In re Evans Products Company, Case No. 85-00512-BKC-AJC (Bankr. S.D.Fla. 8/6/2009), Case No. 85-00512-BKC-AJC.
| Decision Date | 06 August 2009 |
| Docket Number | No. 85-00519-BKC-AJC.,Case No. 85-00512-BKC-AJC.,Adv. Pro. No. 08-01643-AJC.,85-00519-BKC-AJC. |
| Parties | In re: EVANS PRODUCTS COMPANY, et al., Reorganized, Chapter 11, Debtors. JELD-WEN, INC., f/k/a Grossman's Inc., Plaintiff, v. MARY VAN BRUNT and GORDAN VAN BRUNT, Defendants. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida |
This matter is before the Court for decision on cross-motions for summary judgment filed by JELD-WEN, inc. f/k/a Evans Products Company ("JELD-WEN") and Gordon Van Brunt, individually and on behalf of the Estate of Mary Van Brunt (the "Van Brunts") upon JELD-WEN'S WEN's Complaint for 1) Determination that Defendants' Claims Have Been Discharged, 2) Permanent Injunction Enjoining Defendants' Prosecution of Claims Against JELD-WEN, Inc., and 3) Award of Damages (the "Complaint").
Mary Van Brunt died of mesothelioma on August 10, 2008 . She was diagnosed with the disease in the Spring of 2007, after first manifesting symptoms in the Fall of 2006 (Dkt. No. 21, Ex. B. at 6).
Seeking legal redress for their injuries relating to Mary Van Brunt's mesothelioma, the Van Brunts filed suit in May, 2007 against, inter alios, JELD-WEN in the Supreme Court of the State of New York, County of Erie (the "State Court Action") (Dkt. No. 19, Ex. D). In the State Court Action, the Van Brunts allege that Mary Van Brunt purchased asbestos containing products from Grossman's Inc. ("Grossman's") beginning in the Spring of 1977, and through the use of such products was exposed to asbestos fibers (Id). The Van Brunts allege that this exposure resulted in the mesothelioma from which Mary Van Brunt died (Id.).
JELD-WEN is a successor to a two-time debtor. On March 11, 1985, Evans Products Company ("Evans Products") and several of its subsidiaries (including Grossman's) filed for relief in this Court under Chapter 11 of the Bankruptcy Code (the "Florida Bankruptcy") (Dkt. No. 20, Ex. E at 7). The debtors filed a plan of reorganization, which was confirmed by order of this Court on July 2, 1986 (Dkt. No. 20, Ex. G). Pursuant to the debtors' plan, reorganized Evans Products took the name of its subsidiary, Grossman's, Inc., upon the effective date of the plan (Dkt. No. 20, Ex. E at 34).
Approximately 11 years later, on April 7, 1997, Grossman's again filed for relief under Chapter 11 of the Bankruptcy Code (Dkt. No. 21, Ex. B at 3). This time, however, it filed in the United States Bankruptcy Court for the District of Delaware (the "Delaware Court") (Id). A joint plan of reorganization for Grossman's was confirmed by the Delaware Court on December 9, 1997 (Id.). Pursuant to Grossman's Delaware plan of reorganization, JELD-WEN acquired a majority interest in the stock of Grossman's (Dkt. No. 19, Ex. C), and ultimately acquired the balance of the Grossman's stock, merging the companies in March 1999, with JELD-WEN surviving (Id.). It is uncontested that JELD-WEN is the successor-in-interest to Evans Products.
Faced with the Van Brunts' State Court Action, JELD-WEN first sought relief from the Delaware Court, requesting a ruling by that Court that the State Court Action had been discharged in Grossman's 1997 Delaware bankruptcy case (Dkt. No. 21, Ex. B at 2). On May 9, 2007, JELD-WEN requested the Delaware Court to reopen the Delaware bankruptcy case (Dkt. No. 21, Ex. B at 6). This relief was granted and JELD-WEN filed its Complaint for (1) Permanent Injunction Enjoining Defendants' Prosecution of Claims Against JELD-WEN, Inc.; (2) Determination that Defendants' Claims Have Been Discharged; and (3) Award of Damages on June 29, 2007 (the "Delaware Complaint") (Dkt. No. 21, Ex. B at 2). The crux of the Delaware Complaint was that the State Court Action had been discharged in the Delaware bankruptcy, because the Van Brunts' claims arose at the time Mary Van Brunt was allegedly exposed to the asbestos containing products she purchased from Grossman's in 1977 (Id.). In response to JELD-WEN's argument, the Van Brunts asserted that their claims did not arise until, at the earliest, 2006, at the time Mary Van Brunt first manifested symptoms of her asbestos disease (Id.).
