In re Amr Corp., Case No. 11-15463 (SHL)
| Decision Date | 28 January 2015 |
| Docket Number | Case No. 11-15463 (SHL) |
| Parties | In re: AMR CORPORATION, et al., Reorganized Debtors. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
NOT FOR PUBLICATION
(Confirmed)
APPEARANCES:
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
By: Stephen Karotkin, Esq.
Alfredo R. Perez, Esq.
Stephen A. Youngman, Esq.
P.O. Box 190148
Miami, FL 33119
Before the Court is the objection of the above-captioned reorganized debtors (collectively, the "Debtors" or "American") to the proof of claim filed by Stephen C. Davidson in the Debtors' Chapter 11 cases. The Debtors argue that Mr. Davidson's proof of claim is barred by res judicata. For the reasons set forth below, the Debtors' objection is granted and Mr. Davidson's claims are disallowed and expunged.
Mr. Davidson is a former employee of American who filed a claim for $16,466,000 in damages arising out of his employment. See Ex. A to Debtors' Supplement to Objection to Proofof Claim No. 7670 Filed by Stephen Davidson (the "Debtors' Supplement") [ECF No. 12302]. Three incidents are central to his proof of claim. (Hr'g Tr. 36:18-43:10, Dec. 4, 2014) [ECF No. 12371]. First, he allegedly suffered work-related injuries on July 8, 1999, after being "subjected to an act of assault and battery by his training instructor," Tom Streff, during a captain simulator training (the "First Incident").1 Mr. Davidson complains of a second incident on September 19, 2002, where the same training instructor aggressively shook his hand during arbitration proceedings on Mr. Davidson's termination2 in late 1999 (the "Second Incident").3 As a result of those arbitration proceedings, Mr. Davidson was reinstated at American in September of 2004. (Hr'g Tr. 41:8-9).4 Finally, Mr. Davidson was allegedly assaulted and battered again, onOctober 19, 2004, by the same training instructor, in the lobby of American's flight academy (the "Third Incident").5
In January of 2002, after the First Incident, Mr. Davidson filed a civil complaint against American through his legal counsel. Davidson v. Am. Airlines, Inc., Fla. Miami-Dade County Ct., Case No. 02-01208-CA-20 (the "Original Florida Complaint").6 On October 31, 2005, after the Second and Third Incidents, he filed an amended complaint in the same case through legal counsel (the "Amended Florida Complaint").7 The Amended Florida Complaint asserted four causes of action. The first two causes of action were for race discrimination and retaliation under the Florida Civil Rights Act. The second two causes of action were for negligent hiring and supervision, and vicarious liability for intentional acts by an employee, Mr. Streff, during Mr. Davidson's training and employment with American. Amended Florida Complaint, ¶¶ 35-63.
American moved for summary judgment on all counts asserted in the Amended Florida Complaint. On November 20, 2006, the state court granted American's motion for summary judgment as to Counts I, III, and IV.8 The court denied American's motion for summary judgment as to Count II. On April 2, 2007, the jury in the Florida state court action found thatAmerican had not unlawfully discharged Mr. Davidson in violation of the FCRA.9 Thus, Mr. Davidson did not prevail on any of his asserted claims. On appeal, the Third District Court of Appeal for the State of Florida unanimously affirmed the lower court's decisions. Davidson v. Am. Airlines, Inc., Nos. 3d07-2063, 3D07-1901, 3D08-234 (Fla. 3d Dist. Ct. App. April 29, 2009).10 Mr. Davidson did not seek any further appeal or review. Debtors' Supplement, ¶ 11.
Mr. Davidson also filed multiple grievances with American and the Allied Pilots Association. In 2009, Mr. Davidson filed a grievance to obtain additional employee benefits that he thought would have been awarded in his earlier termination arbitration had American provided all the information that he alleges should have been provided. (See Hr'g Tr. 47:13-20).11 Ultimately, the grievance initiated in 2009 was submitted to a Pre-Arbitration Conference in 2010.12
In November of 2011, the Debtors filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. [ECF No. 1]. On July 12, 2012, Mr. Davidson filed a proof of claim against the Debtors in the amount of $16,466,000, listed on the Debtors' claims register as Claim No. 7670 (the "Proof of Claim"). The Proof of Claim seeks six categories of damages that Mr. Davidson describes as follows:
1. Loss Salary (22 years of captains pay. Refer to Exhibit #: 34. These are
similarly situated AA pilot and the document was generated and provided AA -
conservative estimate at $175,000 per year).
