Nat'l Med. Imaging Holding Co. v. U.S. Bank, N.A. (In re Nat'l Med. Imaging, LLC)

• Citation: 570 B.R. 147
• Decision Date: 30 June 2017
• Docket Number: Case No. 08–17348JKF,Case No. 08–17351JKF, Adv. No. 14–0251,Adv. No. 14–0250
• Parties: IN RE: NATIONAL MEDICAL IMAGING, LLC, Debtor In re: National Medical Imaging Holding Company, LLC, Debtor National Medical Imaging, LLC, and National Medical Imaging Holding Company, LLC, Plaintiffs v. U.S. Bank, N.A., et al., Defendants
• Court: United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Eastern District of Pennsylvania

570 B.R. 147

IN RE: NATIONAL MEDICAL IMAGING, LLC, DebtorIn re: National Medical Imaging Holding Company, LLC, DebtorNational Medical Imaging, LLC, and National Medical Imaging Holding Company, LLC, Plaintiffs

v.U.S. Bank, N.A., et al., Defendants

Case No. 08–17351JKF

Case No. 08–17348JKF

Adv. No. 14–0250

Adv. No. 14–0251

United States Bankruptcy Court, E.D. Pennsylvania.

Signed June 30, 2017

Steven M. Coren, David M. DeVito, Kaufman, Coren & Ress, P.C., Aris J. Karalis, Frank S. Marinas, Maschmeyer Karalis P.C., Philadelphia, PA, for Plaintiffs.

Steven J. Adams, Stevens & Lee, Reading, PA, Peter H. Levitt, Shutts & Bowen, LLP, Miami, FL, Amy E. Vulpio, White and Williams LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

RICHARD E. FEHLING, United States Bankruptcy Judge

I. INTRODUCTION

Before me for disposition are the motions filed by Defendants, U.S. Bank, N.A. ("U.S. Bank"), Lyon Financial Services, Inc., d/b/a U.S. Bank Portfolio Services ("Lyon"),¹ DVI Receivables XIV, LLC, DVI Receivables XVI, LLC, DVI Receivables XVII, LLC, DVI Receivables XVIII, LLC, DVI Receivables XIX, LLC (together, "DVI Defendants"), DVI Funding, LLC ("DVI Funding"), Ashland Funding, LLC ("Ashland") and Jane Fox ("Fox") (together, "Defendants") to dismiss these amended adversary complaints (together, the "Motions"). For the reasons that follow, I find that some of the arguments raised by Defendants are premature and others lack merit. I will therefore deny the Motions.

II. BACKGROUND

A. Factual Background.

On or about October 12, 2005, Plaintiffs, National Medical Imaging, LLC, National Medical Imaging Holding Company, LLC (together, "NMI") and Maury Rosenberg ("Rosenberg"), the Managing Member of NMI, and certain affiliated entities entered into a Settlement Agreement with the DVI Defendants and DVI Funding to resolve a dispute relating to certain equipment leases (the "Master Leases"). The DVI Defendants and DVI Funding were the lessors under the Master Leases, while Lyon functioned as servicer. Rosenberg executed an Individual Limited Guaranty and NMI executed Unconditional Continuing Guarantees (together, "Guarantees") of certain obligations under the Settlement Agreement. Pursuant to the Portfolio Sale Agreement dated March 2, 2007, Ashland acquired DVI Funding's right, title and interest in certain contracts, including some of the Master Leases that were the subject of the Settlement Agreement and Guarantees.

B. Procedural Background.

On November 7, 2008, the DVI Defendants and DVI Funding filed involuntary bankruptcy petitions against NMI and Rosenberg. The involuntary petitions were signed by Fox. Fox signed the involuntary petitions on behalf of the DVI Defendants and DVI Funding as follows, "Jane Fox c/o US Bank Portfolio Services, as Servicer." These involuntary petitions were filed in the Philadelphia Division of this court and assigned to Judge Jean FitzSimon. On November 10, 2008, first amended involuntary petitions were filed against NMI and Rosenberg to add the names of related bankruptcy cases. On December 3, 2008, Rosenberg moved to dismiss or, alternatively, to transfer venue of the involuntary petition filed against him to his domicile in southern Florida. On December 4, 2008, NMI filed motions to dismiss the involuntary petitions filed against them pursuant to 11 U.S.C. § 303(b)(l) and Fed. R. Bankr. P. 1011(b). A status hearing was held on these motions on January 21, 2009, at which time the parties discussed whether discovery was necessary and the DVI Defendants and DVI Funding agreed to Rosenberg's motion to change venue. By Order dated January 30, 2009, Judge FitzSimon transferred the Rosenberg Case to the Bankruptcy Court for the Southern District of Florida and it was assigned to Judge Jay Cristol. The Rosenberg Case was then closed in this Court.

On March 24, 2009, Judge FitzSimon entered a Pre–Trial Order addressing discovery and scheduling an evidentiary hearing on May 1, 2009 to hear NMI's motions to dismiss the involuntary petitions. This hearing was adjourned generally by her order dated April 20, 2009.

