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Wilson Refng LP v. Notre Dame Invstr, 07-51164 (2009)

Court: Court of Appeals for the Fifth Circuit Number: 07-51164 Visitors: 38
Filed: Jan. 05, 2009
Latest Update: Feb. 22, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED January 5, 2009 Charles R. Fulbruge III No. 07-51164 Clerk c/w Nos. 07-51165, 07-51171, 07-51172, 07-51177, 07-51178, 08-50132 In The Matter Of: NOTRE DAME INVESTORS, INC Debtor - WILSON REFINING LP Appellant v. NOTRE DAME INVESTORS, INC Appellee In The Matter Of: NOTRE DAME INVESTORS, INC Debtor - WILSON REFINING LP Appellant v. EUROPEAN ALLIED COMMERCE, LTD Appellee No. 07-51164 App
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          IN THE UNITED STATES COURT OF APPEALS
                                         United States Court of Appeals
                   FOR THE FIFTH CIRCUIT          Fifth Circuit

                                                             FILED
                                                           January 5, 2009

                                                        Charles R. Fulbruge III
                                No. 07-51164                    Clerk
     c/w Nos. 07-51165, 07-51171, 07-51172, 07-51177, 07-51178, 08-50132


In The Matter Of: NOTRE DAME INVESTORS, INC

                                         Debtor
-------------------------------

WILSON REFINING LP

                                         Appellant
v.

NOTRE DAME INVESTORS, INC

                                         Appellee


In The Matter Of: NOTRE DAME INVESTORS, INC

                                         Debtor
-------------------------------

WILSON REFINING LP

                                         Appellant
v.

EUROPEAN ALLIED COMMERCE, LTD

                                         Appellee
                                       No. 07-51164


                  Appeals from the United States District Court
                        for the Western District of Texas
                                No. 5:06-CV-762



Before KING, BARKSDALE, and ELROD, Circuit Judges.
PER CURIAM:*
       In case number 07-51164, Wilson Refining, L.P. (“Wilson”) appeals the
district court’s Order Granting Appellee Notre Dame Investors, Inc.’s Motion to
Dismiss Appeal from Order Denying Relief from Automatic Stay Pending
Arbitration and Denying Wilson Refining, L.P.’s Motion to Disqualify. In the
motion for relief from automatic stay, which was denied by the bankruptcy court,
Wilson sought relief from the stay so that it could liquidate its claim against
Notre Dame Investors, Inc. (“NDI”) in arbitration. In case number 08-50132,
Wilson appeals the bankruptcy court’s order denying its application for post-
petition attorneys’ fees, which was affirmed by the district court. For the
reasons stated below, we affirm the orders in both cases.
       On August 10, 2006, the bankruptcy court confirmed the plan of
reorganization in NDI’s Chapter 11 case. Wilson did not appeal the bankruptcy
court’s confirmation order. Article 2.04 of the confirmed plan, which defines
Class Four to include general unsecured claims, states: “This class of creditors
specifically includes the Allowed Claims of Wilson Refining, as finally approved
by the court.” Pursuant to Article 12.01 of the plan, the bankruptcy court
retained jurisdiction to “classify, allow or disallow Claims under the Plan and to
hear and determine any controversies pertaining thereto” and “to liquidate or




       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.

