In re Tippins
| Decision Date | 01 May 1998 |
| Docket Number | 96-40303-JSS,Bankruptcy No. 95-40531-JSS,Adversary No. 97-40696. |
| Citation | 221 BR 11 |
| Parties | In re Janice TIPPINS, Debtors. In re William L. TIPPINS and Kathy Tippins, Debtors. AMERICAN GENERAL FINANCE, INC., and Merit Life Insurance Company, Plaintiffs, v. Janice TIPPINS, William Tippins, and Kathy Tippins, Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
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Earl Underwood, Huntsville, AL, Robert G. McDonald, for Defendants/Debtors.
Michael Hall, Rita L. Hullett, Birmingham, AL, for Plaintiffs/Creditors.
This matter is before the Court on the Motion for Summary Judgment filed by the defendants, Janice Tippins ("Janice") and William and Kathy Tippins ("William and Kathy") and the cross-motion for summary judgment filed by the plaintiffs, American General Finance, Inc. ("AmGen") and Merit Life Insurance Company ("Merit"). AmGen and Merit filed this adversary proceeding to enjoin Janice and William and Kathy Tippins from prosecuting a lawsuit filed against them in state court.1 AmGen and Merit contend that the Court should enjoin the Tippins from prosecuting the lawsuit pursuant to its powers under 11 U.S.C. § 1052 because a victory by the Tippins in the state court case would result in relief contrary to this Court's orders confirming the Tippins' chapter 13 plans. The companies previously removed the Tippins' state court action to this Court, where a Motion to Remand remains pending. AmGen and Merit argue three separate grounds support issuing an injunction under 11 U.S.C. § 105: the doctrine of claim preclusion (also known as the doctrine of res judicata); the doctrine of judicial estoppel; and lack of standing. The Tippins contest each of these issues.
The parties have stipulated to the facts and the issues were briefed by all parties. Oral arguments were heard on January 13, 1998, and February 17, 1998. Appearing were Earl Underwood and Robert G. McDonald, attorneys for the Tippins, and Michael L. Hall and Rita L. Hullett, attorneys for AmGen and Merit. Upon consideration of the record, the submissions of the parties, the arguments of counsel, and the relevant law, the Court is of the opinion that AmGen's and Merit's motion for summary judgment is due to be granted and the Tippins' motion for summary judgment is due to be denied.
The facts are undisputed. The Tippins' motion for summary judgment adopts the facts and evidentiary submissions filed by AmGen and Merit. The undisputed facts are as follows:
In September of 1994, Janice Tippins obtained a loan from AmGen. To secure the loan, she gave AmGen a security interest in real property. As part of the loan transaction, Janice purchased credit life insurance from Merit. The cost of the insurance premiums was included in the amount AmGen financed.
Janice filed a petition for relief under chapter 13 of Title 11 of the United States Bankruptcy Code on March 3, 1995. The schedules filed with her petition did not disclose any claim or cause of action against AmGen and Merit. In Schedule D, Janice listed a secured debt to AmGen. She did not classify the debt to AmGen as contingent, unliquidated or disputed in her schedules. On March 27, 1995, AmGen filed a secured proof of claim in the amount of $7,691.01 arising out of the pre-petition loan it made to Janice. The proof of claim filed by AmGen included insurance premiums owed to Merit. There were no objections to AmGen's proof of claim. Janice's chapter 13 plan proposed to pay one hundred percent of all allowed claims, with interest on secured claims but no interest on unsecured claimants. Her proposed plan disclosed the debt owed to AmGen and proposed to pay AmGen direct. The plan did not mention any claim or cause of action against AmGen or Merit; however it did contain the following language:
III.9. The Debtor reserves all claims and causes of action against creditors until the conclusion of the case or the running of any applicable statute of limitations, whichever is longer.
On September 6, 1995, Janice's plan was confirmed. The Confirmation Order allowed AmGen's secured claim in the amount of $7,691.01. On September 12, 1997, over two years after confirmation of her plan, Janice amended her schedules to disclose her cause of action against AmGen and Merit and to claim the cause of action as exempt property. No objections were filed by any party to Janice's amendments.
On March 30, 1995, William and Kathy Tippins obtained a loan from AmGen, secured by a mortgage on real property. As part of the loan transaction, they also purchased credit life insurance from Merit. The cost of the insurance premiums was included in the amount AmGen financed.
