Kettell v. Bill Heard Enterprises, Inc. (In re Bill Heard Enterprises, Inc.)

400 B.R. 795, 2009 Bankr. LEXIS 163
CourtUnited States Bankruptcy Court, N.D. Alabama
DecidedJanuary 12, 2009
DocketBankruptcy No. 08-83029-JAC-11; Adversary Nos. 08-80153-JAC-11, AP 08-80154-JAC-11, 08-80172-JAC-11
StatusPublished
Cited by3 cases

This text of 400 B.R. 795 (Kettell v. Bill Heard Enterprises, Inc. (In re Bill Heard Enterprises, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kettell v. Bill Heard Enterprises, Inc. (In re Bill Heard Enterprises, Inc.), 400 B.R. 795, 2009 Bankr. LEXIS 163 (Ala. 2009).

Opinion

[800]*800CONSOLIDATED INTERIM ORDER

JACK CADDELL, Bankruptcy Judge.

This matter is before the Court on the motions filed by Bill Heard to dismiss each of the above styled adversary proceedings and on motions for class certification, appointment of class representative and class counsel filed by plaintiff Edward Kratzel (“Kratzel”), and plaintiff Adam Kettell (“Kettell”). The plaintiffs in each of the adversaries seeks relief under the Federal Worker Adjustment and Retraining Notification Act (“WARN Act”), 28 U.S.C. § 2101 et. seq. Bill Heard argues that the adversary proceedings should be dismissed and handled through the claims process or alternatively requests that the Court defer ruling on whether to allow any class action to proceed for a minimum of 90 days to allow the parties to determine whether there will be any assets available to pay WARN Act claims. For the reasons set forth herein, the Court finds that Bill Heard’s motions to dismiss are due to be denied. As more fully discussed below, the Court grants the motion filed by plaintiff Kettell for class certification and appoints the law firms of Morris, Conchin & King, The Gardner Firm, P.C., and Landenau & Miller, LLP, as class counsel pursuant to Fed.R.Civ.P. 23(g).

BACKGROUND

On September 28, 2008, Bill Heard Enterprises, Inc. and other related entities (collectively “Bill Heard”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Prior to filing bankruptcy, Bill Heard owned and operated fourteen Chevrolet dealerships in seven states. On September 24, 2008, Bill Heard ceased operations at the dealerships and informed substantially all of its employees located at its various locations that they were terminated effective immediately.

RELIEF SOUGHT

Each of the above styled adversary proceedings seeks relief under the WARN Act and alleges that Bill Heard violated the Act by failing to provide employees with 60 days advanced written notice of their termination prior to ceasing operations. Plaintiffs seek to recover 60 days wages and benefits, pursuant to 29 U.S.C. § 2104. Plaintiffs Kratzel and Lodge argue that their WARN Act claims, as well as the claims of all similarly situated employees, are entitled to administrative expense status pursuant to 11 U.S.C. § 503(b)(l)(A)(ii), or, in the alternative, priority status pursuant to 11 U.S.C. § 507(a)(4),(5). Kettle argues that the first $10,950 of each putative class member’s WARN Act claim would be entitled to § 507(a)(4) priority, and the remaining balance, if any, would be a general unsecured claim.

Bill Heard argues that the WARN Act adversary proceedings should be dismissed and handled through the claims process. Bill Heard asserts that plaintiffs’ claims can just as easily be submitted and determined by filing proofs of claims, and the adversary proceedings are therefore unnecessary and duplicative of the claims process. Alternatively, Bill Heard seeks a ruling now that any WARN Act claims, if allowed, shall be afforded fourth priority wage claim status under § 507(a)(4) of the Code, but requests that the Court defer any ruling on whether to allow any class action to proceed for a minimum of 90 days.

FINDINGS

In ruling on a motion to dismiss, the Court must construe the complaint in the light most favorable to the plaintiff, and all well-pleaded facts alleged by the [801]*801plaintiff must be accepted as true.2 In each of the pending adversary proceedings, the plaintiffs alleged that they were terminated by Bill Heard on September 24, 2008 without advanced written notice along with approximately 2800 other Bill Heard employees. In support of its motion to dismiss, Bill Heard attached the case of Hart v. First Magnus Fin. Corp. (In re First Magnus Fin. Corp.), Adv. Proc. No. 4-07-bk-01578-JMM (Bankr.D.Ariz. January 10, 2008) wherein the bankruptcy court denied class certification in a WARN Act adversary proceeding. In First Magnus, the court determined that class certification was unnecessary and found that it would be a waste of judicial resources to move forward with the adversary complaint when the claims process was moving the same issues down a parallel track. That case involved a class, however, of eight plaintiffs, each of whom had already filed a proof of claim. In this case, the proposed class is composed of approximately 2300 employees. In a case involving potentially 2300 claimants, the Court believes and finds that a class action adversary proceeding to resolve the claims is appropriate and preferable to the claims procedure. Even if the Court dismissed the adversary proceedings, Kettell filed a class proof of claim in this case on November 26, 2008 which the Court would have to address as recognized by the Eleventh Circuit in In re Charter Co., 876 F.2d 866 (1st Cir.1989). Given the size of the class involved in this case and the fact that Bill Heard has expressed opposition to any and all WARN Act claims and will most certainly vigorously defend against same whether in the claims process or through these adversary proceedings, the Court recognizes and finds that resolving the WARN Act claims collectively through a class action adversary proceeding will be more efficient than handling same in a piece meal fashion through the claims process.3 The Court further believes that same is necessary to protect the employees rights given the relatively small nature of their individual claims and the concern as expressed by the Eleventh Circuit in In re Charter Co., 876 F.2d 866, 877 (11th Cir.1989) that persons holding small claims may not prosecute same absent the class procedures. The Court further notes that the putative class members in this case are spread out in seven states and takes particular notice of the geographical hardship it would create on same to defend their claims.

In considering motions for class certification the Eleventh Circuit has stated:

Rule 23 establishes the legal roadmap courts must follow when determining whether class certification is appropriate. Pursuant to Rule 23(a), a class may be certified only if (1) the class is so numerous that joinder of all members would be impracticable; (2) there are questions of fact and law common to the class; (3) the claims or defenses of the representatives are typical of the claims and defenses of the unnamed members; [802]*802and (4) the named representatives will be able to represent the interests of the class adequately and fairly. Fed. R.Civ.P. 23(a).
These four prerequisites of Rule 23(a) are commonly referred to as “numerosity, commonality, typicality, and adequacy of representation, and they are designed to limit class claims to those fairly encompassed by the named plaintiffs’ individual claims.” Failure to establish any one of these four factors and at least one of the alternative requirements of Rule 23(b) precludes class certification.4

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In Re Bill Heard Enterprises, Inc.
400 B.R. 795 (N.D. Alabama, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
400 B.R. 795, 2009 Bankr. LEXIS 163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kettell-v-bill-heard-enterprises-inc-in-re-bill-heard-enterprises-alnb-2009.