2. Loss Retirement (based on what recent AA pilot retirees have received who
had a 32 year pilot career at AA. If my career was uninterrupted, I would have
received the same).
$2,000,000
4. Loss of Excellent Health.
$2,000,000
5. AA Long Term Disability Benefits (LTD) still due. 22 yrs. From October 4th
1999 (date AA Corporate Medical Director Thomas Bettes MD determined I was
disabled - see exhibit 4, 17 and 27) to the mandatory retirement age of 65 on
September 24th, 2021, minus the 6.5 yrs. of AA LTD received.
$1,116,000
6. Loss of Happiness / Enjoyment of Life Or whatever amount the judge
determines to be fair.
$16,466,000
See Ex. A to Debtors' Supplement, Letter from Stephen C. Davidson, dated July 11, 2012.
In December of 2012, the Court entered an order authorizing the Allied Pilots Association and American to enter into a new collective bargaining agreement. Order Approving the New Allied Pilots Association Collective Bargaining Agreement, December 19, 2012. [ECF No. 5800]. That order also approved related settlement agreements between the Allied Pilots Association and American regarding the grievance of union member pilots. All grievances that were not specifically listed in a certain settlement letter were purported to be "completely extinguish[ed]" as part of the settlement. See Ex. L to Debtors' Supplement, ¶ 1. Mr. Davidson's grievance was not specifically listed. See id.
On May 22, 2014, the Debtors filed the 154th Omnibus Objection to Claims, seeking to expunge the Proof of Claim. [ECF No. 12048]. Mr. Davidson filed a response on June 16, 2014 [ECF No. 12090], seeking additional documents and information, and referencing his "2-pageletter explaining [his] claim along with a document package of 97 pages and 36 exhibit groups." [ECF No. 12090]. On June 26, 2014, the Debtors filed the Omnibus Reply to Responses to Debtors' 154th Omnibus Objection to Claims [ECF No. 12136] (the "Debtors' Reply"). On October 21, 2014, the Debtors filed the Debtors' Supplement, with extensive documentary evidence regarding Mr. Davidson's prior litigation in Florida state court.
On November 19, 2014, Mr. Davidson filed a request for the production of documents and information. [ECF No. 12337].13 The Court issued a memorandum endorsed order, notifying the parties that they could address Mr. Davidson's request at the upcoming hearing. [ECF No. 12338]. Around November 21, 2014, the Court received a voluminous box of documents and medical records from Mr. Davidson. On December 4, 2014, the Court held a hearing on the Debtors' objection. Mr. Davidson appeared and argued on a pro se basis.
The doctrine of res judicata is meant to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." See Allen v. McCurry, 449 U.S. 90, 94 (1980). "It is [well] settled that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered." In re AMR Corp., 491 B.R. 372, 376 (Bankr. S.D.N.Y. 2013) (quoting Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)). Under Florida law, the general "foundation of res judicata is that a final judgment in a court of competent jurisdiction is absolute and settles all issues actually litigated in a proceeding as well as those issues that could have been litigated."Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419, 425 (Fla. 2013) (internal citations omitted). Specifically:
A judgment on the merits rendered in a former suit between the same parties . . . upon the same cause of action, by a court of competent jurisdiction, is conclusive not only as to every matter which was offered and received to sustain or defeat the claim, but as to every other matter which might with propriety have been litigated and determined in that action.
Id. (internal citations omitted). Under Florida law, summary judgments may be given res judicata effect. See Brescher v. Pirez, 696 So. 2d 370, 375 (1997) (); see also Bazile v. Lucent Techs. 403 F. Supp. 2d 1174, 1180 (S.D. Fla. 2005) ( ) (citing Exhibitors Poster Exch., Inc. v. Nat'l Screen Serv. Corp., 517 F.2d 110 (5th Cir. 1975)).14
Accordingly, res judicata will apply where there is an earlier decision that is (1) a final judgment on the merits, (2) by a court of competent...
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