In re Metro Transp. Co.
| Decision Date | 25 January 1988 |
| Docket Number | Bankruptcy No. 86-03618S. |
| Citation | 82 BR 351 |
| Parties | In re METRO TRANSPORTATION CO., t/a Yellow Cab Co., Debtor. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Kevin W. Walsh, Philadelphia, Pa., for debtors.
Mary F. Walrath, Edward C. Toole, Jr., Philadelphia, Pa., for Cr. Comm.
Jerome H. Ellis, Glenside, Pa., for movant.
James P. Golden, Philadelphia, Pa., for Yellow Cab Co.
On December 21, 1987, one JAMES CARRAGHER filed a Motion to Modify Stay (and is therefore referred to as "the Movant") seeking permission from this court to proceed with state court litigation against the Debtor arising out of a vehicular accident in which he was involved on June 19, 1981. The granting of this motion was necessary to allow the Movant to proceed because of the filing of the instant Chapter 11 bankruptcy case by the Debtor on July 29, 1986.
On January 11, 1988, the Debtor filed an Answer opposing this Motion and a hearing was scheduled before the court on January 20, 1988. At that time counsel for the Movant, counsel for the Debtor in this court, and counsel for "Yellow Cab Company" in the state court proceeding in issue appeared and presented argument.
No testimony was adduced. The Movant's counsel sought to enter into the record the exhibits attached to his motion, which were the following: (1) The state court Complaint naming PHILADELPHIA ELECTRIC COMPANY (hereinafter referred to as "PECO"), a vehicle owned by which and operated by an agent of which struck the Movant qua pedestrian; (2) A third-party Complaint of PECO against "YELLOW CAB COMPANY," whose vehicle allegedly veered in front of PECO's vehicle, causing the accident; and (3) The Answer of the Defendant "t/a YELLOW CAB COMPANY" to the third-party Complaint.
The Movant also sought to add to the record certain Orders which counsel indicated were entered in In re Yellow Cab Company of Philadelphia, a bankruptcy case filed under Chapter XI of the Bankruptcy Act at Bankruptcy No. 78-422, on April 1, 1978, and in which we note that, a final Distribution Order having been entered on July 22, 1987, an end has almost been reached. Apparently, the significance of these Orders, in the mind of the Movant's counsel, is that one of them confirmed the sale of all or a substantial part of the assets of the debtor in that case to the Debtor in this case, thus arguably rendering the Debtor liable in the place of its predecessor.
During the course of the hearing, the Movant's counsel, departing from the text of the motion, which recited no limitation on the relief sought, orally indicated a willingness to proceed against only the Debtor's insurer or insurers and requested permission to take discovery to ascertain the insurance coverage of the Debtor, or its predecessor, as of the date of the accident. Because this request was belatedly made only in the course of the hearing and in light of our disposition which indicates that the issue of insurance coverage is not decisive in the Movant's favor, this request was denied.
The record therefore consists of the pleadings relative to this Motion, i.e., the Motion itself and the Answer; and the documents recited above which we admitted without objection upon the Debtor's counter-request that all of the Docket Entries in Bankruptcy No. 78-422 be admitted into the record. Other than the facts recited above, the pleadings add only that a verdict was entered in favor of the Movant against "Yellow Cab Company" only on May 30, 1985, but that the Movant filed post-trial motions requesting that the verdict be "molded and entered" against the Debtor. The Debtor, emphasizing that a verdict was rendered against Yellow Cab Company" only, apparently vigorously denies that the judgment should be attributed to it.
We sense that there is a hotly-contested legal dispute over whether the Movant's verdict is collectible from the Debtor or not. However, we need not decide this issue because, assuming arguendo that the Movant's verdict is collectible from the Debtor, or indeed even if it had been entered against the Debtor itself, we do not believe that the record warrants the relief sought by the Movant.
In a bankruptcy case, the lot of a pre-petition unsecured claimant is generally restricted to filing a claim in the bankruptcy case against the Debtor and seeking to collect upon that claim, according to Code-established priorities of the claimant vis-a-vis other creditors, from the assets of the Debtor available to pay such claims under a confirmed plan of reorganization. In this case, as might be imagined, there are thousands of parties who have pre-petition claims against the Debtor arising from vehicular accidents. The prospects of the Debtor's reorganization would clearly be jeopardized, if not decisively frustrated, if parties having such claims could continue to litigate against the Debtor in other courts. The time, energy, and financial resources which the Debtor is concentrating in its reorganization process which would be siphoned off to defend such claims could clearly be substantial. Hence, it is not surprising to observe that tort claimants against a debtor, in this or any other bankruptcy case, have a difficult threshold to to cross if they wish to avoid the bankruptcy claims process and proceed against a debtor in litigation elsewhere.
Faced with similar motions by tort claimants in In re Ronald Perlstein Enterprises, Inc., 70 B.R. 1005, 1009 (Bankr.E.D.Pa. 1987), appeal dismissed, C.A. No. 87-2364 (E.D.Pa. June 25, 1987); and In re Stranahan Gear Co., 67 B.R. 834, 836-38 (Bankr. E.D.Pa.1986), we recited copious precedent for the principle that, irrespective of the wording of 11 U.S.C. § 362(g), the burden of producing evidence necessary to prevail in litigation pursuant to 11 U.S.C. § 362(d) is upon the movant. In Perlstein, we further noted that, while unsecured creditors generally had a difficult task in producing sufficient evidence to obtain relief from the automatic stay, 70 B.R. at 1009, they could do so by "establishing that the balance of hardships tips in their favor," id. at 1010, which we noted "imposes a significant burden upon unsecured creditors . . . which they can rarely, if ever, sustain on the basis of pure allegations, . . ." Id. We utilized the aforesaid general analysis for resolution of § 362(d) motions involving unsecured creditors in later decisions in In re Ziets, 79 B.R. 222, 224, 226 (Bankr.E.D. Pa.1987) (motion denied); and In re Cherry, 78 B.R. 65, 72-74 (Bankr.E.D.Pa.1987) (motion granted).
We note that, in the brief period since we filed a Memorandum of January 14, 1988, denying a similar motion in this case, three decisions have been rendered which reinforce the tenets of our above-cited decisions. First, in In re Ward, 837 F.2d 124 (3d Cir., 1988), the Court of Appeals declined to grant a § 362 motion based upon creditors' "bare-bones, paper allegations to satisfy their burden," at 128, observing that the moving party "bears the burden of proof on a motion for relief from the stay." Id. at 128. In the others, Judge Fox of this court, in In re Clinton...
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