                                              2
                                        No. 07-51164

estimate damages in connection with any contingent or unliquidated claim.”1
Article 13.02 of the plan states, in relevant part, that “the consideration
distributed under the Plan shall be in complete satisfaction, release and
discharge of the Debtor and its assets from all claims of any creditor or interest
holder, including claims arising prior to the Effective Date.” On October 16,
2006, the bankruptcy court held a hearing on NDI’s objection to Wilson’s claim
and valued Wilson’s claim in the amount of $2 million, plus interest and fees.2
NDI has paid, and Wilson has accepted, the full value of this allowed claim.
       The district court dismissed Wilson’s appeal as equitably moot, finding
that the plan had been substantially consummated and that granting Wilson’s
requested relief would affect third-party rights under the plan. We agree that
this appeal should be dismissed, but we reach this conclusion based on res
judicata principles, not equitable mootness.3
       Res judicata requires the following four elements: (1) the parties must be
identical in the two actions; (2) the prior judgment must have been rendered by
a court of competent jurisdiction; (3) there must be a final judgment on the
merits; and (4) the same cause of action must be involved in both cases.
Eubanks v. Fed. Deposit Ins. Corp., 
977 F.2d 166
, 169 (5th Cir. 1992). A
bankruptcy court’s confirmation order is a final judgment for purposes of res
judicata. Republic Supply Co. v. Shoaf, 
815 F.2d 1046
, 1054 (5th Cir. 1987). The



       1
         Similar language appears in the confirmation order, which states that the bankruptcy
court retains jurisdiction “to classify, allow or disallow Claims and direct distribution of funds
under the Amended Plan, and to hear and determine any controversies pertaining thereto.”
       2
        Subsequently, Wilson applied for attorneys’ fees as part of this allowed claim. The
bankruptcy court approved the pre-petition attorneys’ fees but disallowed the post-petition
attorneys’ fees. This decision was separately appealed in case number 08-50132.
       3
        Although the district court did not rule on the issue of res judicata, it was raised by
NDI in the context of its equitable mootness argument in both its motion to dismiss and its
accompanying brief. Wilson addressed the issue in its response to the motion to dismiss.

                                                3
                                  No. 07-51164

confirmed plan itself is final and binding against all creditors pursuant to
11 U.S.C. § 1141(a) and (d). See also 
Eubanks, 977 F.2d at 170
–71.
      Here, all of the elements of res judicata are satisfied: (1) Wilson and NDI
were both parties before the bankruptcy court at the confirmation hearing and
the hearing on the objection to the claim; (2) Wilson does not argue that the
bankruptcy court was incompetent to value its claim, only that it was an abuse
of discretion for the court to refuse to send the issue to arbitration; (3) the plan
and confirmation order are final judgments discharging Wilson’s claim after it
accepted the distribution payment; and (4) all the issues raised by Wilson on
appeal relate to the discharged claim against NDI and could have been raised
at the confirmation hearing or at the hearing on the objection to the claim.
      Wilson wants to accept the $2 million distribution payment under the plan
while continuing to pursue further recovery on the same claim. The plan, which
is given the effect of a final judgment, provides that “the consideration
distributed under the Plan shall be in complete satisfaction, release and
discharge of the Debtor and its assets from all claims of any creditor or interest
holder, including claims arising prior to the Effective Date.” Thus, after Wilson
accepted its $2 million distribution pursuant to the plan, its claim against NDI
was discharged and it cannot continue to pursue further recovery on that claim
in arbitration.
      In case number 08-50132, Wilson appeals the bankruptcy court’s denial of
its application for post-petition attorneys’ fees. Section 14.02 of the plan states
that “[n]o attorneys’ fees will be paid with respect to any Claim . . . except as
specified herein or as allowed by a prior order of the Court.” For the reasons
articulated above, we find that the plan, combined with Wilson’s acceptance of
the distribution payment including the portion representing pre-petition




                                         4
                                        No. 07-51164

attorneys’ fees, is res judicata as to the issue of whether NDI may recover post-
petition attorneys’ fees.4
       For the foregoing reasons, we AFFIRM the district court’s dismissal of
Wilson’s appeal from the bankruptcy court’s order denying relief from the stay
(case number 07-51164) and we AFFIRM the bankruptcy court’s order denying
Wilson’s application for post-petition attorneys’ fees (case number 08-50132).




       4
         Wilson also appealed the district court’s denial of its Motion to Disqualify counsel for
NDI on the basis that such counsel was also acting as appellate counsel for a creditor. Because
it dismissed the appeal relating to that creditor, the district court, in the same order, denied
Wilson’s motion to disqualify counsel as moot. We see no error.

                                               5

Source:  CourtListener

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