Matter of Georgia Steel, Inc.
| Decision Date | 30 March 1987 |
| Docket Number | Bankruptcy No. 81-50966,Adv. No. 84-5052. |
| Citation | 71 BR 903 |
| Parties | In the Matter of GEORGIA STEEL, INC., d/b/a Eastern Crane & Equipment, d/b/a Plate Services, d/b/a Georgia Structurals, and d/b/a Quickwork, Debtor. J. Coleman TIDWELL, Trustee, Plaintiff, Tri-State Machinery Company, Inc., Intervenor, v. Margaret C. SLOCUMB, as Trustee for Robert T. Slocumb, John T. Slocumb, William Ashley Slocumb, Liesl Paige Slocumb, Jennifer Lynne Slocumb, and Burke L. Slocumb, III; and Burke L. Slocumb, Jr., Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Georgia |
Thomas C. James, III, Robert C. Norman, Jr., Jones, Cork & Miller, Macon, Ga., for Margaret C. Slocumb.
William H. Larsen, John T. McGoldrick, Jr., Martin, Snow, Grant & Napier, Macon, Ga., for Tri-State Machinery Co., Inc.
On September 3, 1981, Georgia Steel, Inc., d/b/a Eastern Crane & Equipment, d/b/a Plate Services, d/b/a Georgia Structurals, and d/b/a Quickwork, Debtor, filed a petition under Chapter 11 of the United States Bankruptcy Code. On October 29, 1982, Debtor's Chapter 11 case was converted by the Court to Chapter 7 of the United States Bankruptcy Code, and J. Coleman Tidwell, Trustee, was appointed trustee of Debtor's bankruptcy estate.
On July 2, 1984, the Trustee filed a complaint to avoid certain transfers of property Debtor made to Margaret C. Slocumb, as trustee for Robert Edward Slocumb, John T. Slocumb, William Ashley Slocumb, Liesl Paige Slocumb, Jennifer Lynne Slocumb, and Burke L. Slocumb, III, and Burke L. Slocumb, Jr., Defendants.1 Tri-State Machinery Company, Inc., Plaintiff, filed a motion to intervene was a plaintiff in this adversary proceeding on April 10, 1985. After a hearing was held on the motion, the Court, on April 10, 1985, granted Plaintiff's motion to intervene as a plaintiff. In its complaint filed as an intervening plaintiff on April 10, 1985, Plaintiff asserts a valid and enforceable interest in a certain SS-200A Motorola Radio Transmission Tower superior to any interest of the Trustee or Defendants.
On May 8, 1985, the parties submitted a pretrial order to the Court, and the Court signed an order on November 26, 1985, nunc pro tunc for May 9, 1985, making the pretrial order the final pretrial order in this adversary proceeding.2 On September 6, 1985, the Trustee filed a "Motion for Approval of Compromise and Settlement of Claims" pursuant to Bankruptcy Rule 9019.3 The Court signed a consent order on November 21, 1985, approving a compromise and settlement agreement between the Trustee and Defendants. Under the terms of the compromise and settlement agreement, the Trustee transferred any interest that Debtor's bankruptcy estate had in the radio tower to Mrs. Margaret Slocumb (Mrs. Slocumb).
On November 19, 1985, Plaintiff's complaint came on for trial. The Court, having considered the evidence presented and the arguments of counsel, now publishes its findings of fact and conclusions of law.
In 1973, a SS-200A Motorola Radio Transmission Tower (radio tower) was acquired and erected on Debtor's premises at Fuller Street in Macon, Georgia. A fact greatly in dispute is what entity acquired this radio tower. Plaintiff contends that the evidence supports a finding that Debtor originally acquired the radio tower, but Defendants disagree with this contention. Mrs. Slocumb and Mr. Gilbert Bennett, Debtor's certified public accountant, testified at the trial that the radio tower was originally purchased by Mrs. Lillian Slocumb and transferred for consideration to the Slocumb trusts before Mrs. Lillian Slocumb died. Mr. Burke Slocumb, Jr., testified that Debtor purchased the radio tower through work orders for the Slocumb trusts, and then the Slocumb trusts reimbursed Debtor.
