Willett v. Vitek, Inc.

139 B.R. 723, 1992 U.S. Dist. LEXIS 6335, 1992 WL 94305
CourtDistrict Court, D. Nevada
DecidedApril 9, 1992
DocketNo. CV-N-90-3-ECR
StatusPublished

This text of 139 B.R. 723 (Willett v. Vitek, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Willett v. Vitek, Inc., 139 B.R. 723, 1992 U.S. Dist. LEXIS 6335, 1992 WL 94305 (D. Nev. 1992).

Opinion

ORDER

EDWARD C. REED, Jr., Chief Judge.

On February 26, 1992, this Court entered an order (document # 60) requesting that plaintiff and defendant Du Pont (“Du Pont”) file briefs addressing whether we may proceed with plaintiff’s case against Du Pont in light of co-defendant Vitek’s (“Vitek”) pending bankruptcy and the automatic stay. We gave each side the opportunity to file opening and responsive briefs.

Du Pont filed its opening brief (document # 70) on March 17,1992. Plaintiff filed her opening brief (document # 71) on the same date. Plaintiff filed her response (document #75) on March 25, 1992. Du Pont filed its response (document # 77) on March 31, 1992. We now issue our ruling that the automatic stay entered by the Texas bankruptcy court as to debtor/eo-defen-dant Vitek does not preclude this Court from proceeding with plaintiff’s case against Du Pont.

As we noted previously in our order of February 26, 1992, Du Pont has filed a motion for summary judgment (document # 47) in this case. Du Pont also has filed a motion for severance of issue of Du Pont’s duty (document # 69). We note at the outset that both sides agree that we should decide Du Pont’s motion for summary judgment despite the automatic stay in effect as to Vitek. We also note that we do not decide the merits of Du Pont’s motion for summary judgment in this order, nor do we decide Du Pont’s motion for severance.

While plaintiff argues that the automatic stay inuring to Vitek should have no impact on our authority to proceed with plaintiff’s case against Du Pont, Du Pont argues that with the exception of the summary judgment and severance motions, we should not proceed with plaintiff’s case against Du Pont until the automatic stay in effect as to Vitek is lifted. Plaintiff also states that she will consent to dismissal of Vitek under Fed.R.Civ.P. 41(a)(2). For the reason^ set out below, we conclude that we should proceed in all aspects with plaintiff’s case against Du Pont without dismissing Vitek, despite the automatic stay in effect as to Vitek.

In our previous order, we identified several issues and cases for the parties to address. First, we raised the issue of whether Du Pont and Vitek are joint tort-feasors. If the parties are joint tort-feasors, neither party is indispensable. In Lynch v. Johns-Manville, 710 F.2d 1194 (6th Cir.1983), the court refused to extend the automatic stay to the solvent, non-debt- or co-defendant because the co-defendant and the debtor were joint tortfeasors, and therefore, not indispensable in relation to each other. Id. at 1196.

In its papers, Du Pont does not address the relationship between Du Pont and Vi-tek other than Du Pont’s claim that it would be entitled to indemnity from Vitek. Plaintiff, on the other hand, argues that Du Pont and Vitek are joint tortfeasors. The facts indicate that Du Pont provided a raw material to Vitek. Vitek combined the raw material with other substances to create the TMJ implant. Plaintiff alleges that [725]*725the implant was defective for the use to which it was put.

Plaintiff notes that in a motion to the bankruptcy court by Du Pont seeking a finding that the automatic stay did not apply to Du Pont, Du Pont argued that Du Pont and Vitek were joint tortfeasors. Du Pont does not dispute this fact. Further, as plaintiff notes, Du Pont and Vitek are joint tortfeasors, if the facts support such a conclusion, pursuant to NRS 41.141(5)(e), which provides that joint and several liability still exists between defendants when an injury to a person results from a product which is manufactured, distributed, sold or used in Nevada.

Under the facts of this case, joint and several liability exists between Du Pont and Vitek, necessitating the conclusion that Du Pont and Vitek are joint tortfeasors. In Buck by Buck v. Greyhound Lines, 105 Nev. 756, 783 P.2d 437, 442 (1989), the Nevada Supreme Court held that liability is joint and several where two or more tort-feasors cause an injury through combined or concurrent tortious conduct. In this case, plaintiff alleges that the combined tortious conduct of Du Pont and Vitek caused plaintiffs injuries.

Since Du Pont and Vitek are joint tort-feasors, each of them is liable for all of plaintiffs damages. Thus, if plaintiff were to obtain a judgment against Du Pont, plaintiff could recover the entire amount of the damage from Du Pont. Of course, contribution and indemnity exist. In fact, Du Pont argues that if plaintiff were to obtain a judgment against Du Pont, such a verdict necessarily would indicate that the product was defective and entitle Du Pont to receive full indemnity from Vitek. In such a situation, Du Pont argues, Vitek’s estate would be hurt by the continuation of proceedings to allow a judgment to be entered against Du Pont because Du Pont’s claim for indemnity would diminish the property in Vitek’s estate.

While Du Pont’s argument is meritorious in theory, the facts of this case indicate that such argument is meritless. Even though as a matter of tort law, Du Pont might be entitled to indemnity from Vitek if a jury were to determine that the product was defective, Du Pont’s conduct precludes it from asserting an indemnity claim against Vitek. First, Du Pont did not file a cross-claim against Vitek for indemnity or contribution. Of course, once Vitek declared bankruptcy and the automatic stay took effect, Du Pont could not file such a cross-claim. The facts indicate, however, that plaintiff filed her complaint on December 11, 1989 and Vitek did not declare bankruptcy until June 17, 1990. Thus, Du Pont had over six months to file a cross-claim before the automatic stay took effect.

Second, and more important, Du Pont had to file any claim or potential claim it possessed against Vitek by November 5, 1990, since Du Pont is conceivably a creditor, distinct from the tort-plaintiff creditors, of Vitek. Tort-plaintiff creditors had until October, 1991, to file their claims. Plaintiff asserts and Du Pont does not dispute that Du Pont to this date has never filed a claim with the trustee of Vitek’s estate. Thus, even if Du Pont is entitled to full indemnity from Vitek as a matter of tort law, as a matter of bankruptcy law, Du Pont may not assert such a claim until, if ever due to the discharge provisions of the bankruptcy code, after bankruptcy case is closed.

Since Vitek has filed under Chapter 7 for liquidation, at the close of the bankruptcy case Vitek and the estate no longer will exist. That is, there will be no property from which Du Pont can recover. Thus, even if we allow the proceedings to continue and plaintiff obtains a judgment against Du Pont, which under tort law would entitle Du Pont to indemnity from Vitek, Vi-tek’s estate cannot be adversely affected by such facts because practically, Du Pont will be unable to obtain indemnity from Vitek. First, Du Pont failed to file a claim. Second, Vitek and property of the estate no longer will exist after the bankruptcy case is closed.

In A.H. Robins Co. v. Piccinin, 788 F.2d 994

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139 B.R. 723, 1992 U.S. Dist. LEXIS 6335, 1992 WL 94305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/willett-v-vitek-inc-nvd-1992.