In re Woodhollow Loft, Inc., Case No. 07-20206 (Bankr.N.D.Ind. 11/16/2009)
| Decision Date | 16 November 2009 |
| Docket Number | Adversary No. 07-2123.,Case No. 07-20206. |
| Parties | IN RE: WOODHOLLOW LOFT, INC., Chapter 11, Debtor. SISTERS OF ST. FRANCIS HEALTH SERVICES, INC. d/b/a ST. MARGARET MERCY HEALTHCARE CENTERS, Plaintiff, v. WOODHOLLOW LOFT, INC., Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Indiana |
In this consolidated adversary proceeding/contested matter, the court is asked to determine which of two entities holds controlling interests in Indiana Alcoholic Beverage Permit RR45-16715: the Sisters of St. Francis Health Services, Inc. d/b/a St. Margaret Mercy Healthcare Centers ("SSFHS") or Woodhollow Loft, Inc. ("Woodhollow"), the debtor-in-possession in Chapter 11 case number 07-20206. The portion of this case which began as a contested matter relates to the extent to which Woodhollow owes a debt to SSFHS which constitutes an allowable claim in Woodhollow's Chapter 11 case.
The adversary proceeding was commenced by a complaint filed by SSFHS on December 4, 2007. The contested matter arises from an objection filed by Woodhollow to claim #5 of SSFHS on April 23, 2008. Pursuant to a motion filed by Woodhollow, the adversary proceeding and the contested matter were consolidated by the court's order entered on June 23, 2008.
The court has jurisdiction with respect to both the adversary proceeding and the contested matter pursuant to 28 U.S.C. § 1334(b), 28 U.S.C. § 157(a) and (b), and N.D.Ind.L.R. 200.1(a). The adversary proceeding is a "core" proceeding under 28 U.S.C. § 157(b)(2)(A) and (O); the contested matter is a "core" proceeding under 28 U.S.C. § 157(b)(2)(B).
The issue presented by the adversary proceeding is the extent of the interests of Woodhollow and/or SSFHS in Indiana Alcoholic Beverage Permit RR45-16715.
The issue in the contested matter is primarily whether any claim of SSFHS was timely filed so as to be subject to consideration in the Chapter 11 case, and secondarily, if the claim was timely filed, the amount of the debt owed by Woodhollow to SSFHS subject to that claim.
The manner of presentation of the factual/evidentiary record to the court was designated by the court's Order Concerning Determination of Case on a Stipulated Record entered on April 7, 2009. The pertinent provisions of that order state:
IT IS ORDERED that the parties shall file a joint stipulation of fact by May 4, 2009 which will constitute the sole and entire evidentiary record for the purposes of the Court's entry of final judgment in this case. The format of this submission will be as follows:
1. The entire record to be submitted to the court will not be placed on the docket. Rather, the parties will file a single document at the time of provision of the record to the court stating that the record has been submitted to the court, and including a designation of the general materials comprising the record as so submitted.
2. The original record will be delivered to the chambers of the court.
3. Only those portions of depositions which the parties submit into evidence as the designated record will be included in the record; each separate deposition shall be identified as a separate exhibit, and the pages and lines of each deposition shall be specifically designated.
4. It is not necessary for the parties to include in the designated record copies of any documents which appear on the public docket of either adversary proceeding number 07-2123 or case number 07-20206: the parties shall file a designation of each such document which is to be included in the designated record identifying each such document by its title, date of filing, and docket record entry number.
On May 8, 2009, the parties filed their Notice of Filing of Materials in Support of Determination on Stipulated Record. As provided for by the April 7, 2009 order, the record was submitted the "old fashioned" way, in hard copy, due to limitations on the number of pages of material which may be submitted in a single discrete electronic submission. The court has possession of the original record.
