Reyes v. Standard Parking Corp.

• Decision Date: 14 June 2011
• Docket Number: CA. No. 09-166 S
• Parties: MELISSA M. REYES, Plaintiff, v. STANDARD PARKING CORPORATION, Defendant / Third-party Plaintiff, v. HENRY M. LUKE, CO., INC., ALLIEDBARTON SECURITIY SERVICES, LLC, AND ROUSE PROVIDENCE, LLC, Third-Party Defendants.
• Court: U.S. District Court — District of Rhode Island

MELISSA M. REYES, Plaintiff,

v.STANDARD PARKING CORPORATION, Defendant / Third-party Plaintiff,

v.HENRY M. LUKE, CO., INC., ALLIEDBARTON SECURITIY SERVICES, LLC,AND ROUSE PROVIDENCE, LLC, Third-Party Defendants.

CA. No. 09-166 S

UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND

Date: June 14, 2011

MEMORANDUM AND ORDER

WILLIAM E. SMITH, United States District Judge.

In this matter, Third-party Defendant Rouse Providence, LLC ("Rouse") seeks summary judgment under Fed. R. Civ. P. 56(c) against Third-party Plaintiff Standard Parking Corporation's ("Standard") claims for contribution, common-law indemnity, and breach of contract. For the reasons set forth below, Rouse's motion for summary judgment is GRANTED.

I. Background

Rouse owns the Providence Place mall, a shopping, dining, and entertainment destination located in Providence, Rhode Island. On January 16, 2006, Rouse executed a contract with Standard (the "Management Agreement") whereby Standard agreed tomanage the mall's parking garage through September 30, 2008. The Management Agreement obligated Rouse, in the event it employed other contractors to perform work in the garage, to use its best efforts to require those contractors to indemnify Standard for all claims arising out of their work. On June 2, 2008, Rouse contracted with Henry Luke, Co., Inc. ("Luke") to perform repairs to the garage (the "Rouse-Luke Contract"); however the contract did not contain the indemnification language required by the Management Agreement.

The Plaintiff in this case, Melissa Reyes ("Reyes"), alleges that while she was driving through the Mall's parking garage on June 10, 2008, a piece of concrete fell from its ceiling and struck and damaged her vehicle, causing her bodily injury. On April 8, 2009, she sued Standard in tort alleging negligence. Standard then filed a third-party complaint for contribution and common law indemnity against Luke on July 31, 2009. Standard has since amended its complaint twice, adding third-party Defendant AlliedBarton Security Services, LLC¹ on April 9, 2010 and Rouse on June 7, 2010. In its second amended complaint, Standard added an additional breach of contract claim against Rouse for failing to require Luke to indemnify Standard as per the Management Agreement.

On April 16, 2009, about a week after Reyes served Standard with her negligence suit, Rouse's parent company, General Growth Properties ("GGP"), petitioned for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). See In re Gen. Growth Props., Inc., No. 09-11977-alg (Bankr. S.D.N.Y.). On September 25, 2009, the Bankruptcy Court issued an order establishing November 12, 2009 as the bar date for Rouse's creditors to file a proof of claim against GGP/Rouse for any claims arising prior to its April 16, 2009 bankruptcy petition date (i.e., prepetition). (See Rouse's Mot. for Summ. J. Ex. 2, ECF No. 62.) Neither Standard nor Reyes filed a proof of claim by the bar date. The Bankruptcy Court subsequently issued an order and notice confirming Rouse's bankruptcy plan (the "Confirmation Order"). The Confirmation Order discharged all claims against Rouse arising prior to March 8, 2010 and enjoined creditors from taking any action related to such claims, including filing a lawsuit. (See Rouse's Mot. for Summ. J. Ex. 3, ECF Nos. 63, 64.)

On February 2, 2011, Rouse filed the present motion seeking summary judgment against Standard's claims. Rouse asserts that Standard is enjoined from pursuing these claims because they were permanently discharged pursuant to the Bankruptcy Court's order confirming Rouse's chapter 11 reorganization. Standardcounters that its claims were not subject to the bar date or the Confirmation Order because they had not arisen as of Rouse's bankruptcy petition date, but even if they had, they remain valid because it did not receive adequate notice of the bar date.

II. Legal Standard

Summary judgment may be granted only where there are no genuine issues of material fact. Davila v. Corporacion de P.R. para la Difusion Publica, 498 F.3d 9, 12 (1st Cir. 2007). There is a genuine issue of material fact where "a reasonable jury could resolve the point in favor of the nonmoving party" in a way that would be outcome determinative. Velez-Rivera v. Agosto-Alicea, 437 F.3d 145, 150 (1st Cir. 2006) (quoting United States v. One Parcel of Real Prop., 960 F.2d 200, 204 (1st Cir. 1992)).

