In re AquaslideN'Dive Corp.
| Decision Date | 18 December 1987 |
| Docket Number | BAP No. CC-86-2089 VJMo,Bankruptcy No. LA 84-23505 CA. |
| Citation | 85 BR 545 |
| Parties | In re AQUASLIDE `N' DIVE CORPORATION, Debtor and Debtor in Possession. David M. and Marjorie GRZYBOWSKI, Appellants, v. AQUASLIDE `N' DIVE CORPORATION, Appellee. |
| Court | U.S. Bankruptcy Appellate Panel, Ninth Circuit |
Sandra Kennedy, Cannon & Dunphy, S.C., Milwaukee, Wis., for appellants.
James A. Hinds, Jr., Wood, Lucksinger & Epstein, Los Angeles, Cal., for appellee.
Before VOLINN, JONES and MOOREMAN, Bankruptcy Judges.
David M. and Marjorie Grzybowski appeal from an order disallowing their claim against Aquaslide "N" Dive Corporation (Aquaslide). We affirm.
On or about July 14, 1984, David Grzybowski, appellant, was severely injured as a result of sliding down a slide into his swimming pool. It is alleged that the slide in question was manufactured by the debtor, Aquaslide. Neither the briefs nor excerpts of record describe the accident, except to say that he hit his head on the bottom of the pool and was rendered quadriplegic. On or about October 7, 1985, David M. and Marjorie Grzybowski filed a personal injury and products liability claim in Milwaukee County in the state of Wisconsin against numerous parties, one of whom was Aquaslide. It was asserted that Aquaslide was negligent and designed, manufactured and sold an unreasonably dangerous product. Prior to that date, Aquaslide had filed a Chapter 11 petition in the United States Bankruptcy Court.
Mr. Grzybowski bought his slide in the spring of 1977 at the residential home of a man who had advertised his wares in the classified advertisements of Mr. Grzybowski's local newspaper. The slide was in a box which Mr. Grzybowski had not saved. In his deposition, he testified that he thought the box said "Slide `N' Dive." He also testified that he can no longer find the home of the man from whom he purchased the slide.
The slide in question contained no identification, no serial number, no manufacturer's name or other identifying marks which would designate a specific manufacturer. The Grzybowski's filed a proof of claim against Aquaslide in the amount of $27,000,000. Carl Meyer, President of Aquaslide and designer of the Aquaslide Duke Curve Slide, inspected the slide in question and compared it in minute detail to the slide manufactured by Aquaslide. In his declaration he states unequivocably that Aquaslide did not design, manufacture, sell, or distribute the slide in question.
Aquaslide filed an objection to the allowance of the claim of the Grzybowskis contending that there was no basis in law or fact for the claim. After reading the affidavits submitted by the parties and deposition of Mr. Grzybowski, the court disallowed the claim. The Grzybowskis appealed.
This case involves a core proceeding.1 The trial court was not liquidating or estimating contingent or unliquidated personal injury tort claims for purposes of distribution, but rather it was only estimating those claims for purposes of confirming a plan under Chapter 11. See Poole v. Greenwood Cemetery, Inc. (In re Poole Funeral Chapel, Inc.), 63 B.R. 527, 532 (Bankr.N.D.Ala.1986). The litigation to resolve an objection to a proof of claim is a contested matter and therefore Bankruptcy Rule 9014 is applicable to such litigation. Bankr. Rule 9014, Advisory Committee Note.