As the third paragraph of the April 7, 2009 order stated, the "sole and entire evidentiary record" was to be provided by means of a joint stipulation of fact. The court utilizes this mechanism relatively frequently in order to provide the factual/evidentiary record for submission of a case to the court for determination; the court only utilizes this mechanism with consent of all parties. The intent of utilization of a stipulated record is to provide the court with all necessary factual materials without resorting to the expense and time expenditure of a trial in open court. Just as would be the case in a trial, when the evidence closes the evidence is closed, and the entire record for submission of the matter to the court is encompassed within the stipulated record. Unlike a summary judgment pursuant to Fed.R.Bankr.P. 7056/
Fed.R.Civ.P. 56, in which the court is limited with respect to its review of the evidence and its ability to draw inferences and factual conclusions from the evidence, when a case is submitted on a stipulated record the court is free to weigh all evidence, and determine inferences and factual conclusions, in the same manner as would adhere in an actual trial.
In Section III of its Defendant's Brief in Support of Determination of Matter on Stipulated Record, Woodhollow has asserted that in addition to the designated factual record, the court should consider other statements of SSFHS under the doctrines of "judicial admission" and "judicial estoppel". In providing for determination of this case on a stipulated record, the court intended that contentions of the nature of Woodhollow's would be subsumed within, and resolved by, the parties' stipulated record, and the court could deny Woodhollow's "submission" of these additional statements on that basis. However, for the sake of completely resolving the record, the court will address this facet of Woodhollow's contentions.
Woodhollow essentially contends that the "judicial admissions" which it asserts have been made by SSFHS are not evidence, and thus are outside the scope of the April 7, 2009 order. Let's start first with Woodhollow's assertions concerning judicial admissions. All of the asserted admissions derive from a Motion for Relief from Stay and Abandonment of Real Property filed by SSFHS on March 21, 2007. This motion related solely to attempted termination of Woodhollow's occupancy of real property, and there is no mention in the motion of any matter relating to the alcoholic beverage permit.1 The motion was premised upon the assertion that there was no enforceable written lease agreement between Woodhollow and SSFHS. Paragraph 35 of the motion asserted that, at most, Woodhollow was a tenant at sufferance with respect to the premises. Woodhollow filed its response to the motion on April 17, 2007, and on June 2, 2007, Woodhollow filed its Motion to Assume Lease or Executory Contract, which was premised upon the assertion that Woodhollow held a month-to-month tenancy with respect to SSFHS. A hearing was held on June 27, 2007 with respect to both of the foregoing motions, a hearing which resulted in an agreed order on July 17, 2007.2
The cases cited by Woodhollow on pages 8-9 of its initial memorandum relate principally to the doctrine of "judicial estoppel", which is a doctrine separate from that of the concept of a "judicial admission". The latter doctrine was described as follows in Keller v. United States, 58 F.3d 1194, 1199 [footnote 8] (7th Cir. 1995) as follows:
FN8. Judicial admissions are formal concessions in the pleadings, or stipulations by a party or its counsel, that are binding upon the party making them. They may not be controverted at trial or on appeal. Indeed, they are "not evidence at all but rather have the effect of withdrawing a fact from contention." Michael H. Graham, Federal Practice and Procedure: Evidence § 6726 (Interim Edition); see also John William Strong, McCormick on Evidence § 254, at 142 (1992). A judicial admission is conclusive, unless the court allows it to be withdrawn; ordinary evidentiary admissions, in contrast, may be controverted or explained by the party. Id. When a party testifying at trial or during a deposition admits a fact which is adverse to his claim or defense, it is generally preferable to treat that testimony as solely an evidentiary admission. Michael H. Graham, Federal Practice and Procedure § 6726, at 536-37.
As stated in the foregoing, to rise to the level of a "judicial admission", there must be a "formal concession" in a pleading, or a stipulation that is binding upon a party. The court does not view statements of argumentative assertions of fact or legal position made in a motion of the nature of that filed by SSFHS to constitute either a "formal concession" or a stipulation.3 Thus, the statements which Woodhollow seeks to establish as judicial admissions do not constitute statements within that doctrine.
Given its argument, the more appropriate doctrine for Woodhollow to seek to invoke is that of "judicial estoppel". That doctrine has been well defined by the United States Supreme Court in New Hampshire v. Maine, 121 S.Ct. 1808, 1814-1815 (2001), as follows:
"[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 39 L.Ed. 578 (1895). This rule, known as judicial estoppel, "generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." Pegram v. Herdrich, 530 U.S. 211, 227, n. 8, 120...
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