Ellis v. Westinghouse Elec. Co.

• Decision Date: 05 August 2020
• Docket Number: 2:18-cv-01442
• Parties: TIMOTHY ELLIS, Plaintiff, v. WESTINGHOUSE ELECTRIC COMPANY, LLC, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

TIMOTHY ELLIS, Plaintiff, v. WESTINGHOUSE ELECTRIC COMPANY, LLC, Defendant.

2:18-cv-01442

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

August 5, 2020

OPINION

Mark R. Hornak, Chief United States District Judge

The matter before the Court presents a Gordian Knot of bankruptcy law entangled with an employment discrimination claim, spanning different courts in two jurisdictions, and the tension between those legal frameworks and tribunals. Boiled down, the Court must resolve the Defendant Westinghouse Electric Company's ("WEC" or "the Defendant") Motion for Summary Judgment, which argues that Timothy Ellis' ("the Plaintiff") age discrimination claims asserted in this Court were discharged by the Defendant's Chapter 11 bankruptcy proceeding in the Southern District of New York. (ECF No. 31.) For the reasons that follow, the Court will deny the Defendant's Motion.¹

I. PROCEDURAL POSTURE

Beginning with the Defendant's bankruptcy proceedings, WEC filed its Chapter 11 bankruptcy petition in March of 2017 in the United States Bankruptcy Court for the SouthernDistrict of New York ("the bankruptcy court"). In re Westinghouse Electric Co., LLC, No. 17-10751-MEW (Bankr. S.D.N.Y. filed Mar. 29, 2017), ECF No. 1 [hereinafter "WEC Bankr."]. In June of that year, the bankruptcy court entered an order establishing a deadline for filing proofs of claims against WEC. Id., ECF No. 788. About two weeks later, WEC filed an affidavit of service with the bankruptcy court affirming that notice of the proofs-of-claim deadline was sent to, among others, potential creditors to include the Plaintiff. Id., ECF No. 881, Ex. F, at 166. Then in February 2018, the bankruptcy court entered notice of the hearing on confirmation for the bankruptcy reorganization plan ("the Plan") with procedures on how to file objections to the Plan. Id., ECF No. 2644. Notice of the same was served on potential creditors, including the Plaintiff. Id., ECF No. 2802, Ex. J, at 164. The Plan was confirmed on March 28, 2018, when the bankruptcy court entered its Findings of Fact, Conclusions of Law, and Order Confirming Modified Second Amended Joint Plan of Reorganization ("Confirmation Order"). Id., ECF No. 2988. The Confirmation Order and the Plan appended to it set several conditions precedent for the Plan's Effective Date. Id., ECF No. 2988-1, at 41-42. After those conditions were met several months later, a period of time which is of critical importance in the matter before this Court, notice of the occurrence of the Effective Date was filed on August 1, 2018. Id., ECF No. 3705. As before, this notice was also served on potential creditors, including the Plaintiff. Id., ECF No. 3724, Ex. D, at 269.

With respect to the matter here, the Plaintiff filed his Complaint on October 26, 2018. (ECF No. 1.) In January 2019, the Parties agreed to stay the case pending exhaustion of administrative remedies for the Plaintiff's supplemental state law discrimination claim. (ECF No. 8.) The case was not reopened until July 25, 2019. (ECF No. 15.) The Defendant filed its Answer and the Court held an initial case management conference in September 2019, which stalled almost immediatelywhen the Defendant for the first time raised during that conference the bankruptcy issue now before the Court. (ECF Nos. 18, 24.) The instant Motion for Summary Judgment was filed a short time later in November 2019. (ECF No. 31.)

A week after the Motion was filed, the Defendant filed Notice on the docket alerting the Court that it had also filed a parallel motion in the bankruptcy court in New York, seeking to enjoin the Plaintiff from prosecuting his claim against WEC in this Court. (ECF No. 35.) This resulted in an emergency motion by the Plaintiff asking this Court to stay the "duplicative" bankruptcy motion in the New York bankruptcy court. (ECF No. 36.) After this Court held a hearing on the issue, the Defendant voluntarily continued the proceeding in the bankruptcy court until January 22, 2020. (ECF No. 40.) Accordingly, the Court dismissed the Plaintiff's emergency motion without prejudice as moot and set a briefing schedule to address the Defendant's Motion for Summary Judgment. (ECF No. 41.) Upon receiving a Response, Reply, and Sur-Reply, the Court heard oral argument on January 15, 2020. (ECF No. 54.) During argument, the Court advised the Defendant that it would not acquiesce to the deadline the Defendant had effectively set for the Court to decide the matter in light of the short fuse resulting from the parallel proceedings in S.D.N.Y. The Court stated its intention to enjoin those proceedings if necessary to provide this Court a reasonable amount of time to address the Motion here.² The Defendant thereafter filed a Notice that the proceedings in the New York bankruptcy court were voluntarily continued indefinitely. (ECF No. 56.) Finally, after supplemental briefing on certain discrete issues, this matter became ripe for disposition. (ECF Nos. 57-60.)