In the present case, the trial court decided to disallow the Grzybowski's claim against Aquaslide after reviewing the affidavits submitted by the parties. Bankruptcy Rule 9014 provides that Rule 7056 applies to contested matters. Under Bankruptcy Rule 7056 and Rule 56 of the Federal Rules of Civil Procedure a summary judgment can be granted when there are no issues of material fact and the moving party is entitled to prevail as a matter of law. Fed.R.Civ.P. 56(c). Here, the trial court decided that there was no issue of fact regarding whether Aquaslide manufactured the slide in question, and disallowed the claim. Although no party requested a grant of summary judgment, in essence that is exactly what the trial court did. Core proceedings are generally reviewed under the clearly erroneous standard. See In re Emergency Beacon Corp., 52 B.R. 979 (S.D.N.Y.1985), aff'd 790 F.2d 285 (2nd Cir.1986). However, since a summary judgment was given by the trial court we will follow the standard of review applicable to such decisions. Grants of summary judgment are reviewed de novo. Jackson Waterworks, Inc. v. Public Utils. Comm'n., 793 F.2d 1090, 1092 (9th Cir. 1986).
The proponent of a summary judgment motion bears a heavy burden to show that there are no disputed facts warranting disposition of the case on the law without trial. The standard for review was stated in In re Zupancic, 38 B.R. 754, 757 (9th Cir.BAP 1984) as follows:
However, for summary judgment to be denied, the nonmoving party cannot demonstrate that an issue of material fact exists by mere allegation or denial. The nonmoving party must present competent affidavits. Both supporting and opposing affidavits must be based on personal knowledge and the facts set forth therein must be admissible in evidence. Federal Rule of Civil Procedure 56 provides in pertinent part:
In the present case, Aquaslide submitted a declaration of its President, Carl Meyer, in support of its objection to the proof of claim. In his declaration, Mr. Meyer compares the slide in question in minute detail through the use of multiple photographs (which he took) and measurements to the Duke Curve Slide which he designed and which Aquaslide manufactures.2 He concludes unequivocably that the slide in question was not designed, manufactured, sold or distributed by Aquaslide. Based on the comparisons made by Mr. Meyer between the two slides, it is clear that the slide in question is similar to, but not an Aquaslide product.
The Grzybowskis submitted two affidavits in opposition to Aquaslide's motion objecting to the claim. If the trial court is to consider these as raising an issue of fact so as to preclude summary judgment, the affidavits must conform with the admissibility rules for summary judgment. They must be based on personal knowledge and set forth facts admissible in evidence. Fed.R. Civ.P. 56(e); see United States v. Hangar One, Inc., 563 F.2d 1155, 1157 (5th Cir. 1977). Here, there is an affidavit by the Grzybowskis' attorney and an affidavit by a person who saw photographs of the subject slide.
The affidavit by the Grzybowskis' attorney, William Cannon, is not based on personal knowledge, nor does Mr. Cannon make any statement to that effect. Rather, he incorporates Mr. Grzybowski's deposition by reference. In that deposition Mr. Grzybowski stated he thought the slide was manufactured by "Slide `N' Dive" according to the box in which the slide came. Since Mr. Cannon did not see the box, he has no personal knowledge as to what was printed on the box. Affidavits by attorneys which do not comply with the personal knowledge requirement cannot be used in opposition to a summary judgment motion. See Taylor v. Collins, 574 F.Supp. 1554, 1557 (E.D.Mich.1983); Mercantile Nat'l Bank at Dallas v. Franklin Life Ins. Co., 248 F.2d 57, 59 (5th Cir.1957); Commercial Union Ins. Co. v. Albert Pipe & Supply Co., Inc., 484 F.Supp. 1153, 1157 (S.D.N.Y. 1980). An affidavit not based on personal knowledge is to be disregarded when considering a summary judgment motion. Chan Wing Cheung v. Hamilton, 298 F.2d 459, 460 (1st Cir.1962). The affidavit of Mr. Cannon is not based on personal knowledge and cannot be considered by a court evaluating a summary judgment motion. Since it is not admissible, the affidavit cannot be used to raise an issue of fact. See United States v. Hangar One, Inc., 563 F.2d at 1157.
The second affidavit submitted in opposition to the objection to claim is by Robin Bertsch. This affidavit was also incorporated by reference in Mr. Cannon's affidavit. Mr. Bertsch is Executive Vice President of Fort Wayne Pools, Inc., a codefendant with Aquaslide in the state...
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