In re XXX XX 8251
| Decision Date | 11 January 2017 |
| Docket Number | Case No. 16-27850-DSK |
| Parties | In re William H. Thomas, Jr., Debtor. SSN: xxx - xx - 8251 |
| Court | U.S. Bankruptcy Court — Western District of Tennessee |
The following is SO ORDERED:
MEMORANDUM AND ORDER RE COMBINED WITH RELATED ORDERS AND NOTICE OF THE ENTRY THEREOF
This core proceeding under 28 U.S.C. § 157(b)(2)(A) and (G) arises out of the "Debtor's Motion to Alter or Amend Court's Order Lifting Automatic Stay as to Clear Channel, Inc. and Tennison Brothers, Inc." ("Motion") filed on December 13, 2016, by Michael P. Coury, Esquire ("Mr. Coury"), on behalf of the Chapter 11 debtor, Mr. William H. Thomas, Jr. ("Debtor" or "Mr. Thomas"). Mr. Coury is the current Chapter 11 attorney of record for Mr. Thomas. The Motion resulted in two (2) written objections or responses thereto. Robert L. J. Spence, Jr., Esquire ("Mr. Spence") and Kristina A. Woo, Esquire ("Ms. Woo"), are attorneys for the creditor, Clear Channel Outdoor, Inc. ("Clear Channel"), and Kathy Baker Tennison, Esquire ("Ms. Tennison") and Stuart B. Breakstone, Esquire ("Mr. Breakstone"), are attorneys for the creditor, Tennison Brothers, Inc. ("Tennison Brothers"). All the immediate parties in interest participated at the hearing on the Motion that was held in open court on January 3, 2017. The parties' attorneys provided thoughtful oral statements on behalf of the position of each of their respective clients.
The ultimate question for judicial determination here arises out of a FED. R. BANKR. P. 9023 motion filed by Mr. Thomas. Query: Whether this Court clearly erred creating a manifest injustice by granting Clear Channel's prior motion for relief from the § 362(a) automatic stay under the Bankruptcy Code and Tennison Brother's motion for joinder thereto on November 28, 2016, such that the order should be altered or amended, under the particular facts and circumstances and applicable law of this specific case.
As noted earlier, this is a core proceeding under 28 U.S.C. § 157(b)(2)(A) & (G). The Court has the statutory and constitutional authority to hear and determine this matter subject to the statutory appellate provisions of 28 U.S.C. § 158. The following shall constitute this Court's findings of fact and conclusions of law in accordance with Rule 7052 of the Federal Rules of Bankruptcy Procedure. FED. R. BANKR. P. 7052 (2016).
A discussion of the relevant pre- and postpetition background facts and procedural history of this case may be helpful here and can be summarized as follows. Debtor, Mr. Thomas, an attorney, apparently is a resident of the State of Tennessee and also a resident of the State ofFlorida, who, among other things, conducts business in Memphis, Tennessee. Clear Channel is a Delaware corporation with its principal address located in San Antonio, Texas; however, at all relevant times here, Clear Channel owned and/or operated billboard advertising structures in Shelby County, Tennessee. Tennison Brothers is a corporation with its principal office located in Memphis. Clear Channel and Tennison Brothers are prepetition Tennessee judgment creditors of Mr. Thomas.
John E. Venn, Jr., Esquire ("Mr. Venn"), former Florida bankruptcy attorney of record for Mr. Thomas, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on behalf of Mr. Thomas on June 6, 2016, in the Bankruptcy Court for the Northern District of Florida. After several months of litigation, Mr. Spence, acting on behalf of Clear Channel, filed a "Motion to Transfer Case to Another District," [Dkt. # 58]; and Mr. Thomas filed a "Response" thereto. [Dkt. # 77]. After notice and a hearing, the Bankruptcy Court for the Northern District of Florida entered an "Order Granting Motion to Transfer Bankruptcy Case to United States Bankruptcy Court, Western District of Tennessee, Western Division" on August 11, 2016, reasoning that the Western District of Tennessee was a more convenient forum and also that such transfer was in the interest of justice based on the location of the creditors. [Dkt. # 86]. See 28 U.S.C. § 1412; see also FED R. BANKR. P. 1014(a). The case was officially transferred to this Bankruptcy Court, on August 29, 2016. On August 30, 2016, Mr. Thomas filed an "Application to Employ Michael P. Coury and Glankler Brown, PLLC, as Attorneys for Debtor," [Dkt. # 91], which was granted by this Court after notice and a hearing on September 27, 2016. [Dkt. # 128]. See 11 U.S.C. § 327(a) (2016); see also FED. R. BANKR. P. 2014(a) (2016). Mr. Venn subsequently filed a "Motion to Withdraw as Attorney" on October 11, 2016, [Dkt. # 150], and this Court granted his motion on November 21, 2016. [Dkt. # 183].
