Fahringer v. Bohne (In re Victor Distributing Co.)

14 B.R. 136, 1981 Bankr. LEXIS 2953
CourtDistrict Court, E.D. Virginia
DecidedSeptember 17, 1981
DocketBankruptcy No. 75-262-A
StatusPublished

This text of 14 B.R. 136 (Fahringer v. Bohne (In re Victor Distributing Co.)) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fahringer v. Bohne (In re Victor Distributing Co.), 14 B.R. 136, 1981 Bankr. LEXIS 2953 (E.D. Va. 1981).

Opinion

MEMORANDUM OPINION

MARTIN V. B. BOSTETTER, Jr., Bankruptcy Judge.

This matter came on for hearing upon motions brought by Victor T. Fahringer, Jr., as plaintiff, and Pittsburgh Sheetmetal Company, Inc., Frank G. Proie and other named defendants in Victor T. Fahringer, Jr. v. Werner M. Bohne, et al, 11 B.R. 242 (Bkrtcy.E.D.Va.A.D.) for partial reconsideration of an Order and Memorandum Opinion entered by this Court on May 11, 1981. This Order granted partial summary judgment for the defendants in the above-styled adversary proceeding brought by Fahringer.

The defendants Pittsburgh Sheetmetal and Proie raised four specific issues regarding this Court’s Order of May 11, 1981. These issues relate to the Court’s denial of summary judgment with respect to the following counts of the Complaint: (1) Sub-paragraph 12(i) of Count Two; (2) Paragraphs 18 and 19 of Count Five; (3) Paragraph 22 of Count Six; and Subparagraph 12(f) of Count Two and Count Eight.1 The efficacy of the Court’s ruling on each of these issues will be discussed seriatim.

The defendants request that the Court reconsider its decision not to dismiss subparagraph 12(i) of Count Two. They note that the Court dismissed subparagraph 12(g) of Count Two wherein it was alleged that the defendants had improperly incurred $400,000.00 in new debts for the debtor corporation. The defendants assert that the Court’s rationale for dismissing subparagraph 12(g) (See Memorandum Opinion, 11 B.R. at 246-47) should apply to subparagraph 12(i) as well, inasmuch as the [138]*138latter also alleges an improper inventory build-up. It should be noted that the defendants’ position is superficially appealing and, in fact, was considered by the Court. However, the Court, based upon the record before it, was not convinced that Fahringer had had an opportunity to raise this issue at the earlier hearings inasmuch as the actions alluded to therein may have taken place after the entry of the January 4,1977 Order which effectively resolved the allegations asserted in subparagraph 12(g). For this reason, the Court did not grant summary judgment with respect to subparagraph 12(i) as the prior proceedings relied upon were without res judicata effect.

With respect to paragraphs 18 and 19 of Count Five, the defendants correctly note that the issues of Fahringer’s lost compensation and termination of employment raised therein were not addressed in the May 1981 Order. This was because the Court felt that the defendants’ argument for dismissal was not conclusively established.

The defendants assert that the allegations raised in paragraph 18 — that Fahringer’s salary was erroneously reduced — was raised previously in the Petition for Clarifying Order [Exhibit A, p. 2, ¶ 4] where Fah-ringer sought to be compensated on the same basis as was in effect prior to July 1976. Additionally, the defendants note that in his Motion for Temporary Restraining Order [Exhibit A, p. 4, ¶3] Fahringer asserted that on November 4, 1976 the Creditors’ Committee locked him out of his office, fired him and refused payment of his salary. The defendants urge that the Court’s finding that “the order of January 4, 1977 and the issues resolved therein (as raised by the referenced pleadings) ... effectively resolved” the allegations made by Fahringer in the Petition for Clarifying Order and ancillary pleadings. Memorandum Opinion, 11 B.R. at 246. Accordingly, the defendants contend that the allegations raised in paragraph 18 should be barred by res judicata.

