Thomas v. Tennison Bros., Inc. (In re Thomas)
| Decision Date | 29 May 2020 |
| Docket Number | Adv. Proc. No. 20-00038,Case No. 16-27850-L |
| Parties | In re WILLIAM H. THOMAS, JR., Debtor. Lynn Schadt Thomas, Plaintiff, v. Tennison Brothers, Inc. and Clear Channel Outdoor, Inc., Defendants. |
| Court | U.S. Bankruptcy Court — Western District of Tennessee |
The following is ORDERED:
BEFORE THE COURT are motions filed by the Defendants asking the court to dismiss portions of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and/or to strike numerous paragraphs of the complaint pursuant to Federal Rule of Civil Procedure 12(f). [Dkt. Nos. 7 and 8]. The Plaintiff filed a timely response on April 27, 2020. [Dkt. No. 17]. The motions are ripe for decision.
This adversary proceeding was commenced with the filing of a Complaint for Declaratory Relief and for Legal Subordination, Equitable Subordination, and Disallowance of the Claims of Tennison Brothers, Inc., and Clear Channel Outdoor, Inc., on February 25, 2020 (the "Complaint"). [Dkt. No. 1].
The adversary proceeding is related to the Chapter 11 bankruptcy case of William H. Thomas, Jr., filed June 2, 2016, in the United States Bankruptcy Court for the Northern District of Florida.
The case was transferred to this court on August 29, 2016. The case was assigned to Chief Bankruptcy Judge David S. Kennedy.
On January 18, 2019, Judge Kennedy granted the motion of Clear Channel, Inc., seeking appointment of a Chapter 11 trustee. In re Thomas, 596 B.R. 350 (Bankr. W.D. Tenn. 2019). Michael E. Collins was appointed trustee pursuant to the recommendation of the United States Trustee on January 24, 2019.
The case was transferred to the underlying bankruptcy judge by order entered January 14, 2020.
Underlying the bankruptcy case is a dispute between the Debtor and the Defendants dating back to the summer of 2004 over the erection of what is known as the Southern Millworks billboard by the Debtor.1 The facts concerning their dispute are fully set out in the opinion of the Court of Appeals of Tennessee in Tennison Bros., Inc. v. Thomas, 556 S.W.3d 697 (Tenn. Ct. App. 2017) ("Tennison II"). The Supreme Court of Tennessee denied the Debtor permission to appeal.Tennison Bros., Inc. v. Thomas, No. W2016-00795-SC-R11-CV, 2018 Tenn. LEXIS 267 (Tenn. Apr. 23, 2018).
In its opinion, the Tennessee Court of Appeals affirmed judgments of the Chancery Court awarding Tennison Brothers, Inc. ("Tennison Brothers") $1,094,670.94, and Clear Channel Outdoor, Inc. ("Clear Channel") $3,906,000, in damages after the Debtor (the defendant in that case) refused to abide by orders of the chancellor and cooperate in discovery (the "Chancery Court Judgments").
Based upon the Chancery Court Judgments, Tennison Brothers timely filed Proof of Claim Number 7 in the amount of $1,094,670.94, on July 26, 2016, and Clear Channel timely filed Proof of Claim Number 4, in the amount of $3,906,000.00, on June 9, 2016. Clear Channel later amended the amount of its claim to $4,035,487.60.
Both Tennison Brothers and Clear Channel filed complaints against the Debtor in the bankruptcy court seeking a determination that their claims would be excepted from discharge. Judge Kennedy granted summary judgment for both Tennison Brothers and Clear Channel on October 18, 2018, declaring both claims to be nondischargeable. "Memorandum and Order on Plaintiff's Fed. R. Bankr. P. 7056 Motions for Summary Judgment Combined with Notice of the Entry Thereof," In re Thomas, No. 16-00260, 2018 WL 6690593, *10 ("Kennedy Opinion I"). The Debtor appealed the decision of Judge Kennedy to the United States District Court. On August 13, 2019, District Judge Sheryl H. Lipman entered her Order Affirming Bankruptcy Court Decision in Thomas v. Tennison Bros., Nos. 2:18-cv-02794-SHL-dkv, and 2:18-cv-02797-SHL-dkv (W.D. Tenn. August 13, 2019) ("Lipman Opinions"). The Debtor's request for rehearing was denied. Thomas v. Tennison Bros., Nos. 2:18-cv-02794-SHL-dkv, and 2:18-cv-02797-SHL-dkv(W.D. Tenn. March 13, 2020). The Debtor has an appeal pending before the United States Court of Appeals for the Sixth Circuit.
On March 25, 2013, while the state court litigation was proceeding, the Debtor filed a "Complaint and Request for Declaratory Judgment against the Tennessee Department of Transportation ("TDOT")" in the United State District Court for the Western District of Tennessee, Thomas v. Tennessee Dep't of Transp., No. 2:13-cv-2185-JPM-cgc. This complaint sought relief under 28 U.S.C. § 1983 for alleged violations of the Debtor's First and Fourteenth Amendment rights under the United States Constitution based upon TDOT's take down order of another billboard (the "Crossroads Ford Billboard"). This complaint was dismissed based upon the immunity of TDOT from suit. The Debtor appealed and the decision was affirmed on appeal. Thomas v. Tennessee Dep't of Transp., No. 13-6544, slip op. (6th Cir. Aug. 6, 2014).