William and Kathy Tippins filed their petition for relief under chapter 13 of Title 11 of the United States Bankruptcy Code on February 2, 1996. The schedules filed with their petition did not disclose any cause of action against AmGen and Merit. In their Schedule D, the couple listed a secured debt owed to AmGen. They did not classify the debt to AmGen as contingent, unliquidated or disputed. On February 15, 1996, AmGen filed a secured proof of claim in the amount of $13,365.38 arising out of the pre-petition loan to William and Kathy. The proof of claim filed by AmGen included insurance premiums owed to Merit. There was no objection filed to AmGen's proof of claim. William and Kathy's chapter 13 plan, as amended, proposed to pay allowed secured claims in full plus interest and to pay unsecured creditors 66% of their allowed claims with no interest. In addition, the proposed plan specifically disclosed the debt owed to AmGen and proposed to pay all post-petition payments to AmGen direct. The plan did not mention any claim or cause of action against AmGen or Merit; however, the plan and the plan summary did contain the following statement:
IV.8.b. The debtors do not waive any claim or causes of action they may have against any of their creditors.
On August 9, 1996, the couple's plan was confirmed. The Confirmation Order allowed AmGen's secured claim in the amount of $13,365.38. On November 4, 1996, William and Kathy amended their schedules to disclose their cause of action against AmGen and Merit and to claim the cause of action as exempt property. No objections were filed to the amendments.
The Tippins contend that they were without knowledge of their claims against AmGen and Merit until August of 1996, after Janice's plan was confirmed but prior to confirmation of William and Kathy's plan. On July 10, 1997, they filed a state court action against AmGen and Merit in the Circuit Court of Calhoun County, Alabama. Their state court action consists of claims of fraud, misrepresentation, conspiracy and violations of the Alabama Mini-Code. These claims arose out of the pre-petition loans made by AmGen to each of the debtors. On August 20, 1997, AmGen and Merit removed the state court action to this Court pursuant to 28 U.S.C. §§ 1441 and 1452. At the same time, AmGen and Merit also initiated this adversary proceeding requesting that this Court enjoin the Tippins from proceeding with the state court action pursuant to its powers under 11 U.S.C. § 105. The Tippins filed a motion to remand on September 11, 1997. In support of their motion, the Tippins allege that the state court is the proper forum because their claims are based upon state law. By agreement of the parties, the motion to remand is currently pending before the Court and is awaiting decisions on the current motions for summary judgment. Additionally, the Tippins filed a counterclaim alleging that this adversary proceeding violated 11 U.S.C. § 362(h) and was an abuse of process.
On November 20, 1997, the Tippins filed a motion for summary judgment on AmGen and Merit's complaint and their counterclaims. AmGen and Merit filed a cross-motion for summary judgment on their complaint and the Tippins' counterclaims on November 21, 1997. On January 16, 1998, the Court entered a Final Judgment granting AmGen's cross-motion for summary judgment on the Tippins' counterclaims and dismissing the Tippins' counterclaims with prejudice.
This Court has jurisdiction over the instant case using the analysis that this Court used in Roper v. American Health & Fire Ins. Co. (In re Roper), 203 B.R. 326 (Bankr.N.D.Ala.1996). The facts in Roper were identical to the facts in this case, although the legal issues were different. The jurisdictional issue in Roper is essentially the same. In Roper, this Court concluded that it had jurisdiction over a state law cause action filed by a Chapter 13 debtor-plaintiff so long as the plan did not pay unsecured claims the present value of their allowed claim. Id. at 332-33. In the instant case, the Janice Tippins bankruptcy case pays 100% of allowed claims but it does not pay interest to unsecured claims. The William and Kathy Tippins bankruptcy case pays only 66% to unsecured claims. Thus, following Roper, this Court has jurisdiction over the instant action with respect to both the Janice Tippins' and William and Kathy Tippins' bankruptcy cases. 28 U.S.C. § 1334(b).
Moreover, there is a second basis for jurisdiction in this case. AmGen and Merit filed this action to enforce the terms of the Confirmation Orders in the Tippins' two pending chapter 13 cases. Every court necessarily has jurisdiction where the request for relief is to enforce a judgment that the court has issued. See, e.g., Local Loan Co. v. Hunt, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230 (1934); Southmark Properties v. Charles House Corp., 742 F.2d 862, 868 (5th Cir.1984). A bankruptcy confirmation order in a bankruptcy case is a judgment for this jurisdictional purpose. Wallis v. Justice Oaks II, Ltd. (In re Justice Oaks II, Ltd.), 898 F.2d 1544 (11th Cir.).
AmGen and Merit contend that a § 105 injunction should issue for three reasons. The first...
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