Matter of Celotex Corp.
| Decision Date | 01 April 1993 |
| Docket Number | Adv. No. 91-40.,Bankruptcy No. 90-10016-8B1 and 90-10017-8B1 |
| Citation | 152 BR 667 |
| Parties | In the Matter of the CELOTEX CORPORATION, et al., Debtors. The CELOTEX CORPORATION, et al., Plaintiffs, v. AIU INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
Charles P. Schropp, Mark P. Buell, Schropp, Buell & Elligett, Jeffrey W. Warren, Bush, Ross, Gardner, Warren & Rudy, P.A., Mark H. Kolman, Karen L. Bush, Mark D. Silverschotz, Anderson Kill Olick & Oshinsky, for plaintiffs.
Sara Kistler, Asst. U.S. Trustee,
John W. Kozyak, Kozyak Tropin Throckmorton & Humphreys, P.A., for Asbestos Property Damage Claimants Committee.
Charles M. Tatelbaum, Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., for Creditors Committee of Unsecured Creditors.
William Knight Zewadski, Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill, for Unofficial Asbestos Health Claim Co-Defendants Committee.
H.C. Goplerud, Honigman Miller Schwartz and Cohn, for Asbestos Health Claimants Committee.
James W. Greene, William E. Nowakowski, Bromley, Greene & Walsh, for Columbia Cas. Co., Employers Ins. of Wausau, Federal Ins. Co., Protective Nat. Ins. Co. John A. Yanchunis, Blasingame, Forisz and Smiljanich, P.A., for Continental Cas. Co., Citadel Gen. Assur. Co., Columbia Cas. Co., American Re-Insurance Co., Eric Reinsurance Co., Zurich American Ins. Co.
John E. Peer, Long & Levit, for Continental Cas. Co., Transp. Ins. Co.
Katherine E. Rakowsky, Philip C. Stahl, Iving C. Faber, Margaret B. Jones, Grippo & Eldon, for American Ins. Co., Nat. Sur. Co.
Rolf E. Gilbertson, Paul L. Gingras, Zelle & Larson, for Employers Ins. of Wausau.
Ronald L. Cohen, Seward & Kissell, for Employers Ins. Co. of Wausau.
Mary A. Lau, Robert J. Asti, Lau, Lane, Pieper & Asti, P.A., for Employers Ins. Co. of Wausau.
George A. Vaka, Russell S. Buhite, Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., for North Star Reinsurance Co.
Roger E. Warin, Daniel C. Sauls, John A. Flyger, Stoptoe & Johnson, for Highlands Ins. Co., Old Republic Ins. Co., St. Paul Surplus Lines Ins. Co.
James P. Schaller, Christine A. Nykiel, Jackson & Campbell, for American Home Assur. Co., AIU Ins. Co., Granite State Ins. Co., Lexington Ins. Co., Nat. Union Fire Ins. Co. of Pittsburgh, PA.
Thomas B. Mimms, Jr., MacFarlane Ferguson, for American Home Assur. Co., AIU Ins. Co., Highlands Ins. Co., Lexington Ins. Co., Old Republic Ins. Co., Granite State Ins. Co., Nat. Union Fire Ins. Co. of Pittsburgh, PA, Employers Mut. Cas. Co., American Ins. Co., Nat. Sur. Co., St. Paul Surplus Lines Ins. Co.
Elizabeth B. Sandza, Cynthia T. Andreason, Leboeuf, Lamb, Lieby & MacRae, for Gibraltar Ins. Co., Hudson Ins. Co.
David C. McLauchlan, Lord Bissell & Brook, Deborah M. Paris, Paris & Hanna, P.A., for Lloyds of London.
Jack Willis, Allianz Underwriters Ins. Co., for Allianz Underwriters Ins. Co.
Lynn Bregman, David Donovan, John Siddeek, Wilmer, Cutler & Pickering, for North American and California Union Ins. Co.
Meryl R. Lieberman, Daniel W. Morrison, III, Wilson, Elser, Moskowitz, Edelman & Dicker, for Gen. Acc. Fire & Life Assur. Co.
William J. Bowman, Hogan & Hartson, for First State Ins. Co., Hartford Indem. Co., Twin City Ins. Co.
Robert H. Berkes, Barbara Hodous, Bodkin, McCarthy, Sargent & Smith, for First State Ins. Co., Hartford Indem. Co., Twin City Fire Ins. Co.
W. Gray Dunlap, Jr., Judith W. Simmons, De La Parte & Gilbert, for Hartford Indem. Co., Twin City Fire Ins. Co., First State Ins. Co.
Robert J. Bates, Jr., Maryann C. Hayes, Pope & John, Ltd., for Eric Reinsurance Co., American Re-Insurance Co., Zurich Ins. Co.
Virginia M. Vermillion, David Schroeder, Gleason, McGuire & Shreffler, for Employers Mut. Cas. Co. and Allstate Ins. Co.
Wilson M. Brown, III, Lawrence A. Nathanson, Drinker Biddle & Reath, for American Motorists Ins. Co. and Lumbermens Mut. Cas. Co.
Elizabeth G. Repaal, Harris, Barrett, Mann & Dew, for Allstate Ins. Co.
Gregory J. Willis, Walton, Lantaff, Schroeder & Carson, for Florida Ins. Guar. Co.
