In re United States Lines, Inc., 86 B 12240 (CB)
| Decision Date | 19 August 1996 |
| Docket Number | 95 Civ. 3175 (SHS),95 Civ. 3177 (SHS),86 B 12241 (CB),and 95 Civ. 3189 (SHS),95 Civ. 3179 (SHS),95 Civ. 3187 (SHS),No. 86 B 12240 (CB),Adv. No. 93-8004A.,86 B 12240 (CB) |
| Citation | 199 BR 465 |
| Parties | In re UNITED STATES LINES, INC. and United States Lines (S.A.) Inc. f/k/a Moore McCormack Lines, Inc., Debtors. UNITED STATES LINES, INC. and United States Lines (S.A.) Inc. Reorganization Trust, Plaintiffs-Appellees, Asbestosis Claimants, Plaintiffs-Intervenors-Appellees, v. AMERICAN STEAMSHIP OWNERS MUTUAL PROTECTION AND INDEMNITY ASSOCIATION, INC., West of England Owners Mutual Protection and Indemnity Association, Inc., Continental Insurance Corporation, The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited, Assuranceforeningen Skuld, Liverpool & London Mutual Steamship Protection and Indemnity Association Limited, Marine Officers of America Corp., and The Travelers Insurance Company, Defendants-Appellants. |
| Court | U.S. District Court — Southern District of New York |
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Morris Stern, Stern, Dubrow & Marcus, Maplewood, NJ, for United States Lines Inc., United States Lines (S.A.), Inc. Reorganization Trust.
John D. Kimball, Healy & Baillie, New York City, for United Kingdom Mutual Protection & Indemnity Association, Inc.
Leonard Jacques, The Leonard Jacques Law Firm, Detroit, MI, for Asbestosis Claimants.
Richard H. Brown, Jr., Kirlin, Campbell & Keating, New York City, for American Steamship Owners Mutual Protection & Indemnity Association, Inc.
William R.P. Hogan, Freehill, Hogan & Mahar, New York City, for West of England Owners Mutual Protection & Indemnity Association, Inc. Helen M. Benzie, Bigham, Englar, Jones & Houston, New York City, for Continental Insurance Corporation.
John D. Kimball, Healy & Baillie, New York City, for United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited.
George W. Sullivan, Lilly Sullivan Purcell Barkan & Junge, P.C., New York City, for Assuranceforeningen Skuld.
Marshall P. Keating, Kirlin Campbell & Keating, New York City, for Liverpool & London Mutual Steamship Protection & Indemnity Association Limited.
Alexander F. Vitale, Freehill, Hogan & Mahar, New York City, for West of England Ship Owners Mutual Insurance Association (Luxembourg) in No. 95 Civ. 3177.
Michael Corrigan, Simpson, Thacher & Bartlett, New York City, for Travelers Insurance Company in Nos. 95 Civ. 3177, 95 Civ. 3187, 95 Civ. 3189.
Nick Evan, Simpson Thacher & Bartlett, New York City, for Travelers Insurance Company in No. 95 Civ. 3179.
This is an appeal from an order of the bankruptcy court, dated February 28, 1995, entered in accordance with a decision issued by that court on July 5, 1994, which, inter alia: denied appellants' motions for summary judgment for lack of a justiciable case or controversy; denied appellants' motions for summary judgment on the ground that this action is a "non-core" proceeding; sua sponte granted summary judgment to appellee on the question of when insurance coverage is triggered pursuant to the insurance policies in question; denied four of the appellants' motions to stay the action pending arbitration; denied appellants' motions to dismiss the complaint of the intervenors; and denied appellants' motions for summary judgment on appellee's claims for punitive damages and attorneys fees and on its claim pursuant to N.Y.Gen.Bus. Law § 349.
Appellees have moved to dismiss the appeal in part on the ground that only the bankruptcy court's decision on arbitrability is appealable as of right. For the reasons that follow, the motion is granted in part and denied in part.
Most of the facts pertinent to this motion are set forth fully in the extensive opinion of the bankruptcy court, see In re United States Lines, Inc., 169 B.R. 804, 809-11 (Bankr. S.D.N.Y.1994), familiarity with which is presumed.
United States Lines, Inc. and United States Lines (S.A.), Inc. (collectively, "Debtors"), among the world's largest shipping companies, are engaged in the international transportation of freight on ocean-going vessels. (See 169 B.R. at 809.) In excess of 8,000 of its former employees filed some 15,000 claims, pursuant to the Jones Act, 46 App.U.S.C. § 688 et seq., and the General Maritime Law, alleging injury suffered from exposure to asbestos while employed on Debtors' ships. (See 169 B.R. at 809.)
