Stranz v. Ice Cream Liquidation, Inc. (In Re Ice Cream Liquidation, Inc.)

281 B.R. 154, 2002 Bankr. LEXIS 801, 39 Bankr. Ct. Dec. (CRR) 248, 2002 WL 1781170
CourtUnited States Bankruptcy Court, D. Connecticut
DecidedJuly 31, 2002
Docket19-20268
StatusPublished
Cited by32 cases

This text of 281 B.R. 154 (Stranz v. Ice Cream Liquidation, Inc. (In Re Ice Cream Liquidation, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stranz v. Ice Cream Liquidation, Inc. (In Re Ice Cream Liquidation, Inc.), 281 B.R. 154, 2002 Bankr. LEXIS 801, 39 Bankr. Ct. Dec. (CRR) 248, 2002 WL 1781170 (Conn. 2002).

Opinion

MEMORANDUM OF DECISION RE: MOTION FOR RELIEF FROM STAY, OBJECTION TO CLAIM, JURY TRIAL DEMAND AND ABSTENTION

LORRAINE MURPHY WEIL, Bankruptcy Judge.

Before the court are the following:

• Motion for Relief from Automatic Stay (Doc. I.D. No. 271, the “Lift Stay Motion”) filed by Beth Stranz, Corrinne Kemp and Elizabeth Stokes (collectively, the “Plaintiffs”) seeking modification of the automatic stay to permit them to prosecute to judgment against the above-referenced debtor certain litigation (the “Litigation”) pending in the United States District Court for the Western District of New York (the “New York District Court”);
• Debtor’s Objection to Motion for Relief from Automatic Stay filed by Beth Stranz, Corrine [sic] Kemp and Elizabeth Stokes (Doc. I.D. No. 288, the “Stay Motion Objection”);
• Debtor’s Objection to Claim filed by Beth Stranz, Corrine [sic] Kemp and Elizabeth Stokes (Doc. I.D. No. 289, the “Claim Objection”);
• Plaintiffs’ Response to Objection to Proof of Claim and Demand for Jury Trial (Doc. I.D. No. 297, the “Jury Demand and Abstention Request”) pursuant to which, among other things, the Plaintiffs assert a right to trial by jury in respect of the Claim Objection and request that this court abstain from adjudicating the Claim Objection in favor of the Litigation proceedings; and
• Debtor’s Objection to “Response to Objection to Proof of Claim and Demand for Jury Trial” filed by Beth Stranz, Corrine [sic] Kemp and Elizabeth Stokes (Doc. I.D. No. 299, the “Jury Demand and Abstention Objection”) pursuant to which the Debtor objects to the Jury Demand and Abstention Request. 1

Hearings having been held in respect of the foregoing and the matters having been argued and briefed fully by the parties (including the Committee (as defined below)), the matters are ripe for the disposition provided for below. 2

1. BACKGROUND

This Chapter 11 case was commenced by voluntary petition filed by Fieldbrook Farms, Inc. (as later renamed, the “Debt- or”) on September 21, 2001. An official committee of unsecured creditors (the “Committee”) has been appointed and is *157 serving in this ease. Pursuant to an order of this court dated December 20, 2001 and after an auction sale, the Debtor sold substantially all of its assets to a third party. In fulfillment of the terms of that sale, the Debtor changed its name to “Ice Cream Liquidation, Inc.” On July 2, 2002, this court issued an order approving the First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code submitted jointly by the Committee and the Debtor. A confirmation hearing with respect to the related First. Amended Joint Liquidating Plan of Reorganization is scheduled for August 13, 2002.

On December 3, 2001, the Plaintiffs filed in this case a proof of claim (Number 299, the “Proof of Claim”) asserting a general unsecured claim in the amount of $6,000,000 with respect to the Litigation. If allowed in full, the referenced claim will be the largest claim in this case. Annexed to the Proof of Claim is a copy of the complaint (the “Complaint”) in the Litigation. 3 The Complaint names as defendants certain persons including Dunkirk Ice Cream Co., Inc. (“Dunkirk”) and the Debt- or. Each of the Plaintiffs is a former employee of Dunkirk. On behalf of each Plaintiff and in addition to other alleged' claims, the Complaint alleges claims for “[sjexual [hjarassment” against Dunkirk under 42 U.S.C. § 2000e and/or Section 296 of the New York Executive Law. The Complaint contains thirty-five (35) counts. A very brief summary of the relevant counts of the Complaint is annexed as Schedule A hereto. With regard to all Plaintiffs, Count XXXIII alleges a claim against the Debtor (under its prior name, Fieldbrook Farms, Inc.) for “Successor Liability” in respect of all claims alleged by the Plaintiffs against defendant Dunkirk (the “Successor Liability Claim”). 4

Discovery in the Litigation is complete. There are cross-motions for summary judgment (the “Cross-Motions”) pending in the Litigation; one of them is the Debt- or’s motion for summary judgment on the Successor Liability Claim. The Cross-Motions have been briefed fully and await only oral argument and a decision on whether supplemental responses to the Plaintiffs’ second request for admissions and a certain affidavit should be stricken (the “Motion To Strike”) from the record with respect to the Successor Liability Claim to make them ripe for decision. 5 A jury trial is scheduled in the Litigation.

Pursuant to the Lift Stay Motion, the Plaintiffs seek relief from stay to prosecute the Litigation to judgment against the Debtor and, pursuant to the Jury Demand and Abstention Request, seek to have this *158 court abstain from adjudicating the Claim Objection in favor of the Litigation proceedings. The Debtor objects to the foregoing in toto. However, as an alternative position, the Debtor urges that this court should at least exercise jurisdiction over the Successor Liability Claim. That, the Debtor urges, would allow the Debtor to establish (if it can) that it cannot be held hable as a successor for any liability Dunkirk may have to the Plaintiffs in respect of the Complaint, and thus permit the estate to avoid a needless (and expensive) defense in a potentially lengthy trial with regard to Dunkirk’s liability to the Plaintiffs. 6

For the reasons set forth below, the court determines that it should grant relief from stay in respect of, and abstain from, all relevant proceedings in respect of the Successor Liability Claim.

II. DISCUSSION

A. Jurisdiction in Respect of Relief from Stay/Abstention

During the course of briefing these matters, the Plaintiffs raised the issue of whether the Successor Liability Claim constitutes a “personal injury tort claim” within the purview of 28 U.S.C. § 157. 7 That *159 issue has been briefed and argued by the parties at some length and its resolution could be an essential first step here. That is because (as discussed more fully below), to the extent that the Successor Liability Claim is a “personal injury tort claim”, this court is without jurisdiction to set venue for any “trial” on such claim. See 28 U.S.C. § 157(b)(5). Cf. Maritime Asbestosis Legal Clinic v. United States Lines, Inc. (In re United States Lines, Inc.),

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Cite This Page — Counsel Stack

Bluebook (online)
281 B.R. 154, 2002 Bankr. LEXIS 801, 39 Bankr. Ct. Dec. (CRR) 248, 2002 WL 1781170, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stranz-v-ice-cream-liquidation-inc-in-re-ice-cream-liquidation-inc-ctb-2002.