In re Frank Meador Buick, Inc., Bankruptcy No. 7-80-00436
Decision Date | 14 January 1981 |
Docket Number | Bankruptcy No. 7-80-00436,Adv. Proceeding No. 7-80-0296. |
Citation | 8 BR 450 |
Parties | In re FRANK MEADOR BUICK, INC., Debtor. Lewis O. BROWN, Jr., Plaintiff, v. FRANK MEADOR BUICK, INC., Defendant. |
Court | U.S. Bankruptcy Court — Western District of Virginia |
David B. Hart and John Ferguson, Smeltzer & Hart, Roanoke, Va., for plaintiff.
Charles E. Mills and David Furrow, Woodward, Fox & Wooten, Roanoke, Va., for defendant.
The issue before the Court involves the right of the Plaintiff to a trial by jury upon the issues framed in the Complaint filed herein.
Frank Meador Buick, Inc., a Buick automobile dealership in Roanoke, Virginia, is a Chapter 11 Debtor in this Court. In the acquisition of the dealership, Frank Meador, Jr. contracted with Lewis O. Brown, Jr., Plaintiff, to purchase the dealership. The contract of these parties, its interpretation, meaning and financial compensation due thereunder is in issue in this adversary proceeding.
The Defendant contends that the contract is executory and defendant desires to reject the same; that as such the Debtor's liability may be limited so far as future compensation to the Plaintiff under the terms of the contract is concerned. The Plaintiff contends the contract is not executory but is a complete contract, the rights of the Debtor to be compensated under its terms, are the only matters in issue for resolution by this Court.
Plaintiff has requested a trial by jury on the issues surrounding the meaning and construction of the contract; that if the case were at issue in a State or Federal Court a right to trial by jury would clearly exist and the Plaintiff would have full right thereto. The Defendant contends that the rights of the Plaintiff amounts to a claim against the Chapter 11 Debtor in these proceedings and as such, historically under the Bankruptcy Act of 1898 which vested in this Court only summary jurisdiction the Plaintiff is not entitled to trial by jury.
For the reasons hereafter, the Court is of the opinion that a right of trial by jury exists.
Counsel for the Defendant, in support of Defendant's objection to the granting of a jury trial filed in support thereof a memorandum of authorities. The numerous authorities cited deal with cases construing the Bankruptcy Act of 1898, the final construction of which generally was rendered in the case of Katchen v. Landy (1966) 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391. The Defendant further relies upon the language of 28 U.S.C. § 1480(a) which provides:
"Except as provided in subsection (b) of this section, this chapter and title 11 do not affect any right to trial by jury, in a case under title 11 or in a proceeding arising under title 11 or arising in or related to a case under title 11, that is provided by any statute in effect on September 30, 1979."
The Defendant contends that the reference in the foregoing section to "any statute in effect on September 30, 1979" grants a jury trial only if a statute in effect at that time provides such right. The Defendant claims that no statute exists granting the Plaintiff the right of trial by jury upon the contract in question.
The Plaintiff contends that the right of trial by jury as existed at common law incorporated in the statutes of the Commonwealth of Virginia or the United States reserve that right of trial by jury to the Plaintiff in an action of this nature.
Since this case arises under the Bankruptcy Reform Act of 1978 and the companion statutes thereto, this issue must be resolved in light of the intent of Congress within the provisions of this Act.
The Congress of the United States by enacting a new Bankruptcy Code in which it created a new separate Bankruptcy Court, also provided broad jurisdictional powers to the Court and also provided to the Court wide latitude in administering the Bankruptcy Reform Act of 1978. Specifically, the Congress enacted Chapter 90 of Title 28 dealing with jurisdictional matters, powers of the Court, removal procedures, as well as trial by jury. In 28 U.S.C. § 14711 the Congress granted very broad jurisdictional provisions to the Bankruptcy Court.2 In 28 U.S.C. § 1478 Congress provided for removal of actions and in other sections of Chapter 90 prescribed venue and other provisional remedies available to the Court, as well as in 28 U.S.C. § 1480, supra relating to jury trials.
Significant among the provisions of Chapter 90 is 28 U.S.C. § 1481 granting to the Bankruptcy Court the powers of a court of equity, law, and even admiralty. This broad jurisdictional power was inserted in order that questions as to jurisdictional limitations and technicalities could not be interposed to impede the prompt and efficient administration of bankruptcy cases in this Court under the Bankruptcy Reform Act of 1978.
This Court in a recent opinion had occasion to review Title 28 U.S.C. § 1471, supra, as well as 11 U.S.C. § 105.3 See Virginia Block Company v. Bank of Christiansburg (Bkrtcy.W.D.Va.1980) 6 B.R. 670 where the Court on Page 671 stated:
We come to the right of trial by jury when viewed against the backdrop of the foregoing statutory provisions under which this Court presently functions. Our first premise is that of the sacredness of a jury trial established in the United States Constitution4 and the Constitution of Virginia, Article I § 11.5 § 8.01-336 of the Code of Virginia provides:
"The right of trial by jury as declared in Article I § 11 of the constitution of this Commonwealth and by statutes thereof shall be preserved inviolate to the parties."
If the Plaintiff had brought suit upon a contract action in the appropriate venue of a State or Federal Court, little doubt would exist concerning the Plaintiff's right to demand a trial by jury. The Defendant's argument is erroneously placed upon the law that prevailed under the Bankruptcy Act of 1898 which granted to the Bankruptcy Court administering that act essentially "summary jurisdiction" as contrasted with plenary jurisdiction.6
The Congress in enacting the provisions contained in the Bankruptcy Reform Act of 1978 recognized and appreciated the tremendous burdens of the Bankruptcy Court in the administration of the bankruptcy system with the limited and cramped jurisdiction provided in the Act of 1898. In doing so, it not only created a new Court but provided the broad jurisdictional range of authority under the Code provisions recited herein. Virginia Block Co. v. Bank of Christiansburg, supra.
An excellent interpretation of the congressional purpose and intent may be found in Levy, Trial By Jury Under The Bankruptcy Reform Act of 1978, 12 Conn.L.Rev. No.1. The author at Page 2 states as follows:
"Three concomitants of...
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