Adams County Asphalt Co. v. Oldcastle, Inc. (In re Adams County Asphalt Co.)

501 B.R. 260
CourtUnited States Bankruptcy Court, M.D. Pennsylvania
DecidedSeptember 26, 2013
DocketBankruptcy No. 1-03-bk-00722-JJT; Adversary No. 1-08-ap-00064-JJT
StatusPublished

This text of 501 B.R. 260 (Adams County Asphalt Co. v. Oldcastle, Inc. (In re Adams County Asphalt Co.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adams County Asphalt Co. v. Oldcastle, Inc. (In re Adams County Asphalt Co.), 501 B.R. 260 (Pa. 2013).

Opinion

OPINION

JOHN J. THOMAS, Bankruptcy Judge.

Pending is an Amended Complaint filed by the Debtor, Adams County Asphalt Company (ACA), against Oldcastle, Inc. and Pennsy Supply, Inc., Defendants, on September 21, 2010. Subsequently, the Defendants filed a Motion for Summary Judgment.

The aged litigation history between the parties is replete with events, the repetition of which would merely serve to confuse an already convoluted relationship. Suffice it to say only those facts that impact this disposition will be recited here.

The allegations of the Amended Complaint are, on August 15, 1995, the owner1 of a certain quarry located in Dauphin County, Pennsylvania, known as Fiddlers Elbow Quarry, entered into a lease of the property with Pennsy Supply2. On the same date, Pennsy entered into an “Asset Purchase Agreement” with ACA and Gemini, a related debtor entity, to purchase certain materials on site. The Agreement was for a term of five years. ACA asserts in the Complaint the Quarry Lease and the Asset Purchase Agreement are no longer valid. Doc. #81 at ¶ 67. ACA identifies itself as a “third party beneficiary,” though, in the absence of a reference to a specific agreement, it is difficult to fathom as to what ACA is a third party beneficiary of. ACA argues it is without an adequate remedy at law.

The Defendants assert, in their Motion for Summary Judgment, an arbitration between the parties to the lease and/or their successors, after the Complaint was filed and commenced in accordance with the contract terms, has concluded Pennsy is in proper possession and the lease is valid until 2015. ACA is an affiliate of the owner party to the contract. On the other hand, ACA asserts the arbitration is viola-tive of the automatic stay of bankruptcy since ACA claims to have been granted certain rights by the owner. ACA suggests the arbitration is void as to it since the automatic stay was in effect at the time the decision was rendered.

In brief summary, this is the background of this litigation. All of this may be of little significance if this Court has not the jurisdiction to adjudicate the case.

Stern v. Marshall, - U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011) has revisited the jurisdictional swath of the bankruptcy court. Nuveen Municipal Trust has reminded me a trial court has an independent obligation to review its jurisdiction, even if not challenged. Nuveen Mun. Trust ex rel. Nuveen High Yield Mun. Bond Fund v. WithumSmith Brown, P.C., 692 F.3d 283, 293 (3rd Cir.2012).

I begin with the premise the Debtor here is asserting a claim, it says, predates the bankruptcy filing. I think it fair to conclude this Court, generally, has non-core jurisdiction to hear prepetition claims. Beard v. Braunstein, 914 F.2d 434, 443 (3rd Cir.1990). These are related [263]*263matters which neither arise under title 11 or arise in a bankruptcy ease. 28 U.S.C. § 157(b)(1). The date the Complaint was initiated also plays a role in determining my ability to adjudicate the controversy. ACA’s Chapter 11 Plan has been confirmed, but this Complaint was filed prior to confirmation. Jurisdiction is determined at the time the action is begun. If an action is brought after confirmation, the Court’s jurisdiction “wanes.” Numen Mun. Trust, 692 F.3d at 294. I conclude I have non-core jurisdiction of this controversy.

Discussion

That brings me to the matter at issue being the Motion for Summary Judgment filed by the Defendants.

Rule 56(a), incorporated into the Bankruptcy Rules by Rule 7056, states:

A party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law....

Summary judgment applies where there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law, Fed.R.Civ.P. 56(c), i.e., “[wjhere the record taken as a whole could not lead a rational trier of fact to find for the non-moving party....” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

The Amended Complaint is inarticulate. It advances three Counts, Count I, quasi-contract / unjust enrichment / quantum meruit; Count II, promissory estoppel; and Count III, turnover of property to the debtor’s estate pursuant to 11 U.S.C. § 542. Notwithstanding the labels, ACA appears to base its claims on the following: (1) breach of the Asset Purchase Agreement to which ACA was a party; (2) breach of an unspecified agreement that may have provided, among other things, a commitment to make product available to ACA at a discounted price; (3) breach of the Quarry lease, to which ACA was a third party beneficiary; and (4) inability to exercise rights given to it by the owner which has been denied possession by the Defendants.

The Defendants state the statute of limitation would have expired on an action arising out of the August 15, 1995, Asset Purchase Agreement. This argument appears to be well-founded. Pennsylvania law would apply to the interpretation of the Agreement. Doc. # 1-2 at ¶ 18. 1. The statute of limitation for contract actions is four years. 42 Pa.C.S.A. § 5525. The conclusion appears inescapable ACA’s ability to litigate a claim arising out of the Asset Purchase Agreement would have expired in 2004. It is possible this period could have been extended by the intervening bankruptcy in 2003, but that extension would be limited to two years. 11 U.S.C. § 108(a)(2). The initial complaint by the Debtor against the Defendants was not filed until after that two years had expired. Doc. # 1, l:06-ap-00161-JJT. The undisputed material facts allow me to conclude no cause of action could arise under the Asset Purchase Agreement since the statute of limitations has run its course. No equitable claim could arise out of its breach since equitable remedies are generally not available where the parties have entered into an express contract. Mitchell v. Moore, 729 A.2d 1200, 1203 (Pa.Super.1999).

This conclusion may not necessarily require judgment in favor of the Defendants [264]*264on all the Counts of the Complaint. The Debtor appears to vaguely argue rights given to it as an “affiliate” of the owner have been wrongfully denied it by the Defendants.

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Bluebook (online)
501 B.R. 260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adams-county-asphalt-co-v-oldcastle-inc-in-re-adams-county-asphalt-pamb-2013.