In re LandSource Cmtys., Dev. LLC
| Decision Date | 11 January 2012 |
| Docket Number | Case No. 08-11111 (KJC) |
| Parties | In re LANDSOURCE COMMUNITIES, DEVELOPMENT LLC, et al. Debtors |
| Court | U.S. Bankruptcy Court — District of Delaware |
(Re: D.I. 1905, 2034, 2096, 2818, 2951)
On June 8, 2008, LandSource Communities Development, LLC, and affiliated entities (including The Newhall Land and Farming Company (A California Limited Partnership) ("Newhall")), each filed a voluntary chapter 11 petition.2 In November 2008, Berco Oil Company North Tapo Lease, LLC ("Berco") filed a proof of claim (claim no. 678) (the "Berco Claim") in the amount of $800,000 against Newhall's estate.3 The Berco Claim arises out of alease dated August 17, 2005 in which Newhall leased to Berco (the "Lease") the rights to certain minerals, such as oil, gas, and other hydrocarbons, on parcels of land owned by Newhall in Ventura County, California (the "Leased Premises"). Berco alleges that Newhall is obligated to indemnify and reimburse Berco for (i) costs to clean up an oil spill on the Leased Premises caused by a pipe leak that occurred on or about July 28, 2008,4 and (ii) monies paid for production/property taxes related to the Leased Premises.
On May 19, 2009, Barclays Bank PLC, as administrative agent under the Super-Priority Debtor-In-Possession First Lien Credit Agreement, filed the Second Amended Joint Chapter 11 Plan of Reorganization for LandSource Communities Development LLC and each of its Affiliated Debtors (the "Plan") (D.I. 1685). Pursuant to Article XIII(A) of the Plan and the Second Plan Supplement (D.I. 1895), the Lease was to be assumed as of the Plan's effective date, subject to a cure amount claim of $0. On July 6, 2009, Berco objected to the cure amount (D.I. 2034) (the "Berco Cure Amount Objection"), claiming that the cure amount owed to Berco under the terms of the Lease was $800,000, i.e., the same amount as the Berco Claim.5
On June 23, 2009, the Debtors filed the Fifth Omnibus Objection (Substantive) to Claims (the "Claim Objection") (D.I. 1905), claiming, inter alia, that the Berco Claim should be disallowed because (i) the Lease provides that Berco is responsible for the cost to clean up any oil spill or release, and (ii) Newhall has paid all property taxes that are its responsibility in full and, further, that any share of production/royalty taxes owed by Newhall were withheld fromroyalty payments owed by Berco to Newhall and paid by Berco to the taxing authorities. (See D.I. 1905, Ex. D). On July 13, 2009, Berco filed a response in opposition to the Claim Objection (D.I. 2096).
On July 20, 2009, the Court entered an order confirming the Plan (the "Confirmation Order") (D.I. 2151). The effective date of the Plan was July 31, 2009.
On October 2, 2009, the Court entered an Agreed Scheduling Order (D.I. 2468) for the Berco "Contested Matter," which was amended by Order dated February 5, 2010 (D.I. 2618), setting deadlines for discovery, mediation, and dispositive motions.6 The parties participated in mediation, but were unable to reach an agreement. On May 28, 2010, Newhall filed a Motion for Summary Judgment with Respect to the Alleged Cure Claim of Berco Oil Company North Tapo Lease, LLC (the "Summary Judgment Motion") (D.I. 2818, 2819). Berco filed a response opposing the Summary Judgment Motion (D.I. 2950) and filed an evidentiary objection (D.I. 2951) to the declaration and attached exhibits filed by Newhall in support of the Summary Judgment Motion.
On August 6, 2010, Newhall filed a reply (D.I. 2989) and a response to Berco's evidentiary objection (D.I. 2990).
Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056, provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any materialfact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). At the summary judgment stage, the court's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the burden of establishing the absence of a genuine dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). ("[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact."). When the nonmoving party bears the burden of persuasion at trial, the moving party "may meet its burden . . . by showing that the nonmoving party's evidence is insufficient to carry that burden." Foulk v. Donjon Marine Co., Inc., 144 F.3d 252, 258 n.5 (3d Cir. 1998) (quoting Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998)).
Once the moving party has carried its initial burden, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Summary judgment cannot be avoided by introducing only "a mere scintilla of evidence," Sarko v. Penn-Del Directory Co., 968 F.Supp. 1026, 1031 (E.D.Pa. 1997) (citation omitted), aff'd 189 F.3d 464 (3d Cir. 1999), or by relying on "conclusory allegations, improbable inferences and unsupported speculation." J.Geils Band Emp. Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir. 1996). "Brash conjecture coupled with earnest hope that something concrete willmaterialize, is insufficient to block summary judgment." Id., quoting Dow v. United Bhd. of Carpenters, 1 F.3d 56, 58 (1st Cir.1993).
Substantive law determines which facts are material; only disputes over facts that might affect the outcome of the suit will preclude summary judgment. Anderson, 477 U.S. at 248. Moreover, a dispute over a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. See also Delta Mills, Inc. v. GMAC Comm. Fin., LLC (In re Delta Mills, Inc.), 404 B.R. 95, 105 (Bankr. D. Del. 2009) (). The Court must resolve all doubts and consider the evidence in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255 ().
Newhall supported its Summary Judgment Motion with documents provided through the declaration of Andrew Irgens, an attorney for Newhall (D.I. 2820). Berco objected to the documents, arguing that (i) the declaration does not set forth adequate facts to find that the declarant has sufficient knowledge about the attached documents to authenticate the documents, (ii) the documents may include statements that are hearsay, and (iii) Newhall did not request the Court to take judicial notice of any documents.
Newhall filed a response to Berco's evidentiary objection (D.I. 2990) which (i) asks the Court to take judicial notice of Exhibits A through M; (ii) disputes Berco's objection to the authenticity of Exhibit N, which is a copy of the Lease, identical to the one attached to Berco'sClaim, and (iii) attaches an affidavit of Cris Perez, Newhall's Regulatory Compliance Manager, (the "Perez Affidavit") to identify and authenticate the documents marked as Exhibits N through Z, as well as new exhibits AA, BB and CC.7
First, I will overrule Berco's objection to copies of pleadings, orders, and excerpts from the Plan in this bankruptcy case, which are attached as Exhibits A through M to the Irgens Affidavit. I will take judicial notice of Exhibits A through M pursuant to Federal Rule of Evidence 201, which provides in pertinent part:
A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.
Fed.R.Evid. 201(b). See In re Indian Palms Assoc., Ltd., 61 F.3d 197, 205 (3d Cir. 1995) (). It is not unusual for a Court to take judicial notice of its docket. See Meyers v. Herrernan, 740 F.Supp.2d 637, 640 n.4 (D.Del. 2010) (), Official Comm. Of Asbestos Claimants v. Asbestos Prop. Damage Comm. (In re Federal-Mogul, Inc.), 330 B.R. 133, 136 (D.Del. 2005) (same), In re Int'l Wireless Commc'n Holdings, Inc., No. 98-2007, 1999 WL 33483582, *2 (Bankr.D.Del. 1999) ().
Second, Berco's objection to Exhibits N through Z, based on the declarant's lack of personal knowledge, will also be overruled due to Newhall's substitution of the affidavit of Chris Perez. Rule 56(c)(4) provides:
An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.
Fed.R.Civ.P. 56(c)(4). In the affidavit, Mr. Perez states that his duties include "coordinating with government agencies regarding energy-related issues and...
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