James E. Rocap, III, Cathy J. Burdette, Michael J. Barta, Miller, Cassidy, Larroca & Lewin, Washington, DC, for Aetna Cas. & Sur. Co.
Mark M. Schabacker, Arnold, Morris, Frank & Schabacker, P.A., Tampa, FL, for Aetna Cas. & Sur. Co.
Rick Dalan, St. Petersburg, FL, for Royal Indem. Co.
Edward M. Waller, Jr., Fowler White Gillen Boggs, Villareal and Banker, P.A., Tampa, FL, for American Motorists Ins. Co.
Louis Schulman, Butler Burnette & Pappas, Tampa, FL, for Continental Ins. Co., International Ins. Co., U.S. Fire Ins. Co., The American Centennial Ins. Co. Robert J. Kelly, McElroy Deutsch & Ulvaney, Morristown, NJ, for Intern. Ins. Co. and U.S. Fire Ins. Co.
Susan B. Morrison, Morrison, Morrison & Gregory, P.A., Tampa, FL, Thomas J. Quinn, William J. Cleary, Mendes & Mount, New York City, for Barrett and London Market Companies.
William E. McGrath, Jr., Golden, Rothschild, Spagnola & Difazio, Somerville, NJ, Michael M. Ingram, John A.C. Guyton, III, Alley & Ingram, Tampa, FL, for Transport Ins. Co.
Michael F. Aylward, Morrison, Mahoney & Miller, Boston, MA, Benjamin H. Hill, III, Dennis P. Waggoner, Hill, Ward & Henderson, Tampa, FL, for Transamerica Premier Ins. Co.
Warren D. Hamann, James F. Asher, Kimbrell & Hamann, Miami, FL, Michael Gallagher, German, Gallagher & Murtagh, Philadelphia, PA, for Stonewall Ins. Co.
THIS CAUSE came on to be heard upon various Defendants' motions to determine whether this proceeding is a core proceeding (28 U.S.C. § 157). Debtor has filed a five-count complaint seeking, in the main, declaratory relief under 28 U.S.C. §§ 2201 and 2202. Counts I, II, and III seek a declaration that under numerous insurance policies Defendants owe Debtor current duties to defend and indemnify Debtor against existing or anticipated claims stemming from asbestos-related property damage, environmental damage, and asbestos-related personal injury. Counts IV and V seek declaratory relief with respect to the Wellington Agreement, a major agreement between Debtor and various Defendants. Counts IV and V will not be considered herein because this Court has determined most of those issues on motions for summary judgment.1 Finally, there is a prayer for interest, extra-contractual damages, attorney's fees and other relief. The Court, at this point, is uncertain as to what extra-contractual damages are sought since there are no allegations, but merely a prayer for relief. Further, this Court, in its order denying Defendants' motions for a trial by jury, found Debtor's complaint seeks only a declaration of rights and not money damages. The issue herein is basic: Whether this proceeding is a core proceeding. 28 U.S.C. § 157.
The Public Rights Doctrine enunciated in Murray's Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 15 L.Ed. 372 (1856), is not a necessary determinant in the core/non-core inquiry. That doctrine is generally a theory of acquired constitutional jurisdiction, where Congress seeks to entrust non-Article III courts with jurisdiction which would otherwise be solely within the domain of Article III courts. There is no need to reiterate the entire decisional maze associated with the Public Rights Doctrine since it is subsumed in bankruptcy jurisdiction established in 28 U.S.C. § 1334.2 In Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), the plurality when speaking of the Public Rights Doctrine utilized the term "matters arising" and later used the language "related to." Marathon, 458 U.S. at 67 and 76, 102 S.Ct. at 2869 and 2874. Using those particular terms as benchmarks to review the language of 28 U.S.C. § 1334, it is clear from Marathon and its progeny3 that in drafting bankruptcy jurisdiction Congress sought to maintain a broad jurisdictional arena for the district court with respect to bankruptcy matters. Marathon, 458 U.S. at 64, n. 14, 102 S.Ct. at 2867 & n. 14. The district court was then authorized to refer4 to the bankruptcy court all cases and proceedings, and finally, a Marathon safety net was created which requires a determination as to whether a proceeding before the bankruptcy court is "core," this latter term also being used by the plurality in Marathon, 458 U.S. at 70-71, 102 S.Ct. at 2871-72. Thus, the constitutional infirmity envisioned in Marathon by way of the Public Rights Doctrine is now encapsulated solely within the non-core sector.
Simply put, the institutional inquiry as to bankruptcy jurisdiction5 is a basic question of whether the matter is "related to" the bankruptcy case. If the matter is "arising under" or "arising in" Title 11, it most assuredly has to be "related to" the case because the definition of "related to" is so inclusive. In Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984), the court said, "the usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy." (Emphasis in original.) Conversely, if the matter is not "related to" the bankruptcy case, then clearly it cannot be "arising under" or "arising in" Title 11. Thus, the bankruptcy court would have no jurisdiction, and the core inquiry would be immaterial. Ultimately, once there is a determination the matter is "related to" the bankruptcy case, the bankruptcy court has subject matter jurisdiction and the inquiry immediately proceeds to the question of whether the matter is core.6Wood v. Wood (In re Wood), 825 F.2d 90, 93 (5th Cir.1987); accord Miller v. Kemira, Inc. (In re Lemco Gypsum, Inc.), 910 F.2d 784, 788 n. 16 (11th Cir.1990).
The inquiry into the core/non-core continuum...
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