Based upon the pretrial order, Plaintiff objects to any assertion by Defendants that any other entity than Debtor originally acquired the radio tower. Plaintiff contends that such an assertion raises a new factual allegation previously undisputed which cannot be raised unless the Court allows the pretrial order to be modified to prevent manifest injustice.4 After the trial, Defendants' counsel moved to amend the pretrial order to raise this factual allegation. Defendants' counsel asserts that the motion to amend should be granted because this factual allegation was unknown to him until shortly before trial, that Plaintiff's counsel was informed of this factual allegation well over one month before trial, and that in a nonjury proceeding, such as the one before the Court, leave to amend should be freely granted.
Rule 16(e) of the Federal Rules of Civil Procedure provides:
(e) Pretrial Orders. After any conference held pursuant to this rule, an order shall be entered reciting the action taken. This order shall control the subsequent course of the action unless modified by a subsequent order. The order following a final pretrial conference shall be modified only to prevent manifest injustice.
Fed.R.Civ.P. 16(e).5 The moving party has the burden of establishing such manifest injustice. Smith v. Ford Motor Co., 626 F.2d 784, 795 (10th Cir.1980), cert. denied, 450 U.S. 918, 101 S.Ct. 1363, 67 L.Ed.2d 344 (1981).
In determining whether a pretrial order should be amended under Rule 16, the Ninth Circuit Court of Appeals noted that:
United States v. First National Bank of Circle, 652 F.2d 882, 886-87 (9th Cir.1981) (). See also Hale v. Firestone Tire & Rubber Co., 756 F.2d 1322, 1335 (8th Cir.1985); Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1369, reh'g denied, 699 F.2d 1163 (5th Cir.1983) (); Donovan v. Hamm's Drive Inn, 661 F.2d 316, 317 (5th Cir. Unit A Sept. 1981);6 Smith, 626 F.2d at 795.
After carefully reviewing the pretrial order, the Court concludes that the factual allegation that Defendants wish to add is substantially contrary to the factual allegations set forth in the pretrial order. In the pretrial order, Defendants alleged that the Slocumb trusts acquired ownership of the radio tower from Debtor by operation of law when the radio tower was moved to the Jones County property because at that time it became a fixture upon the realty. If an amendment to the pretrial order is allowed, the issues to be addressed will be substantially different. The Court is persuaded that Plaintiff had knowledge before trial that Defendants would raise this new factual allegation at trial because Plaintiff's counsel received notice from Defendants' counsel over one month before trial that Defendants intended to raise this factual allegation. The Court, however, had no notice of Defendants' intent on the day of trial.
After carefully considering the pretrial order, the proposed amendment, and the purposes served by having a pretrial order, the Court concludes that Defendants should not be allowed to amend the pretrial order because they have not proven that such amendment is necessary to prevent manifest injustice. The Court notes that Defendants' counsel knew of this change in the factual allegation prior to trial, but neglected to move to amend the pretrial order. If Defendants' counsel had moved to amend the pretrial order prior to trial, the Court could have amended the pretrial order, removing the old factual allegation and adding the new factual allegation. Thus, the factual issues would have been properly raised before trial, and Plaintiff and the Court would have been fully apprised of the factual allegation. Based upon the evidence presented at trial, the Court further concludes that no manifest injustice would result in denying Defendants' motion because the evidence presented at trial does not support Defendants' new factual allegation.7 Accordingly, the Court will deny Defendants' motion to amend, and the Court finds that based upon the evidence, the radio tower was originally acquired by Debtor in 1973.
When the radio tower was first erected, it was approximately 200 feet tall. Approximately forty feet was added to the radio tower while it was located on Fuller Street. Debtor used the radio tower to communicate between its employees who were often at different jobsites.
On June 1, 1976, Mrs. Slocumb, as trustee for the Slocumb trusts, leased a one-acre tract of land located in Jones County, Georgia, to Debtor. The lease was for a ten-year term with monthly rental payments of $100. The terms of the lease specify that the premises are to be used "for the construction, operation and maintenance of a radio tower." The terms of the lease provide that if Debtor fails to pay the rent when it is...
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