III. Standard's compliance with the Bankruptcy Court's orders

The Bankruptcy Court's bar date order established November 12, 2009 "as the last date and time" for Rouse's creditors "to file a proof of claim [] based on prepetition claims against [Rouse]." (Rouse's Mot. for Summ. J. Ex. 2, at 1, ECF No. 62.). "Under the Bankruptcy Code proof of claims must be presented to the Bankruptcy Court for administration, or be lost when a plan of reorganization is confirmed." NLRB v. Bildisco and Bildisco,465 U.S. 513, 529, (1984) (addressing a Chapter 11 reorganization) (citing 11 U.S.C. §§ 501, 502 and 1141).

With limited exceptions, confirmation of a chapter 11 bankruptcy plan "discharges the debtor from any debt that arose before the date of such confirmation." See 11 U.S.C. § 1141(d)(1)(A). Under the Bankruptcy Code, the term "debt" includes "liability on a claim," 11 U.S.C. § 101(12), and a "claim" is defined as:

(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or

(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

11 U.S.C. § 101(5). In enacting this provision, "Congress gave the term 'claim' the 'broadest available definition.'" Rederford v. US Airways, Inc., 589 F.3d 30, 35-36 (1st Cir. 2009) (quoting F.C.C. v. NextWave Pers. Commc'ns, 537 U.S. 293, 302, (2003)).

The Court turns first to Standard's contribution and common-law indemnity claims. Standard asserts that its contribution claim did not exist prepetition because, as required under Rhode Island law, it had (and has) not beenadjudged a joint tortfeasor with Rouse nor discharged any shared liability to Reyes. (See Rouse's Mem. in Supp. of Mot. for Partial Summ. J. 7, ECF No. 73 (citing R.I. Gen. Laws § 10-6-4).) Standard also asserts that its Rhode Island common-law indemnification claim did not exist prepetition because "[a]t the time of Rouse's bankruptcy filing, there was no allegation that the prospective indemnitor, Rouse, was liable to the prospective indemnitee, Standard." (Id. at 7-8 (citing Wilson v. Krasnoff, 560 A.2d 335, 341 (R.I. 1989); Hawkins v. Gadoury, 713 A.2d 799, 803 (R.I. 1998)).)

However, Standard's arguments seem to conflate having a valid cause of action under Rhode Island law with the existence of a "claim" under federal bankruptcy law. It is well established that "[t]he accrual of a cause of action under state law does not determine when a claim arises under the Bankruptcy Code . . . because the Code defines 'claim' to include contingent and unmatured claims, which may not yet constitute a cause of action under state law." In re Designer Doors, Inc., 389 B.R. 832, 837-38 (Bankr. D. Ariz. 2008); see also Woburn Assocs. v. Kahn (In re Hemingway Transport, Inc.), 954 F.2d 1, 9 n.9 (1st Cir. 1992) (collecting cases holding that Congress did not intend Bankruptcy Code "claim criteria to turn on the peculiarities of state law, the timing of a lawsuit, or the claimant's failure to anticipate specific futurecontingencies"); In re M.A.S. Realty Corp., 318 B.R. 234, 237 (Bankr. D. Mass. 2004) ("Section 101(5) expressly included within the purview of claim a cause of action or right to payment that has not yet accrued or become cognizable." (citing Cool Fuel, Inc. v. Bd. of Equalization of Calif. (In re Cool Fuel, Inc.), 210 F.3d 999, 1006 (9th Cir. 2000) ("It is well-established that a claim is ripe as an allowable claim in a bankruptcy proceeding even if it is a cause of action that has not yet accrued."))); In re R.H. Macy & Co., 283 B.R. 140, 146 (S.D.N.Y. 2002) ("[A] creditor need not have a cause of action that is ripe for suit outside of bankruptcy in order for it to have a prepetition claim for purposes of the Bankruptcy Code.") (internal citation omitted).

Because Rouse owned when Reyes' was injured, Standard, as manager of the garage, received a "contingent" right to payment for contribution and common-law indemnification the moment Reyes served Standard with her negligence suit on April 9, 2009. 11 U.S.C. § 101(5)(A); see also Rederford, 589 F.3d at 36 ("[T]he inclusion of contingent claims in § 101(5)(A), ensures that even the most uncertain and difficult to estimate claims can be adjudicated in the bankruptcy proceedings.") (quotation and citation omitted). Standard was served approximately one week before Rouse petitioned for bankruptcy. Thus, Standard's contribution and common-law indemnification claims aroseprepetition, albeit contingently, within the meaning of 11 U.S.C. § 101(5).

Standard's breach of contract claim is a bit stickier because it presents a twist on the typical contractual indemnification claim in the bankruptcy context, where a debtor/indemnitor's liability arises out of its refusal to pay an indemnitee. For instance, if the Management Agreement had obligated Rouse to indemnify Standard directly, then Standard's breach of contract claim undoubtedly would be considered prepetition. In re Hemingway, 954 F.2d at 9 n.9 ("When parties agree in advance that one party will indemnify the other party in the event of a certain occurrence," a contingent right to payment exists "upon the signing of the agreement.") (quotation and citation omitted). Here, however, the liability of the...