II. LEGAL STANDARD

Summary judgment will be granted when there are no genuine issues of material fact in dispute and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). To withstand a summary judgment motion, an issue of fact in dispute must be both genuine and material, i.e., one upon which a reasonable factfinder could base a verdict for the non-moving party and one which is essential to establishing the claim. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). When considering a summary judgment motion, the Court may not weigh the evidence or make credibility determinations. Id.

If the moving party carries its initial burden under Rule 56, the non-movant must identify "specific facts which demonstrate that there exists a genuine issue for trial." Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996) (citing Celotex, 477 U.S. at 323). They must respond "by pointing to sufficient cognizable evidence to create material issues of fact concerning every element as to which the nonmoving party will bear the burden of proof at trial." Simpson v. Kay Jewelers, Div. of Sterling, Inc., 142 F.3d 639, 643 n.3 (3d Cir. 1998). Where there are no disputed material facts and the question presented is one of pure law, the undisputed evidence must still be construed in the light most favorable to the non-movant. Rea v. Cincinnati Ins. Co., No. CIV.A. 3:13-21, 2014 WL 4198059, at *4 (W.D. Pa. Aug. 22, 2014).

The facts material to the Defendant's Motion are for the most part undisputed. While the Defendant denies all facts underpinning the Plaintiff's age discrimination claims, (see Answer, ECF No. 18), for purposes of the instant Motion the Defendant essentially argues that, even if the Plaintiff's claims are valid, he is barred from asserting them in this Court by virtue of the bankruptcy proceedings in New York. (ECF No. 32, at 9 n.7.) Thus, the Court is left to resolve thelegal question of whether the Plaintiff's employment discrimination claims in this Court are completely barred or discharged by the Defendant's bankruptcy.

III. STATEMENT OF THE FACTS

Some fourteen (14) months after WEC filed its bankruptcy petition and two (2) months after the Defendant's bankruptcy plan was confirmed by the bankruptcy court, the Plaintiff's employment with WEC was terminated on or about May 31, 2018. (Complaint, ECF No. 1, at 2.) As outlined above, the bankruptcy petition was filed on March 29, 2017, Plan was confirmed on March 28, 2018, and became effective by its terms on August 1, 2018. The Plaintiff's claim therefore arose post-petition, post-Confirmation and pre-Effective-Date.³ During the pendency of the bankruptcy action, the Defendant caused to be served on the Plaintiff three pertinent notices: (1) Notice of Deadline for Filing Proofs of Claim, served before the Plaintiff was fired; (2) Notice of Hearing on Confirmation of Plan and Procedures for Objecting to the Confirmation of Plan, also served before the Plaintiff's discharge from employment; and (3) Notice of Effective Date of the Plan, served after the Plaintiff was dismissed. See supra Procedural Posture, Part I (demonstrating that the affidavits of service included the Plaintiff's name as a recipient).

The first Notice of Deadline for Filing Proofs of Claim provided that a potential claimant, other than a "governmental unit" as defined by the Bankruptcy Code, must assert a prepetition claim by filing a Proof of Claim by September 1, 2017—the "General Bar Date." (ECF No. 34-2, at 3.) The second Notice of Hearing on Confirmation of Plan and Procedures for Objecting to the Confirmation of Plan provided that a "Confirmation Hearing" would occur on March 27, 2018, and detailed the procedures for voting and filing objections to the then-proposed bankruptcy plan.(ECF No. 34-4, at 3-5.) The Plan was later confirmed by the bankruptcy court on March 28, 2018. The Confirmation Order and the Plan set an Effective Date, which would be the date in the future when "all conditions to the effectiveness of the Plan set forth in Section 10 hereof have been satisfied or waived in accordance with the terms of the Plan." (ECF No. 34-7, § 1.60 [hereinafter "Plan"].) During this period, after the Plan was confirmed but before the Effective Date had occurred, the Defendant terminated the Plaintiff's employment. The third Notice of the Effective Date of the Plan was sent after the conditions precedent for the Effective Date had been met and the Effective Date had thus occurred. This Notice provided that the Effective Date of the Plan was August 1, 2018 and that "all requests for payment of Administrative Expense Claims must be filed and served on the Debtors no later than August 31, 2018"—the so-called "Administrative Expense Claims Bar Date." (ECF Nos. 34-8, at 3 (emphasis in original); 34-9, at 2; see also Plan, § 1.3 (defining the Administrative Expense Claims Bar Date as "the first Business Day that is 30 days following the Effective Date").) The...