On October 28, 2016, Clear Channel filed a "Motion and Memorandum of Clear Channel Outdoor, Inc. for Relief from Automatic Stay to Allow Pending Appeal to the Tennessee Court of Appeals to Proceed to Finality," [Dkt. # 164]; and on October 31, 2016, Tennison Brothers filed a "Notice of Joinder." [Dkt. # 165]. On November 17, 2016, Mr. Thomas filed "Debtor's Objection to Motion of Clear Channel Outdoor, Inc. for Relief from Automatic Stay and Joinder of Tennison Brothers, Inc. in Motion," [Dkt. # 174], and on November 18, 2016, Clear Channel filed a Reply. [Dkt. # 176]. This contested matter pursuant to FED. R. BANKR. P. 9014 came on to be heard before this Court on November 23, 2016; and a combined Order granting both Clear Channel's Motion for Relief from the Automatic Stay and Tennison Brothers' Notice of Joinder was entered on November 28, 2016, after notice and opportunity for a hearing. [Dkt. # 190].
On December 12, 2016, Mr. Thomas filed the "Debtor's Motion to Alter or Amend Court's Order Lifting Automatic Stay as to Clear Channel, Inc. and Tennison Brothers, Inc.," which is the matter now before this Court. [Dkt. # 197]. On December 27, 2016, Clear Channel filed a Response, [Dkt. # 201], and Tennison Brothers filed an Objection. [Dkt. # 202]. A Reply was filed by Mr. Thomas on December 30, 2016. [Dkt. #204].
Clear Channel and Tennison Brothers have both filed proofs of claim in this Chapter 11 case based upon a judgment rendered by the Tennessee Chancery Court on February 4, 2016. See Proof of Claim Nos. 4 and 7. However, Mr. Thomas disputed the claims of Clear Channel and Tennison Brothers in his Schedules. See [Dkt. # 39, Sch. E]. It is expressly noted that Clear Channel and Tennison Brothers also have filed adversary proceedings before this Court under 11 U.S.C. § 523(c) seeking to determine the dischargeability of their claims based on the prepetition Chancery Court judgment. See Adv. Proc., Nos. 16-00260 and 16-00261 herein.
On July 16, 2008, Tennison Brothers filed its "Original Complaint for Damages in the Chancery Court of Shelby County, Tennessee," [Dkt. # 123, Ex. 1]; and on December 4, 2009, it also filed its "Second Amended Complaint" ("Tennison Chancery Court Complaint"). [Dkt. # 123, Ex. 2]. The Tennison Chancery Court Complaint alleged that Mr. Thomas constructed an unpermitted and illegal billboard without obtaining a permit under the Tennessee Billboard Act. TENN. CODE ANN. § 54-21-101, et seq. ("the Billboard Act"); see also TENN. CODE ANN. §§ 54-21-104, 54-21-105, and 54-21-112. The Tennison Chancery Court Complaint states that the "illegally constructed billboard interferes with the construction of the billboard on the Plaintiff's property," and more specifically that Mr. Thomas intentionally interfered with business relationships, induced breach of contract, and created a public nuisance by failing to remove an "illegal" and "unpermitted" billboard. [Dkt. # 123, Ex. 2 at ¶¶ 15, 19-22, 28-29, and 33-35].
On September 8, 2008, Clear Channel filed a Cross-Complaint against Mr. Thomas alleging that he intentionally interfered with Clear Channel's contract with Tennison Brothers by constructing a billboard not permitted under the Billboard Act. [Dkt. 122, Ex. 1 at ¶¶ 19-25, 27, 29-36, and 38-41]. In its Cross-Complaint, Clear Channel alleged that Mr. Thomas "failed to obtain a lawful permit for the erection of the billboard", that his billboard was "illegal" and that his "illegally constructing a billboard on ... was tortious (sic) and designed to cause harm to the business relationship" between Clear Channel and Tennison Brothers. [Dkt. # 122, Ex. 1 at ¶¶ 11, 16, and 34].
On November 20, 2009, the Chancery Court entered a default judgment against Mr. Thomas for his contumacious conduct in refusing to respond or to participate in the discoveryprocess despite having been ordered to do so.1 [Dkt. # 122, Ex. 2]. On June 4, 2010, the Chancery Court imposed an additional sanction on Mr. Thomas for his failure to appear at his scheduled deposition and his refusal to produce discovery documents. See [Dkt. # 122, Ex. 3]. As a result of Mr. Thomas' continued contumacious conduct, the Chancery Court prohibited Mr. Thomas from "present[ing] proof related to damages or in defense thereto." See Id.
On August 6, 2014, the Tennessee Court of Appeals for the Western Section at Jackson ("Court of Appeals") adjudicated that Clear Channel and Tennison Brothers were entitled to damages against Mr. Thomas for his intentional acts. See Tennison Brothers, Inc. v. William H. Thomas, Jr., 2014 WL 3845122 (Aug. 6, 2014); see also [Dkt. # 122, Ex. 4]. The Court of Appeals remanded the case to the Chancery Court solely for a determination of appropriate amount of damages in favor of Clear Channel and Tennison Brothers. See Docket No. W2013-01835-COA-R3-CV ("First Appeal"). Mr. Thomas did not appeal the Tennessee Court of Appeals' decision.
After the case was remanded by the Court of Appeals, the Chancery Court entered an "Order of Reference to Determine Amount of Damages and Financial...
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