On April 10, 2009, the DVI Defendants and Ashland had filed their second amended involuntary petitions against NMI to substitute Ashland for DVI Funding as one of the six petitioning creditors.² The second amended involuntary petitions were signed by Fox on behalf of the DVI Defendants as follows "c/o Jane Fox, Lyon Financial Services, Inc. d/b/a US Bank Portfolio Services, as Successor Servicer and Agent for [the DVI Defendants]." She signed the second amended involuntary petitions on behalf of Defendant Ashland Funding as follows: "Ashland Funding, LLC, successor to DVI Funding, LLC, 196 W. Ashland St., Doylestown, PA."

On May 13, 2009, NMI filed motions to strike the second amended involuntary petitions. On the same day, the five remaining DVI Defendants³ and Ashland filed motions for leave to file third amended involuntary petitions against NMI to correct an error that had been made in the calculation of the amounts allegedly owed by NMI to the DVI Defendants and Ashland. NMI filed objections to these motions on June 1, 2009.

On August 11, 2009, the NMI involuntary cases were assigned to me by Judge FitzSimon. On August 24, 2009, I held oral argument on NMI's motions to strike the second amended involuntary petitions and on the motions filed by the DVI Defendants and Ashland for leave to file third amended involuntary petitions against NMI. I entered bench orders at the conclusion of the oral arguments denying NMI's motions to strike the second amended involuntary petitions and granting the motions filed by the DVI Defendants and Ashland for leave to file third amended involuntary petitions against NMI. Third amended involuntary petitions were filed against NMI by the DVI Defendants and Ashland on August 26, 2009. The third amended involuntary petitions were signed by Fox as follows, "c/o Jane Fox, Lyon Financial Services, Inc. d/b/a US Bank Portfolio Services, as Successor Servicer and Agent..." She signed the third amended involuntary petitions on behalf of Ashland as follows: "Ashland Funding, LLC, successor to DVI Funding, LLC, 196 W. Ashland St., Doylestown, PA."

In the evening of August 24, 2009, the parties received notice that Judge Cristol had dismissed with prejudice the involuntary bankruptcy petition filed against Rosenberg. As a result, on August 25, 2009, NMI filed expedited motions for determination of collateral estoppel and postponement of evidentiary hearings on motions to dismiss (which were scheduled to commence that day). Expedited argument was held on these motions that day, after which a briefing order was entered and further argument was scheduled to be held on September 22, 2009. On December 28, 2009, I decided that at least three of Judge Cristol's six alternative holdings were entitled to collateral estoppel effect in the NMI involuntary petitions pending before me. I therefore entered Opinions and Orders that day granting NMI's motions for determination of collateral estoppel and dismissing the involuntary petitions with prejudice.

On January 4, 2010, NMI filed motions to award attorneys' fees and costs and for compensatory, consequential, special, and punitive damages for the bad faith filing of the involuntary petitions. These motions named the following parties as respondents: (1) The DVI Defendants, (2) DVI Funding, (3) Ashland, (4) Fox, individually and as a corporate representative of Lyon; (5) Lyon, (6) Robert Pinel, Esquire, individually and as a partner of Flamm, Boroff & Pacine, P.C., (7) Flamm, Boroff & Pacine, P.C., (8) Robert Brier, individually and as a shareholder/partner of BG Management Services, Inc., (9) BG Management Services, Inc. and (10) U.S. Bank.

Also on January 4, 2010, NMI filed expedited motions to, inter alia, clarify whether I determined that the involuntary petitions were filed in bad faith, confirm the persons and entities subject to the court's jurisdiction, and request leave to file an adversary complaint. On January 11, 2010, the DVI Defendants and Ashland filed motions to reconsider my December 28, 2009 decision granting NMI's motions for determination of collateral estoppel and dismissal of the involuntary petitions. I conducted a status conference among the parties on January 14, 2010. Because a motion to reconsider Judge Cristol's decision dismissing the involuntary petition filed against Rosenberg was pending before Judge Cristol, and because my December 28, 2009 decision gave collateral estoppel effect to Judge Cristol's decision, on January 14, 2010, I stayed all proceedings in the NMI cases that related in any way to the dismissal of the involuntary petitions pending resolution by Judge Cristol of the motion for reconsideration pending before him.

On October 7, 2010, Judge Cristol denied the motion for reconsideration of his decision dismissing the Rosenberg involuntary petition with prejudice. On October 18, 2010, the petitioning creditors in the Rosenberg case filed a notice of appeal of Judge Cristol's decision to the United States District Court for the Southern District of Florida. On October 15, 2010, the DVI Defendants and DVI Funding filed motions to vacate my stay orders. I held hearings on these motions on December 1, 2010. On January 6, 2011, I denied the motions to vacate the stay orders, deferring my consideration of the reconsideration motions before me until the outcome of the Rosenberg bankruptcy case appeal. I also deferred my consideration of the sanctions motions until the outcome of the reconsideration motions before me.

The District Court for the Southern District of Florida affirmed Judge Cristol's decision dismissing the Rosenberg involuntary petition with prejudice on September 28, 2011. The District Court decision was affirmed by the 11^th Circuit Court of Appeals on July 6, 2012 and no additional appeals were filed.

Nothing more was filed in this court for a year and a half. On December 18, 2013, NMI filed ...