Birting Fisheries, Inc. v. Lane (In re Birting Fisheries, Inc.)

178 B.R. 849
CourtDistrict Court, W.D. Washington
DecidedMarch 8, 1995
DocketNo. C94-1649Z
StatusPublished
Cited by1 cases

This text of 178 B.R. 849 (Birting Fisheries, Inc. v. Lane (In re Birting Fisheries, Inc.)) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Birting Fisheries, Inc. v. Lane (In re Birting Fisheries, Inc.), 178 B.R. 849 (W.D. Wash. 1995).

Opinion

ORDER

ZILLY, District Judge.

Debtor Birting Fisheries appeals the Bankruptcy Court’s order allowing a class proof of claim. Appellee “Lane Class” moves to dismiss the appeal on the ground that the parties’ “settlement agreement” renders moot the class proof of claim issue. The Court, having considered all papers filed in support of and in opposition to the motion to dismiss and the appeal of the Bankruptcy Court’s order, hereby DENIES the motion to dismiss the appeal, docket no. 3, and AFFIRMS the Bankruptcy Court’s order allowing the class proof of claim.

Background

The Lane Class consists of approximately 200 crew members who worked aboard Debt- or Birting Fisheries’ seafood processing trawler, Ocean Rover, between January 1, 1991 and April 2, 1993. In June 1993, the Lane Class filed a seaman’s wage class action against Birting Fisheries, seeking actual and punitive damages. In December 1993, Birt-ing Fisheries filed a bankruptcy petition under Chapter 11, which resulted in an automatic stay of the District Court action. The Bankruptcy Court subsequently granted relief from the automatic stay so that the Lane Class could liquidate its claims against Birt-ing Fisheries. The District Court action returned to active status, and in July 1994, the Honorable Carolyn R. Dimmiek certified the class pursuant to Fed.R.Civ.P. 23(b)(3). Order (cause no. C93-0827D, docket no. 36).

On September 16, 1994, the Bankruptcy Court issued an oral ruling ratifying the class representative’s authority to file a proof of claim on behalf of the Lane Class. Transcript of Proceedings, at 8 (docket no. 2). On September 19, 1994, the parties met and negotiated modifications to the Second Amended Plan of Reorganization. The relevant provision reads:

As to the Claims of the plaintiffs in the Lane Class Action Lawsuit, such Claims shall be Allowed to the extent they are Liquidated in the Lane Class Action Lawsuit either by compromise and settlement between the parties or by entry of a Final [850]*850Order, except that Claims for exemplary or punitive damages shall be Allowed by the Bankruptcy Court only in accordance with Article VII., ¶7.11, of this Plan.

Modifications to Second Amended Plan at 2, Exhibit G to Affidavit of Scott Collins (docket no. 5). The Bankruptcy Court confirmed the modifications.

The parties dispute the legal significance of the above-quoted modification. The Lane Class argues that the modification constitutes or evidences a settlement of the class proof of claim issue. In reliance on this interpretation, the Lane Class withdrew objections to confirmation of the Second Amended Plan, submitted new ballots voting as a class in favor of the modified plan, withdrew outstanding discovery requests, and struck a motion for continuance of the confirmation hearing. Debtor contends that the modification was a unilateral act of the plan proponent, and therefore, not equivalent to a settlement. In addition, Debtor argues that the modification did not include an express waiver of appeal rights, and that it did not otherwise relinquish the right to appeal the Bankruptcy Court’s order allowing the class proof of claim.

Analysis

A. Settlement

A party may not appeal an order to which it consented. Christian Science Reading Room Jointly Maintained v. City & County of San Francisco, 784 F.2d 1010, 1017, amended on other grounds, 792 F.2d 124 (9th Cir.1986), cert. denied, 479 U.S. 1066, 107 S.Ct. 953, 93 L.Ed.2d 1002 (1987). Likewise, a party may not appeal a settlement. Hudson v. Chicago Teachers Union, Local No. 1, 922 F.2d 1306, 1312 (7th Cir.1991), cert. denied, 501 U.S. 1230, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991); cf. Hawaiian Paradise Park Corp. v. Friendly Broadcasting Co., 414 F.2d 750, 752 (9th Cir.1969). A settlement, however, differs from a stipulation following an involuntary and adverse judgment. See Hudson, 922 F.2d at 1312.

Here, the parties offer numerous arguments in support of and against considering the modification a settlement of the class proof of claim issue. The bottom line, however, is that the parties began negotiating modifications to the plan of reorganization after the Bankruptcy Court had issued an oral ruling on the class proof of claim issue. The Bankruptcy Court having ruled on the issue, the parties had nothing to settle. In addition, neither the modification nor the various letters exchanged by counsel expressly waive the right to appeal the Bankruptcy Court’s ruling, and Debtor’s attempt to expedite confirmation of the reorganization plan in light of the Bankruptcy Court’s oral ruling does not appear inconsistent with an intent to appeal. See Central Wash. Bank v. Mendelson-Zeller, Inc., 113 Wash.2d 346, 354, 779 P.2d 697 (1989) (“To constitute implied waiver, there must exist unequivocal acts or conduct evidencing an intent to waive; waiver will not be inferred from doubtful or ambiguous factors.”); compare Hawaiian Paradise Park Corp. v. Friendly Broadcasting Co., 414 F.2d 750 (9th Cir.1969) (in a breach of contract action, the defendant did not waive its right of appeal, despite performing the contract of sale pursuant to the trial court’s ruling, because it sufficiently indicated its intent to reserve the right to appeal). Therefore, the Court DENIES the motion to dismiss the appeal.

B. Class Proof of Claim

The Ninth Circuit has not yet ruled on the propriety of a class proof of claim in a bankruptcy case. The Sixth, Seventh, and Eleventh Circuits, however, have all held that the bankruptcy code and rules authorize the filing of a class proof of claim. Reid v. White Motor Corp., 886 F.2d 1462 (6th Cir.1989), cert. denied, 494 U.S. 1080, 110 S.Ct. 1809, 108 L.Ed.2d 939 (1990); In re Charter Co., 876 F.2d 866 (11th Cir.1989), cert. dismissed, 496 U.S. 944, 110 S.Ct. 3232, 110 L.Ed.2d 678 (1990); In re American Reserve Corp., 840 F.2d 487 (7th Cir.1988). In addition, one bankruptcy court in the Ninth Circuit has published an opinion adopting the reasoning of the Seventh Circuit and subsequent cases following it. In re Mortgage & Realty Trust, 125 B.R. 575 (Bankr.C.D.Cal.1991).

Debtor cites in opposition In re Standard Metals Corp.,

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