Walsh v. United Electrical, Radio & Machine Workers of America, Local 650 (In re Custom Concepts, Inc.)

150 B.R. 629, 1993 Bankr. LEXIS 124
CourtDistrict Court, W.D. Pennsylvania
DecidedFebruary 3, 1993
DocketMotion No. 92-3281M; Bankruptcy No. 91-4235-BM
StatusPublished

This text of 150 B.R. 629 (Walsh v. United Electrical, Radio & Machine Workers of America, Local 650 (In re Custom Concepts, Inc.)) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walsh v. United Electrical, Radio & Machine Workers of America, Local 650 (In re Custom Concepts, Inc.), 150 B.R. 629, 1993 Bankr. LEXIS 124 (W.D. Pa. 1993).

Opinion

MEMORANDUM OPINION

BERNARD MARKOVITZ, Bankruptcy Judge.

Before the court is the chapter 7 trustee’s objection to that portion of a proof of claim for vacation pay for calendar year 1992 filed by United Electrical, Radio and Machine Workers of America, Local 650 (“UE”), on behalf of its members. These individuals had been employed by debtor pursuant to a collective bargaining agreement.

According to the trustee, the employees are not entitled to vacation pay for 1992 because they did not work for debtor at any time during 1992, as was required by the collective bargaining agreement. Also, the trustee asserts that it had been accepted past practice under the collective bargaining agreement that terminated employees did not receive vacation pay unless they worked for debtor during the year for which it was sought.

UE maintains that its members are entitled to vacation pay for 1992 even though they last worked for debtor in 1991. According to UE, the collective bargaining agreement provided that vacation pay for use in 1992 was earned during 1991. It asserts that the collective bargaining agreement did not require that they also have worked for debtor at any time during 1992.

The trustee’s objection will be sustained.

I

FACTS

UE became the exclusive bargaining agent for approximately forty (40) employees of debtor in 1986.

Debtor and UE executed a collective bargaining agreement which was effective from October 15, 1989 through October 14, 1992. Article XX of the agreement, which pertained to eligibility for vacation pay, provided in pertinent part as follows:

ARTICLE XX — VACATIONS
1. Employees shall become eligible for vacations with pay in accordance with the following schedule of years of continuous service.
YEARS OF CONTINUOUS SERVICE VACATION
After 1 year’s service 5 days
After 2 years — up to 7 years 10 days
After 7 years — up to 20 years 15 days
After 20 years 20 days
2. Employees shall become eligible for their first five (5) days (week) of vacation with pay on the anniversary date of their employment; provided, however, they must have worked in at least fifty percent (50%) of the pay periods in their respective first (1st) anniversary year to be eligible for vacation with pay. Thereafter employees shall become eligible for vacation on January 1, except they become eligible for the respective additional days of vacation on their anniversary dates in the relevant years of continuous service for which additional days accrue; provided, however, regardless of years of continuous service, they must have worked in at least fifty percent (50%) of the pay periods in the preceding calendar year to be eligible for [631]*631vacation with pay in any succeeding calendar year.1

On November 13, 1991, an involuntary petition was filed against debtor. An order subsequently was entered which declared that the case was to be treated as though it had been filed on August 15,1991, when an involuntary petition had been filed against an entity related to debtor.

The above collective bargaining agreement was in effect at the time the case was commenced.

Debtor had ceased operations by August 15, 1991. No employee covered by the collective bargaining agreement worked for debtor at any time during 1992.

The case was converted to a chapter 7 proceeding on April 1, 1992. An order was entered on April 7, 1992 approving the appointment of James R. Walsh as chapter 7 trustee.

The bankruptcy proceeding pertaining to Custom Concepts has been consolidated with proceedings pertaining to Armstrong Store Fixtures Corporation (“Armstrong”) and Bentley Industries, Inc. (“Bentley”). The employees of Bentley were represented by a local bargaining unit of the International Brotherhood of Electrical Workers (“IBEW”). The court has been advised that the provision contained in this collective bargaining agreement is similar to provisions in the contract negotiated by UE on behalf of the employees of Custom Concepts and Armstrong.

The National Labor Relations Board (“NLRB”), UE, IBEW, and the individual employees of Armstrong, Bentley and Custom Concepts filed essentially duplicate proofs of claim for: severance pay; vacation pay for 1991 and 1992; unpaid health care coverage; and personal days for 1991 and 1992. In essence, we have a triple filing of the same claim as the individual, their union representative, and the NLRB have filed a proof of claim relating to the same claim.

On November 6, 1992, the trustee, inter alia, objected to the proof of claim filed by UE which is before the court at this time.

The trustee and NLRB eventually entered into a proposed settlement of all of the above claims. Neither the IBEW nor the individual members objected to the proposed settlement. UE, however, did object. As a consequence an order was entered on December 24, 1992 approving the proposed settlement to the extent that it pertained to claims filed by IBEW in the Bentley case. The proposed settlement was rejected to the extent that it pertained to the claims filed by UE on behalf of the employees of Custom Concepts and Armstrong. The trustee was directed at that time to file any pleadings required for determination of the remainder of the proofs of claim filed by UE and the individual employees of Custom Concepts and Armstrong.

An evidentiary hearing was held on December 30, 1992 on the trustee’s objection of November 6, 1992 to that portion of UE’s proof of claim which pertains to vacation pay for 1992.2

2.

ANALYSIS

The law pertaining to a proof of claim to which there is an objection is relatively simple.

The burden of proof for claims brought pursuant to 11 U.S.C. section 502(a) rests on different parties at different times. See In re Allegheny International, Inc., 954 F.2d 167, 173 (3d Cir.1992).

The initial burden is upon the claimant, who must allege in the proof of claim [632]*632facts that are sufficient to support the claim. If the proof of claim alleges facts sufficient to support legal liability to the claimant, it is prima facie valid and satisfies the claimant’s initial burden of going forward. Id.

The objector then must produce evidence which is at least equal in force to the prima facie case and which, if believed, would refute at least one of the allegations that are necessary to the claim’s legal sufficiency. In re Allegheny International, Inc., 954 F.2d at 173-74.

If the objector meets this burden, the burden then reverts to the claimant to establish the claim’s validity by a preponderance of the evidence. In re Allegheny International, Inc., 954 F.2d at 174. The burden of persuasion rests at all time with the claimant. Id.

A claim is a right to payment. See 11 U.S.C.

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150 B.R. 629, 1993 Bankr. LEXIS 124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walsh-v-united-electrical-radio-machine-workers-of-america-local-650-pawd-1993.