Tringali v. Hathaway Machinery Co., Inc., s. 85-1711

• Decision Date: 30 June 1986
• Docket Number: 85-1830,Nos. 85-1711,s. 85-1711
• Citation: 796 F.2d 553
• Parties: 15 Collier Bankr.Cas.2d 273, Bankr. L. Rep. P 71,218 Domenico TRINGALI, et al., Plaintiffs, Appellees, v. HATHAWAY MACHINERY COMPANY, INC., Defendant, Appellant. (Two Cases).
• Court: U.S. Court of Appeals — First Circuit

Page 553

796 F.2d 553

15 Collier Bankr.Cas.2d 273, Bankr. L. Rep. P 71,218

Domenico TRINGALI, et al., Plaintiffs, Appellees, v. HATHAWAY MACHINERY COMPANY, INC., Defendant, Appellant. (Two Cases).

Nos. 85-1711, 85-1830.

United States Court of Appeals,

First Circuit.

Argued March 3, 1986.

Decided June 30, 1986.

Timothy R. McHugh, with whom Hoch & Flanagan, P.C., Boston, Mass., was on brief, for defendant, appellant Hathaway Machinery Co., Inc. in No. 85-1711.

William F. Looney, Jr., with whom Richard J. Grahn, Karen L. Bisaccio, and Looney & Grossman, Boston, Mass., were on brief, for defendant, appellant Hathaway Machinery Co., Inc. in No. 85-1830.

Michael B. Latti, with whom William J. Griset, Jr. and Latti Associates, Boston, Mass., were on brief, for plaintiffs, appellees Domenico Tringali et al. in No. 85-1711.

Craig M. Brown, with whom Richard J. Shea, Robert P. Powers and Melick & Porter, Boston, Mass., were on brief, for plaintiff, appellee Rose's Oil Service, Inc. in No. 85-1711.

Robert L. Athas and Flash & Athas, Boston, Mass., on brief, for plaintiff, appellee Gloucester Marine Railways, Inc. in No. 85-1711.

Paul P. Daley, with whom Lisa A. Miller, Hale and Dorr, Michael B. Latti and Latti Associates, Boston, Mass., were on brief, for plaintiffs, appellees Domenico Tringali, et al in No. 85-1830.

Before COFFIN and BREYER, Circuit Judges, and MALETZ, ^* Senior Judge.

BREYER, Circuit Judge.

These two appeals arise out of an accident on a fishing boat. Domenico Tringali, the boat's master, was using a winch with a line wrapped around it to pull a net filled with fish. The line became tangled around the spinning winch shaft, the free end whipped around his leg, and it pulled him into the mechanism, mangling his leg. He sued Hathaway, the winch manufacturer. The district court found that Hathaway should have provided a cover for the shaft and a more accessible safety brake; it awarded Tringali and his family about $1 million in damages. Hathaway appeals the lawfulness of the district court's judgment in respect to liability. After examining the record, we find that judgment lawful.

As a result of the large damage award, Hathaway filed a Chapter 11 bankruptcy proceeding in the bankruptcy court. At Tringali's request, the district court removed a portion of the proceeding from the bankruptcy court. 28 U.S.C. Sec. 157(d) (Supp. II 1984). It then lifted the Bankruptcy Code's "automatic stay" of other proceedings, 11 U.S.C. Sec. 362(d) (1982 & Supp. II 1984), in order to allow Tringali to bring a state court action to obtain the proceeds of Hathaway's $500,000 liability insurance policy. Hathaway appeals from the order lifting the stay. We have reviewed the rather complicated legal question that the "stay-lifting" order raises, and we conclude that the stay should have remained in place.

We shall discuss each appeal in turn.

I

Hathaway's tort suit appeal consists of a series of challenges to district court determinations as to credibility, to its findings of fact, or to its judgments about 'reasonableness.' Since the power to make these decisions rests primarily with the district court, not with us, Hathaway has an uphill battle. Fed.R.Civ.P. 52(a); Anderson v. City of Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985); Solomon v. Warren, 540 F.2d 777, 784 (5th Cir.1976), cert. dismissed, 434 U.S. 801, 98 S.Ct. 28, 54 L.Ed.2d 59 (1977). After examining the record, we have concluded that the challenged court findings have adequate evidentiary support. Since the appeal raises no significant point of law, we see no reason to describe the tort case at length, and we shall simply summarize our reasons for rejecting Hathaway's arguments.

1. Hathaway says that the district court was wrong in finding it failed to cover the port winch shaft. It says it normally covers winch shafts; indeed, it says it covered the shaft on the starboard side of the boat in question. So, it argues, the lack of a cover on the portside shaft was not its doing. But, Tringali provided two witnesses who examined the shaft after the event and (reasonably) concluded Hathaway had never covered it; a schematic drawing of the winch also shows no cover on the portside shaft. This evidence is sufficient to support the district court's finding that Hathaway failed to provide a cover when it installed the winch in 1967.

