In re Crozier Bros., Inc., Bankruptcy No. 84 B 20231.

Citation60 BR 683
Decision Date09 May 1986
Docket NumberBankruptcy No. 84 B 20231.
PartiesIn re CROZIER BROS., INC., Debtor.
CourtUnited States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York


Guazzo, Perelson, Rushfield & Guazzo, P.C., New York City, Reich and Reich, White Plains, N.Y. (Caesar C. Guazzo and Delia Guazzo, New York City, Lawrence R. Reich, White Plains, N.Y., of counsel), for debtor.

David Kramer, New York City, for Local 445, Chauffeurs, Teamsters & Helpers Westchester Co., New York, I.B.T.



The debtor has moved to rehear or reconsider this court's decision of August 19, 1985 which denied rejection of its collective bargaining agreement with Local Union No. 445 International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (the "Union") as of April 1, 1985. In re Crozier Bros., Inc., 52 B.R. 402 (Bankr.S.D.N.Y.1985).

The motion to rehear was made after the debtor filed its notice of appeal depriving the court of jurisdiction to hear it. The filing of a notice of appeal normally divests the lower court of jurisdiction to proceed with respect to the matters raised. Bialac v. Harsh Investment Corporation (In re Bialac), 694 F.2d 625 (9th Cir.1982); Crateo, Inc. v. Intermark, Inc. (In re Crateo, Inc.), 536 F.2d 862, 869 (9th Cir.1976), cert. denied, 429 U.S. 896, 97 S.Ct. 259, 50 L.Ed.2d 180 (1976); In re Emergency Beacon Corp., 58 B.R. 399, 402 (Bankr.S.D.N. Y.1986); First National Bank of Boston v. Overmyer (In re Overmyer), 53 B.R. 952, 954 (Bankr.S.D.N.Y.1985). On March 13, 1985 the District Court entered an order at the debtor's request permitting the debtor to apply to this court for a rehearing of its motion to reject the collective bargaining agreement.1

This court's previous decision holds that the debtor had failed to make a prima facie case for rejection of its collective bargaining agreement under the applicable standards of N.L.R.B. v. Bildisco & Bildisco, 465 U.S. 513, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984); see generally 52 B.R. at 404 (discussion of applicable standards).


At the hearing of the debtor's motion for a reconsideration of this court's prior decision, the debtor introduced testimony and exhibits in support of its motion. Three witnesses testified; Robert Crozier, the debtor's general manager, Neal Dorf, the debtor's accountant and Mr. Robert Drexler, the Union's business agent.

Mr. Crozier, who had testified at the first hearing, gave testimony as to events occurring prior to the first hearing and also as to actions that were undertaken as a response to the court's memorandum decision of August 19, 1985.

As to events antedating the first hearing, Mr. Crozier testified as follows:

(1) The actual number of full fledged Union members employed by the debtor was 3. The debtor also employed approximately 5 apprentices.

(2) He had taken a salary cut from $700 per week to $500 per week.

(3) Mr. Crozier testified for the first time that the debtor had unilaterally rejected the Union contract as of April 1, 1985 and had since then been compensating its employees in accordance with its last offer to the Union.

(4) The debtor had not paid pension and welfare benefits on behalf of its employees for work performed after April 1, 1985.

(5) The debtor's last offer to the Union included a "grandfather clause" which provided that long-time employees would be paid their present hourly salary but their pension and welfare payments and vacation and holiday time would be cut in accordance with the debtor's final offer.

(6) Newly hired employees would be paid an additional $2.25 per hour more than the debtor had originally offered to the Union.

(7) Various economies had been undertaken by the debtor including a reduction in the number of vehicles during the debtor's slow season.

(8) Money would be saved by the rejection of the contract.

(9) Except for a period in the beginning of this case the debtor had made a profit each year since filing the petition.

(10) Some competitors had higher rates of pay and some had lower rates than the debtor.

(11) Some competitors with higher rates of pay and some with lower rates had outbid the debtor for moving jobs and vice versa.

As to events postdating the trial and decision, Mr. Crozier testified as follows:

(1) The debtor's advertising budget had been cut by reducing the size of advertisements in the yellow pages of the telephone book.

(2) He had spoken to some people at certain competing moving companies and was informed as to their hourly rates of pay. Some competitors paid higher rates and others paid lower rates.

(3) The debtor has filed a plan of reorganization.

