Browning v. Navarro
| Decision Date | 05 December 1983 |
| Docket Number | Civ. A. No. 3-83-0380-H. |
| Citation | 37 BR 201 |
| Parties | Jane H. BROWNING, Individually and as Co-Independent Executrix of the Estate of William W. Browning, Jr., Deceased, et al., Plaintiffs, v. Don NAVARRO, Individually and as Trustee For Pat S. Holloway, et al., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Michael W. Anglin, Passman, Jones, Andrews, Holley & Co., Dallas, Tex., Lenard M. Parkins, Sheinfeld, Maley & Kay, Houston, Tex., R. Jack Ayres, Jr., Dallas, Tex., for plaintiffs.
Timothy J. Vineyard, Hunter, Vineyard, Drake & Miller, Dallas, Tex., for defendant Navarro.
This case is before the Court on Plaintiffs' Motion for Partial Summary Judgment, Brief and Appendices in Support, filed June 23, 1983; Trustee's Response, Trustee's Motion for Summary Judgment, Brief, and Evidence, filed August 2, 1983; Pat Holloway's Response, Motion for Partial Summary Judgment, and Brief, filed August 2, 1983; Plaintiffs' Reply and Response, filed August 22, 1983; Trustee's Brief in Response, filed September 13, 1983; Pat Holloway's Reply, filed September 27, 1983; Plaintiffs' Final Reply, filed October 5, 1983; and Trustee's Reply, filed October 14, 1983.
On September 12, 1979, the Plaintiffs ("Brownings") initiated a suit against Humble Exploration Co., Inc. ("Humble"), Pat Holloway ("Holloway") and others in the 193rd Judicial District Court of Dallas County, Texas. This case was styled Jane H. Browning, et al. v. Pat S. Holloway, et al., Cause No. 79-9623-L, hereinafter referred to as the "1979 case" or the "state court case". (Plaintiffs' Appendix A, Item 1; Trustee's Exhibit 1). In the state court case, the Brownings claimed, inter alia, that they were equitable owners of substantially all the assets of Humble and Holloway. Specifically, the Brownings sought to impose a constructive trust on the state court defendants' assets, to collect actual and exemplary damages, and to appoint an interim receiver.
On November 19, 1979, Humble and Holloway filed voluntary bankruptcy petitions under Chapter 11 of the United States Bankruptcy Code. The petitions were assigned bankruptcy numbers BK 379-00664-G and BK 379-00665-G respectively. (Trustee's Exhibits 2 and 3).
On November 21, 1979, the Brownings initiated a suit against Sterling Pipeline Company in the 191st Judicial District Court of Dallas County, Texas. This case was styled Jane Browning, et al. v. Sterling Pipeline Company, Cause No. 79-12292-J. (Trustee's Exhibit 4). In the Sterling case, the Brownings alleged that Sterling was a wholly owned subsidiary of Humble, or, alternatively, controlled by Holloway, and that Sterling Pipeline Company was subject to the constructive trust sought by the Brownings in the initial 1979 state court case.
On November 19, 1979, Humble and Holloway removed the state court cases to the bankruptcy court pursuant to 28 U.S.C. § 1478(a). (Trustee's Exhibit 6).
On January 18, 1980, the Bankruptcy Court entered its "Order Remanding Causes of Action and Modifying Automatic Stay". (Plaintiffs' Appendix A, Item 8; Trustee's Exhibit 10). The Bankruptcy Court's Order specifically provides that:
Cause No. 79-9623-L, styled Jane Browning, et al. v. Pat S. Holloway, et al., and Cause No. 79-12292-J/L, styled Jane Browning, et al. v. Sterling Pipeline Company, be and hereby are remanded to the 193rd Judicial District Court of Dallas County, Texas, pursuant to the terms set out in the annexed Stipulation and Agreement as amended; and it is further ORDERED, ADJUDGED AND DECREED that the automatic stay provisions of Section 362 of the Bankruptcy Code are modified so as to permit the remand of said causes of action and the trial of same pursuant to the terms of the annexed Stipulation and Agreement as amended.