JELD-WEN and the Van Brunts filed cross-motions for summary judgment on the Delaware Complaint and, after full briefing and evidentiary hearing, the Delaware Court rendered judgment for the Van Brunts. The Delaware Court determined that its" sole function" was to "determine whether the state court claims are claims that arose prior to the effective date of the [p]lan and therefore barred from assertion at this time." In re Grossman's, Inc. (JELD-WEN, Inc. v. Van Brunt), 389 B.R. 384, 388 (Bankr. D. Del. 2008). The Delaware Court went on to hold that the Van Brunts' asbestos claims did not arise until Mary Van Brunt had symptomatic manifestations of her asbestos injury: "Because Mary Van Brunt did not manifest her injuries until years after the Grossman's Plan was confirmed, this Court concludes that the Confirmation Order, which only purports to enjoin claims arising prior the effective date of Grossman's Plan, does not bar the Van Brunts' State Court Claims against JELD-WEN."1 Id. at 390.
JELD-WEN then came to this Court, seeking a ruling that the Van Brunts Claims were discharged by this Court's ] 987 confirmation order. On July 31, 2008, JELD-WEN filed a motion to reopen the Florida bankruptcy case and subsequently filed the Complaint, defined supra, that is now before this Court (Dkt. No. 1). JELD-WEN's argument in this Court is substantively the same as that asserted in the Delaware Court—i.e., that the State Court action was discharged in Grossman's 1987 bankruptcy, because Mary Van Brunt's claims arose in 1977, at the time of her asbestos exposure. After cross-motions for summary judgment and full briefing, this Court held a hearing on February 19, 2009.
Upon due consideration of the post-hearing submissions of the parties and the arguments of counsel, and for the reasons set forth herein, the Court concludes that JELD-WEN is not estopped from litigating when the Van Brunt's asbestos claims arose for purposes of discharge under the Florida Confirmation Order. However, even though JELD-WEN is not estopped from litigating the issue of when the Van Brunts' claims arose, this Court nonetheless holds that the Van Brunts' claims were not discharged by the Florida Confirmation Order.
Both parties filed their motions for summary judgment in this adversary proceeding pursuant to Federal Rule of Bankruptcy Procedure 7056, which incorporates Federal Rule of Civil Procedure 56. The rule provides that summary judgment shall be rendered "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c).
Parties seeking summary judgment always bear the initial responsibility of informing the court of the basis for its motion, identifying those portions of the "pleadings, depositions answers to interrogatories, and affidavits, if any," which it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, All U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Once the motion is supported by a prima facie showing that the moving party is entitled to judgment as a matter of law, the party opposing the motion may not rest upon the mere allegations or denials in its pleadings, but rather must demonstrate in specific responsive pleadings the existence of specific facts constituting a genuine issue of material fact for which a trial is necessary. Anderson v. Liberty Lobby, Inc., All U.S. 242, 248-49, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).
To determine whether summary judgment is appropriate, the record presented is reviewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348,1356, 89 L. Ed. 2d 538 (1986). However, if the evidence demonstrating the need for trial "is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, All U.S. at 249-250, 106 S. Ct. at 2511.
The Van Brunts assert that the prior ruling of the Delaware Court precludes this Court from ruling on whether the State Court Claims were discharged by the Confirmation Order in this case. However, the Court believes the ruling of the Delaware Court does not preclude it from deciding whether the Florida Confirmation Order discharged the Van Brunts' claims.
The Van Brunts contend that the doctrine of res judicata, or "claim preclusion" should be applied to prevent JELD-W EN from litigating any claim or cause of action which was or could have been litigated in the Delaware Adversary. In the Eleventh Circuit, a party seeking to invoke resjudicata must establish its propriety by satisfying four initial elements: (1) the prior decision must have been rendered by a court of competent jurisdiction; (2) there must have been a final judgment on the merits; (3) both cases must involve the same parties or their privies; and (4) both cases must involve the same causes of action. In re Piper Aircraft Corporation, 244 F.3d 1289, 1296 (11th Cir. 2001), cert, denied, TDY Industries v. Kaiser Aerospace and...
To continue reading
Request your trial