While that appeal was pending, however, the Debtor filed a second complaint which named multiple state officials in their official capacities as defendants, Thomas v. Schroer, No. 2:13-2987-JPM-cgc (W.D. Tenn.). The Debtor argued, among other things, that his Crossroads Ford Billboard was entitled to First Amendment protection as a display of non-commercial speech and that TDOT had filed the Chancery Court action in retaliation against the Debtor. After a four-day trial before an advisory jury, and extensive briefing by the parties and amici curiae, District Judge Jon Phipps McCalla issued his Order and Memorandum Finding Billboard Act an Unconstitutional, Content-Based Regulation of Speech, Thomas v. Schroer, 248 F. Supp. 3d 868 (W.D. Tenn. 2017), in which the court declared the Tennessee Billboard Act, Tennessee Code Annotated §§ 54-21-101 et seq., to be an unconstitutional, content-based regulation of speech. TDOT's motion for rehearing was denied. 2017 WL 6489144. On appeal to the United States Court of Appeals for the Sixth Circuit, the judgment of the district court was affirmed in Thomasv. Bright, 937 F.3d 721 (6th Cir. 2019). TDOT's motion for rehearing en banc was denied on November 6, 2019. A petition for writ of certiorari to the United States Supreme Court is pending.
The only issue before this court in Kennedy Opinion I was the question of dischargeability. The question of the allowance of the claims of Tennison Brothers and Clear Channel was not before the court. The Debtor filed the first objections to these claims on November 8, 2018, shortly after Kennedy Opinion I was entered. The basis of the Debtor's objection was the decision of Judge McCalla concerning the Tennessee Billboard Act and the assertion that "[n]o Tennessee law, including the Billboard Act prevented Clear Channel from constructing a billboard on the Tennison Brothers property during the periods Clear Channel twice held valid Tennessee billboard permits." Debtor's Objections to Proof of Claim No. 4 Filed by Clear Channel Outdoor, Inc. and Proof of Claim No. 7 Filed by Tennison Brothers, Inc., November 11, 2018. [Bankr. Dkt. No. 451].
The Debtor filed a Combined Motion for Summary Judgment and Memorandum in Support of his objections on November 9, 2018 [Bankr. Dkt. No. 455], and a Supplement to Combined Motion for Summary Judgment Filed by Debtor (ECF #455) on November 26, 2018. [Bankr. Dkt. No. 463]. The Debtor argued that the claims of Tennison Brothers and Clear Channel should be disallowed because they were predicated upon his violation of a state court statute which had been declared unconstitutional which rendered the judgments invalid. While that motion was pending, the Debtor filed his Motion for Leave Pursuant to Bankruptcy Rule 8004 for Appeal Under 28 U.S.C. § 158(a)(3) on December 21, 2018 [Bankr. Dkt. No. 507], in which to appeal "(not a court order but) this Court's calendar agenda of proceedings." "Memorandum and Order re 'Debtor's Motion for Leave Pursuant to Bankruptcy Rule 8004 for Appeal under 28 U.S.C. § 158(a)' Combined with Notice of the Entry Thereof." [Bankr. Dkt. No. 525] ("Kennedy Opinion II"). In Kennedy Opinion II, Judge Kennedy denied the Debtor's motion for permissionto appeal and, in the process, reviewed his findings and conclusions from Kennedy Opinion I that Tennison Brothers and Clear Channel hold both tort and non-tort claims against the estate. Judge Kennedy noted that "those decisions concomitantly also give rise to the triggering of the doctrine of 'law of the case' [i.e., that Tennison Brothers and Clear Channel hold valid, nondischargeable claims against the estate]." Kennedy Opinion II, p. 6.
Judge Kennedy ultimately denied the Debtor's motion for summary judgment on his objections to the claims of Tennison Brothers and Clear Channel in his "Memorandum and Order re 'Debtor's Combined Motion for Summary Judgment and Memorandum in Support' and Notice of the Entry Thereof." [Bankr. Dkt. No. 640] ("Kennedy Opinion III"). In Kennedy Opinion III, Judge Kennedy noted that the Debtor was "once again asking this Court to review the final judgments in favor of Clear Channel and Tennison Brothers, which were rendered by the Tennessee Chancery Court and later affirmed by the Tennessee Court of Appeals," and that "This Court has reiterated on several occasions that it is not a reviewing or relitigating court (or a 'legal playground')." Id., slip op. at 5.
After denying the Debtor's motion for summary judgment, Judge Kennedy issued his order denying the Debtor's objections to the claims of Tennison Brothers and Clear Channel on April 2, 2019, in his [Bankr. Dkt. No. 643] ("Kennedy Opinion IV"). Kennedy Opinion IV "integrates in its entirety"...
To continue reading
Request your trial