ fees plus appropriate
punitive damages.
14.

Section 303(e) of the Bankruptcy Code allows this Court to require a petitioning

creditor to post a bond to indemnify the debtor for such amounts that may later be allowed under
Section 303(i). Burzynski estimates that his attorneys’ fees related to contesting this involuntary
proceeding, assuming a contested trial, will be approximately $25,000.00. Therefore, Burzynski
requests that the Court order Jaffe to deposit $25,000.00 into the registry of the Court.

5
5129921v1

 Case 15-34872 Document 7 Filed in TXSB on 10/14/15 Page 6 of 6

Accordingly, Burzynski request entry of an order dismissing this involuntary bankruptcy
case with prejudice and requiring Jaffe to pay Burzynski’s attorneys’ fees incurred in responding
to the involuntary petition.
Dated: October 14, 2015.
Respectfully submitted,
Porter Hedges LLP
By:

/s/ Joshua W. Wolfshohl
Joshua W. Wolfshohl
State Bar No. 24038592
Aaron J. Power
State Bar No. 24058058
1000 Main Street, 36th Floor
Houston, Texas 77002
(713) 226-6000
(713) 228-1331 (fax)
Counsel to Dr. Stanislaw R. Burzynski

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument was duly served
by United States first class mail on Richard A. Jaffe, 770 L Street, Suite 960, Sacramento, CA
95616, on October 14, 2015.
/s/ Aaron J. Power
Aaron J. Power

6
5129921v1