Mr. Dorf, the debtor's C.P.A., testified as to the financial history of the debtor since the petition, using figures taken from the financial statements which the debtor had been filing with the court. He testified that the debtor's labor and union costs varied between 55% to 78% of the debtor's total gross sales between 1979 and 1985 as follows:

                     1979 ................. 55%
                     1980 ................. 67 ½%
                     1981 ................. 65.4%
                     1982 ................. 72%
                     1983 ................. 78%
                     1984 ................. 68%
                     1985 ................. 60%

Mr. Dorf also testified that the debtor's labor and union costs amounted to between 30% and 44% of the debtor's percentage of total income between 1979 and 1985 as follows:

                     1979 ................. 32%
                     1980 ................. 33.7%
                     1981 ................. 34 ½%
                     1982 ................. 37.1%
                     1983 ................. 44.1%
                     1984 ................. 38.9%
                     1985 ................. 30.2%

Mr. Dorf further testified that the debtor's annual profit and loss figures for the years 1979 through 1985 would have been different if pension and welfare contributions made under the Union contract had not been required. The figures with pension and welfare payments included and, those excluding pension and welfare payments were as follows:

                With pension and welfare  Without pension and welfare
                1979    $ 3,823 profit         $12,000 profit
                1980      3,013 loss            16,000 profit
                1981     27,600 loss            19,000 loss
                1982      6,000 loss               500 profit
                1983     20,200 loss             9,000 profit
                1984     13,400 loss            10,000 profit
                1985        656 profit           4,700 profit

Mr. Robert Drexler, the Union's representative was called by the debtor as an adverse witness for the purpose of testifying as to the negotiations between the debtor and the Union, both prior to the April 1, 1985 rejection and thereafter. He also testified as to the rates of pay of various other competitors of the debtor as recited in Union contracts which were subpoenaed from the Union for this hearing.

The exhibits introduced into evidence were as follows:

(1) The contract for which approval of the rejection was sought.

(2) A booklet containing wage rates for the moving industry in the metropolitan area.

(3) The 1985 Yellow Pages for Westchester County, New York (to identify competitors of the debtor).

(4) Union contracts between Local 445 and several competitors of the debtor for the time period in question.

(5) The financial statements filed with this court since the inception of the case.

(6) Several pieces of correspondence between debtor or debtor's counsel and the Union regarding the negotiations surrounding the Union contracts rejection.

There was no testimony as to the effect of rejection on the debtor's employees other than Mr. Drexler's testimony that they just couldn't live on that amount of pay.

There was no testimony as to specific plans for hiring more employees at the lower rates of pay or as to any pension planned by the debtor if it received approval of its rejection other than a vague statement that the debtor could hire more people.

There was no testimony to the effect that reorganization would fail if rejection were not permitted.


The motion papers do not state the applicable rules under which the debtor moves for a rehearing. The debtor asserted at the close of the hearing of the motion that it had moved pursuant to Fed.R.Civ.P. 59 (which is made applicable in bankruptcy pursuant to Bankruptcy Rule 9023). The debtor's counsel did not brief the point.

A motion to rehear or reconsider will be construed as a motion to alter or amend a judgment under Fed.R.Civ.P. 59(e). See, National City Bank of Cleveland v. 6 & 40 Investment Group, Inc., (In re 6 & 40 Investment Group, Inc.), 752 F.2d 515 (10th Cir.1985); Bestron Corporation v. Eagle Comtronics, Inc., 720 F.2d 1019 (9th Cir.1983) (motion to reconsider made pursuant to local rules); Brown v. Wright, 588 F.2d 708, 710 (9th Cir.1978) (per curiam); Gainey v. Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express and Station Employees, 303 F.2d 716, 178 (3d Cir.1962); Hansen v. Finn, (In re Curry and Sorensen, Inc.), 57 B.R. 824, 827 (Bankr. 9th Cir. 1986).

Fed.R.Civ.P. 59(e) has a narrow reach whose purpose is that of granting to the court jurisdiction to rectify its own mistakes in the 10 day period following the entry of judgment. White v. New Hampshire Department of Employment Services, 455 U.S. 445, 450, 102 S.Ct. 1162, 1165, 71 L.Ed.2d 325, 330 (1982). Because the debtor also requested permission to supplement the record and, in light of the court's holding that the debtor had failed to establish a prima facie case, the motion will also be treated as a request under Fed.R. Civ.P. 52(b) for an amendment of the court's findings of fact. U.S. Gypsum Co. v. Schiavo Brothers, Inc., 668 F.2d 172, 180 (3d Cir.1981), cert. denied 456 U.S. 961, 102 S.Ct. 2038, 72 L.Ed.2d 485 (1982); 6A J. Moore, J. Lucas, Moore's Federal Practice ¶¶ 59.046 and 59.12.12 (1985 ed.).

The relevant portions of Fed.R.Civ.P....

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