Although the defendants’ argument pertaining to the question of lost compensation raised in paragraph 18 is tenable, the Court felt that the status of this paragraph must be resolved in connection with paragraph 19 of Count Five. The Court is of the opinion that the issue of Fahringer’s dismissal was not fully resolved by prior litigation inasmuch as the record is not entirely clear as to exactly when Fahringer’s employment was actually and finally terminated in relation to the Court’s entry of the January 4, 1977 Order. Furthermore, the record is equally unclear as to the reason for Fahringer’s termination. Because of the uncertainties, the Court (in light of the Fourth Circuit’s reluctance to affirm the dismissal of a proceeding by reason of summary judgment) determined that these issues could best be resolved at trial. It was on this basis too that the Court felt that the question of lost compensation asserted in paragraph 18 (and paragraph one of the ad damnum) not be dismissed in summary fashion.

The third issue raised by the defendants concerns the Court’s denial of their motion for summary judgment with respect to paragraph 22 of Count Six (See Memorandum Opinion, 11 B.R. at 247 discussing paragraph 21 of Count Six). The defendants’ motion for reconsideration of the Court’s decision to deny the granting of summary judgment with regard to this paragraph is three-fold. First, the defendants contend that the allegation raised therein (that certain unauthorized representations were made by them to Edward Buckhout as an inducement to his acceptance of employment — as president — with Victor Distributing) fails to state a claim upon which relief can be granted. Second, the defendants contend that Fahringer is not a proper party to raise this issue. Third, the defendants argue that Fahringer had an opportunity to litigate the issue raised in paragraph 22 and have it determined as an incident to the subject matter of the earlier proceedings. The defendants rely upon this Court’s statement that res judicata bars relitigation “ ‘of all grounds for recovery . . . that were previously available to the parties regardless of whether [139]*139they were asserted or determined in the prior proceeding.’ ” Memorandum Opinion, 11 B.R. at 245, citing Brown v. Feisen, 442 U.S. 127,131, 99 S.Ct. 2205, 2209, 60 L.Ed.2d 767 (1979).

Notwithstanding these assertions, the Court remains of the opinion that the defendants’ reliance on the January 4, 1977 Order [Exhibit B, p. 3, ¶ 1] (wherein the Creditors’ Committee was prohibited from either selling corporate stock or non-inventory capital items of value of more than $1,000.00 without Court approval) is without merit inasmuch as this Order is not applicable to the allegations raised in paragraph 22. In addition, the Court determined that it was unclear whether Fahringer actually had knowledge of the alleged promise given to Buckhout during the course of the prior proceedings. Having determined that the defendants’ allegations heretofore raised to be without merit, the Court feels that the resolution of this issue can best be had at trial.

The fourth issue addressed by the defendants relates to the Court’s denial of their motions for summary judgment with respect to subparagraph 12(f) of Count Two and Count Eight. The allegations raised therein relate to allegedly fraudulent statements made by the defendants in connection with certain accounts receivable financing in March 1978. The Court determined that a consent order endorsed by Fahringer entered by this “Court on September 4, 1979 fully determined on their merits the operative facts stating the cause of action” in the above-referenced counts of the Complaint. 11 B.R. at 248. The Court determined further that in the present case such allegations were barred from being relitigated to the extent that the doctrine of res judicata was available to the defendants. The availability of this bar was limited to Werner M. Bohne & Associates and to Werner M.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Parklane Hosiery Co. v. Shore
439 U.S. 322 (Supreme Court, 1979)
Brown v. Felsen
442 U.S. 127 (Supreme Court, 1979)
Norfolk & Western Railway Co. v. Bailey Lumber Co.
272 S.E.2d 217 (Supreme Court of Virginia, 1980)
Davis v. Towe
379 F. Supp. 536 (E.D. Virginia, 1974)

Cite This Page — Counsel Stack

Bluebook (online)
14 B.R. 136, 1981 Bankr. LEXIS 2953, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fahringer-v-bohne-in-re-victor-distributing-co-vaed-1981.