Herrera v. Weaver Construction Co. (In Re Herrera)

34 B.R. 810, 1983 Bankr. LEXIS 6884, 10 Bankr. Ct. Dec. (CRR) 123
CourtUnited States Bankruptcy Court, D. Colorado
DecidedFebruary 3, 1983
Docket19-10818
StatusPublished
Cited by3 cases

This text of 34 B.R. 810 (Herrera v. Weaver Construction Co. (In Re Herrera)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Herrera v. Weaver Construction Co. (In Re Herrera), 34 B.R. 810, 1983 Bankr. LEXIS 6884, 10 Bankr. Ct. Dec. (CRR) 123 (Colo. 1983).

Opinion

MEMORANDUM OPINION

JAY L. GUECK, Bankruptcy Judge.

Two separate motions have been presented to this Court for determination. The first is a motion for entry of judgment on an arbitration award obtained pursuant to the provisions of a contract between Herrera and Weaver, and pursuant to the provisions of 1973 C.R.S. 13-22-101, et seq. as amended. The second is a motion for in-junctive relief, wherein I have been asked to enjoin the debtor from proceeding further in the State court in aid of execution of a judgment entered in that court on the same arbitration award and to further enjoin the debtor from continuing garnishment and other collection proceedings, pursuant to C.R.C.P. 109(e). Alternatively, the defendant Weaver has asked that I remand the arbitration award to the arbitration panel for clarification of its award as respects punitive damages and any possible issues regarding defendant, R.T.D. Both parties have suggested that we endeavor to proceed on remaining matters in a court of competent jurisdiction. The issues which are the subject of this adversary proceeding and which were addressed in the arbitration arise under state law.

Defendant Weaver argues that this court has jurisdiction in spite of Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) and Congressional inaction in response thereto, by virtue of General Procedure Order No. 1983-1 issued by the United States District Court for the District of Colorado. The debtor-plaintiff (Herrera) urges that “it appears that this court may not have jurisdiction over the adversary proceeding between Debtor-Plaintiff, Ralph A. Herrera, Weaver and the other defendants which is the subject of defendant Weaver’s motion.”

I agree with Herrera, but, for reasons later set forth herein, feel that this matter requires the district court to review this proposed order for such consideration as it deems appropriate.

A recitation of the factual background and its relationship to the jurisdictional quagmire in which the Bankruptcy Courts have been placed will be helpful to an understanding of this suggested order.

The debtor-plaintiff (Herrera) filed a Petition in this Court under Chapter 13 on December 16,1981. This was later converted to a Chapter 11 matter on August 25, 1982. Prior to filing for the adjustment under Chapter 13, Herrera filed, on or about June 25, 1981, a civil action in the State court of Colorado. That action was filed against Weaver Construction Company, Fireman’s Fund Insurance Company as its bonding surety, and against the Regional Transportation District (R.T.D.). It was alleged that R.T.D. was a party to a construction contract with defendant Weaver, as the General Contractor, to construct a shopping mall. Herrera was employed as an excavating sub-contractor. Herrera asserted claims of fraud in the inception of the contract, breach of contract, quantum me-ruit and outrageous conduct. The contract also contained an arbitration clause. The State litigation was then removed to this court by virtue of Herrera’s Petition for Removal filed herein on December 16,1981. Subsequently, on March 3, 1982, this court directed that the litigation be remanded to *812 arbitration. The arbitration was concluded and an award made on December 16, 1982. A copy of that AWARD OF ARBITRATORS was filed in this court on January 10, 1983. In that arbitration proceeding, Herrera was awarded $132,000.00 together with certain administrative fees and expenses. Weaver then filed a MOTION FOR ENTRY OF JUDGMENT ON ARBITRATION-AWARD in this court on January 12, 1983. Pursuant to the Uniform Arbitration Act of 1975, C.R.S.1973, 13-22-201, et seq., Herrera has ninety days from receipt of the award to enter any objection, at which time the court would be in a position to vacate, confirm, modify or correct the award.

In the meantime, on December 17, 1982, one day after the arbitration award was entered but before it was filed in this court, Herrera commenced a civil action in the State district court and obtained an ex parte judgment confirming the arbitration award in that court. According to Herrera, that action was taken pursuant to C.R.C.P. 109(e), Rule 47 of the Construction Industry Arbitration Rules of the American Arbitration Association and pursuant to Herrera’s interpretation of the decision of the Colorado Supreme Court in Columbine Valley Construction Co. v. Roaring Forks School District, 626 P.2d 686 (Colo.1981). Additionally, Herrera allegedly made demand upon Weaver, upon its bonding company, Fireman’s Fund Insurance Company, and upon defendant Regional Transportation District for payment of the arbitration award. Pursuant to that demand Herrera processed garnishments against the Colorado National Bank, University National Bank and the owners of various projects on which Weaver was working. The stated reason given by Herrera for going back to the State court was that he wanted to avail himself of the provisions of C.R.C.P. 109(e) and he was concerned that since Congress had failed to act in response to Northern Pipeline v. Marathon Pipe Line, supra, this court had no further jurisdiction in the matter.

It is undisputed between the parties that Weaver did make a tender of full payment to Herrera, but this tendered payment was predicated on a full release to Weaver, Fireman’s Fund and R.T.D. Herrera disputes that Weaver is entitled to a release as to R.T.D., whom Weaver has apparently indemnified.

Weaver then filed its motion in this court on January 18,1983, seeking to enjoin Herrera from continuing to pursue his state court remedies.

This Court’s jurisdiction to enter any orders relating to these various State law claims is now before the Court.

The Supreme Court of the United States, on June 28, 1982, declared that the broad grant of jurisdiction to Bankruptcy Courts as contained in Section 241(a) of the Bankruptcy Act of 1978, 28 U.S.C. § 1471 (1976 ed. Supp. III), violates Article III of the Constitution. Northern Pipeline Construction Co. v. Marathon Pipe Line Company, 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). After entering two stays to afford Congress an opportunity to enact legislation to prevent a jurisdictional lapse, the Congress has failed to respond. The last stay expired on December 24, 1982.

Since the entry of the Supreme Court’s decision in Northern Pipeline, supra, judicial lobbying of Congress and the Executive has become so pervasive and perverse as to make objective analysis of the present status of bankruptcy courts extremely difficult. In the meantime, those persons who labor under the misfortune of having to appear in the bankruptcy courts throughout the nation are rapidly becoming the losers, as more controversy and uncertainty surrounds the Code and the courts charged with the responsibility of administering it.

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Bluebook (online)
34 B.R. 810, 1983 Bankr. LEXIS 6884, 10 Bankr. Ct. Dec. (CRR) 123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herrera-v-weaver-construction-co-in-re-herrera-cob-1983.