2. Hathaway attacks the credibility of Tringali's expert--a naval architect named Gerrit Van Dissel. Hathaway points to what it says are inconsistencies in his testimony; it adds that Van Dissel's version about how the accident occurred represents a physical impossibility. Any inconsistencies, however, concern relatively unimportant matters. We have tried to understand Hathaway's "physical impossibility" argument by examining the record, by looking at photographs, and by reading the transcript of the trial; but, after doing so, we have failed to understand what significant feature of Van Dissel's account rests upon any physical impossibility. The trial court credited Van Dissel; it disbelieved Hathaway's expert. That being so, its findings about causation and negligence, which basically rest on Van Dissel's account, are lawful.

3. Hathaway says that Tringali is partly responsible for the accident himself, either because he negligently got his foot caught in the line or because he should 4. Hathaway adds that the boat's owner (a corporation) should have been aware of the dangers, and that it was more than 5 percent negligent in failing to correct them. The record evidence, however, adequately supports the district court's apportionment of 95 percent to Hathaway and 5 percent to the boat's owner.

have recognized (and corrected) the dangers inherent in the uncovered shaft and the too-distant safety brake. The district court, however, found explicitly to the contrary; it found that Tringali acted properly at all times, that he was not aware of the inherent dangers, and that his lack of awareness was not itself negligent. The record provides no basis for concluding that these findings are clearly erroneous or unreasonable. The cases Hathaway cites, Peymann v. Perini Corp., 507 F.2d 1318 (1st Cir.1974), cert. denied, 421 U.S. 914, 95 S.Ct. 1572, 43 L.Ed.2d 780 (1975); and Walker v. Lykes Bros. S.S. Co., 193 F.2d 772 (2d Cir.1952), are distinguishable because in these cases the injured plaintiffs knew of the dangerous conditions and had a duty to correct them.

5. Finally, Hathaway says that Rose's Oil Service, Inc., a third party defendant, should have corrected the dangerous conditions when it repaired the winch in 1982. Tringali, however, asked Rose's to repair specific defects (which it did); he did not employ Rose's to give general advice about the winch or to repair each and every dangerous condition. That being so, the district court's finding that Rose's was not negligent has adequate record support.

We reject Hathaway's remaining arguments and affirm the district court's judgment.

II

Hathaway's second appeal arises out of its Chapter 11 Bankruptcy Code proceeding. Tringali fears that this proceeding will interfere with its efforts to obtain the proceeds of Hathaway's $500,000 liability insurance policy. The plaintiff in another tort suit against Hathaway, Correia v. Hathaway Machinery Co., Case No. 85-3208-W, may want to obtain some of this insurance money. Tringali believes that, in the absence of the bankruptcy proceeding, he could file a state court action, and (as an earlier judgment creditor) receive all the insurance money. But, Tringali also realizes that the Bankruptcy Code imposes an "automatic stay" of other court proceedings. That stay would prohibit the state court action. Consequently, Tringali asked the district court to withdraw a portion of Hathaway's bankruptcy proceedings from the bankruptcy court, 28 U.S.C. Sec. 157(d), and to lift the "automatic stay" so that Tringali could bring the state court action, 11 U.S.C. Sec. 362(d). The district court did so. Hathaway now appeals the order lifting the stay.

The appeal raises five legal questions: 1) Is the district court order lifting the stay appealable? 2 Is the district court order withdrawing a portion of Hathaway's bankruptcy proceeding from the bankruptcy court void because of the parties' failure to follow local district court rules governing the assignment of cases to individual judges? 3) Is a liability insurance policy "property" of Hathaway's "estate," and thus subject to the "automatic stay?" 4) Does Hathaway have standing to complain of the "stay-lifting" order? 5) Did the district court have sufficient "cause" to lift the stay? 11 U.S.C. Sec. 362(d). We shall discuss each question in turn.

1. As an initial matter, we find the district court's order lifting the automatic stay is an appealable "final" order. See 28 U.S.C. Sec. 1291 ("The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States ...."). For one thing, the district court took jurisdiction of only one aspect of Hathaway's bankruptcy case, namely, that aspect dealing with the liability insurance policy. It did so for only one purpose, namely, to consider Tringali's request to lift the stay so it could bring a state court proceeding. And, since the district court lifted the stay, nothing remains to be done in respect to that aspect--the For another thing, in the bankruptcy context, the word "final" has a somewhat special meaning. It is not limited to the single final order issued at the very end of an entire bankruptcy case--an order that ultimately disposes of all the debtor's assets on the basis (perhaps) of the results of many individual proceedings and controversies taking place over many years within the context of the overall bankruptcy case itself. Rather, after examining the relevant legislative and judicial history, we previously concluded that a " 'proceeding' within a...