At various times during their existence, Debtors purchased insurance contracts, known as Protection and Indemnity policies ("P & I policies") from appellants, who are foreign and domestic maritime insurers ("the P & I Clubs" or "the Clubs"). (See 169 B.R. at 809.) The policies protect the insured against, inter alia, liability for bodily injury or death for which the insured is liable by reason of the fact that it owns or operates the insured vessel. (See 169 B.R. at 809.) Generally, a particular Club would insure Debtors' entire fleet for a particular year, with policy limits varying from year to year, and deductibles ranging from $250 to $100,000 for each accident or occurrence. (See 169 B.R. at 810.)
On November 24, 1986, Debtors filed a voluntary petition for relief pursuant to Chapter 11 of the Bankruptcy Code, see 11 U.S.C. § 101 et seq. (See 169 B.R. at 810.) Debtors' plan was confirmed on May 16, 1989. (See 169 B.R. at 810.)
The plan transfers Debtors' maritime insurance rights to appellee United States Lines, Inc. and United States Lines (S.A.), Inc. Reorganization Trust ("the Trust") and its Trustee. (See 169 B.R. at 810.) The Trustee is authorized to resolve disputed personal injury claims, distribute the Debtors' assets to claimants, and collect funds for reimbursements of those distributions pursuant to the Debtors' maritime insurance policies, including the P & I policies. (See 169 B.R. at 810.)
On December 8, 1992, the bankruptcy court entered a stipulation of conditional settlement between the Trust and a group of 106 claimants represented by the law firm of Dickstein, Shapiro & Morin ("the DSM Claimants"). (See 169 B.R. at 811.) The following month, the Trust filed this proceeding seeking a declaration, pursuant to 28 U.S.C. § 2201, of its and the Clubs' respective rights and obligations pursuant to the P & I policies. (See 169 B.R. at 811; Appellants' Joint Record on Appeal ("R.") Vol. I, No. 1.) On April 12, 1993, the bankruptcy court granted the Asbestosis Claimants' motion to intervene pursuant to Fed.R.Civ.P. 24 and Fed.R.Bankr.P. 7024. (See 169 B.R. at 811.) The Asbestosis Claimants seek similar declaratory relief. (See 169 B.R. at 811; R. Vol. I., No. 19.)
Subsequently, the Clubs moved for summary judgment and to dismiss the intervention complaint. As noted, on July 5, 1994, the bankruptcy court issued an opinion denying the motion in all but one respect not relevant here and sua sponte granted summary judgment to the Trust and the Asbestosis Claimants on one issue. (See 169 B.R. at 831-32.)
At a status conference held on February 28, 1995, the parties presented to the bankruptcy court a final stipulation of settlement between the Trust and the Clubs with regard to the claims of the 106 DSM claimants. (R. Vol. VIII, Nos. 82, 84.) The court entered this stipulation as an order two days later. (R. Vol. VIII, No. 82.)
Also on February 28, 1995, the Clubs requested leave of the bankruptcy court to file a motion to reconsider that portion of the July 5, 1994 decision holding that a justiciable case or controversy was before the court, on the ground that the settlement of the 106 DSM claims had mooted the entire action. (R. Vol. VIII, No. 84, at 10-11.) The bankruptcy court orally denied the application, stating: "You can make that argument before the District Judge if you feel the case is moot and it should be vacated, but let a District Judge decide that." (R. Vol. VIII., No. 84, at 13.) The same day, the bankruptcy court issued an order in accordance with the July 5, 1994 decision, and that order was entered three days later. (R. Vol. VIII, No. 81.) The Clubs timely appealed the order.1
All parties agree that, by virtue of 9 U.S.C. § 16(a)(1)(A) and 28 U.S.C. § 158(a), only the bankruptcy court's order denying a stay of the proceedings pending arbitration to West of England, UK Club, Liverpool & London, and Skuld (collectively "the Foreign Clubs") is appealable as of right by those parties. The issues for determination are (1) whether the Foreign Clubs may appeal more than just that portion of the bankruptcy court's order; and (2) if so, whether the American Club, the Fulton Syndicate Survivors, Continental, and Travelers (collectively "the Domestic Clubs") may join in the appeal of those other portions of that order, given that they do not have an appeal as of right as to any portion of the order. The Clubs make a number of contentions that the Court will address in turn.
The UK Club, Liverpool & London, and the American Club, going beyond what the Court has understood to be the scope of these motions, urge that the opinion below be vacated and the case be dismissed as moot in light of the final settlement with regard to the 106 DSM claims. They contend that the bankruptcy court rested its opinion with regard to the justiciability of this action on the fact that the 106 DSM claims had not been fully settled. Now that those claims have been settled, they contend, the claims of the Asbestosis Claimants are not yet "of sufficient immediacy and reality" to form the basis of a live case or controversy. Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941). The argument, therefore, is more accurately stated as one of both mootness and lack of ripeness: the action is moot with regard to the 106 DSM claimants, and not ripe with regard to the Asbestosis Claimants.
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