The document annexed to the Bankruptcy Court's Order is entitled "Stipulation and Agreement on Manner in Which Controversy Shall Be Heard, Determined and Liquidated", and paragraphs one and two thereof specifically provide that:
Paragraph 3 of the annexed Stipulation provides that:
3. The order of the Bankruptcy Court remanding said consolidated cause to the state court for trial shall recite that such remand is conditional upon and shall only take effect upon the final assignment of said consolidated cause as prescribed in paragraphs 1 and 2 above. In the event that the BROWNING INTERESTS and Debtors are unable to obtain the assignment of said consolidated cause as prescribed in paragraphs 1 and 2 above, then in that event, the remand of said consolidated cause shall not take effect and the Bankruptcy Court shall retain jurisdiction over said cause which shall proceed to trial in the Bankruptcy Court before a jury.
Following remand, the two state court cases, Cause No. 79-9623-L and Cause 79-12292-J were consolidated as Cause No. 79-9623-L. (Trustee's Exhibit 5). On the same day, January 21, 1980, Judge Hugh Snodgrass of the 193rd District Court entered an "Order to Appoint Retired District Judge", which requested Presiding Judge Peurifoy to assign Cause No. 79-9623-L to a retired District Judge, (Trustee's Exhibit 11); the case was assigned by Judge Peurifoy to Judge Charles E. Long, a retired state district judge. Judge Long promptly ordered that a prior settlement agreement between the parties to the state court case be enforced. On appeal, the Court of Civil Appeals of Texas, Dallas, reversed and remanded the case for jury trial. Browning v. Holloway, 620 S.W.2d 611 (Tex.Civ.App. —Dallas), writ ref'd n.r.e. per curiam, 626 S.W.2d 485 (Tex.1981).
Upon remand for trial, the case, viz. No. 79-9623-L, was assigned to Judge Fred Harless, a retired state district judge. Judge Harless ordered a separate trial on the settlement agreement and entered an instructed verdict for the Brownings that the prior settlement agreement was unenforceable and directed that the case proceed to trial on the merits. (Plaintiffs' Appendix A, Item 10; Trustee's Exhibit 12).
On May 27, 1982, a lawsuit was filed in Judge Dee Brown Walker's 162nd Judicial District Court of Dallas County, Texas, styled Fairway Land Company, et al. v. Humble Exploration Company, Inc., et al., Cause No. 82-5742-I (). (Plaintiffs' Appendix A, Item 11; Trustee's Exhibit 13). The plaintiffs in the Fairway case were investors who claimed that Holloway and Humble wrongfully shut-in some 151 producing oil and gas wells jointly owned by the investors and Humble. The Fairway plaintiffs also wanted the state court to appoint a receiver for Humble's assets. The Brownings were named as defendants in the Fairway case since they claimed to own some interest in Humble's property.
On May 28, 1982, Humble filed a complaint in Bankruptcy Court to invoke the automatic stay and enforce the portion of the Bankruptcy Court's January 1980 Order which forbade appointing a receiver over Humble's assets. (Plaintiffs' Appendix A, Item 13; Trustee's Exhibit 15). Also on May 28, 1982, a receivership was imposed by the 162nd District Court on the assets of Humble and Holloway in the Fairway case. (Plaintiffs' Appendix A., Item 17).
On June 4, 1982, the Bankruptcy Court entered its Order of Abstention and Dismissal of Adversary Proceeding, specifically stating:
ORDERED, ADJUDGED AND DECREED (1) that this Court abstains in favor of the courts of the State of Texas with regard to the litigation now pending as Cause No. 82-5742-I in the 162nd District Court and with regard to all disputes relating to the issues raised in such litigation, including disputes or claims relating to any alleged breaches of Stipulations and Agreements heretofore approved and confirmed by this Bankruptcy Court by reason of or relating to such litigation; (2) that this Court expressly disassociates itself from the appointment of any Receiver appointed by the State Court, from his accountant or any of his employees, and all of the responsibility for their actions or failures to act in the proper administration of the properties of the parties shall be the sole responsibility of the State Court; (3) that the relief sought in Debtor\'s Complaint be denied without further action; and (4) that this Adversary Proceeding be and hereby is dismissed.
(Plaintiffs' Appendix A, Item 16; Trustee's Exhibit 16).
There then ensued a somewhat dizzying sequence of state court orders. On June 7, 1982, Holloway and Humble filed a motion in the 193rd District Court where the 1979 case was pending before retired Judge Harless to consolidate that case (Cause No. 79-9263-L) and the Fairway case (Cause No. 82-5742-I) before Judge...
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