IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-11107

Summary Calendar

In the Matter of: PLACID OIL COMPANY,

Debtor

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SHELTON PROPERTY RURAL ACREAGE, L.L.C.,

Appellant,

v.

PLACID OIL CO.,

Appellee

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:10-CV-862

Before JOLLY, GARZA, and STEWART, Circuit Judges.

PER CURIAM:*

Plaintiff-Appellant Shelton Property Rural Acreage, L.L.C. (“Shelton”)

brought suit againstDefendant-AppelleePlacid Oil Company (“Placid”), alleging

United States Court of Appeals

Fifth Circuit

F I L E D

August 10, 2011

Lyle W. Cayce

Clerk

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.

Case: 10-11107 Document: 00511567840 Page: 1 Date Filed: 08/10/2011
property damage caused by oil and gas exploration prior to Placid’s 1986

bankruptcy. The bankruptcy court granted Placid’s motion for summary

judgment, and the district court affirmed. For the following reasons, we

AFFIRM.

I. 

Placid is an oil and gas company, and from 1942 until 1956, Placid

operated oil wells on property in Louisiana leased from Shelton’s predecessor in

title. On August 29, 1986, Placid filed for Chapter 11 bankruptcy. Pursuant to

Federal Rule of Bankruptcy Procedure 3002(c)(3), the bankruptcy court set

January 31, 1987 as the Bar Date for filing proofs of claim to Placid’s bankruptcy

estate. Known creditors were given notice by mail of the Bar Date. Unknown

creditors were given notice by publication in the Wall Street Journal on January

2, January 9, and January 16 of 1987. On September 30, 1988, Placid obtained

a discharge from the bankruptcy court of all claims existing on that date, except

those created or assumed by the reorganization plan. The bankruptcy court’s

order also included any future claims for damages that occurred prior to the

discharge. 

In 2002, Shelton purchased the property Placid previously leased. Six

years later, Shelton brought suit in state court, alleging that Placid caused

environmental damage to the property during its 1942 to 1956 leasehold. Placid

reopened its Chapter 11 case and filed an adversary proceeding in bankruptcy

court to determine the dischargeability of Shelton’s claim. Placid then filed a

motion for summary judgment. Placid argued thatShelton’s predecessor in title,

the owners of the property at the time of the bankruptcy proceedings, did not file

a proof of claim for any alleged environmental damage to the property during

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Placid’s leasehold. Thus, Placid argued, Shelton’s claim had been discharged by

the bankruptcy court’s 1988 order. In response to Placid’s motion for summary

judgment, Shelton argued that its predecessor did not receive adequate notice

of Placid’s bankruptcy proceeding. Specifically, Shelton argued that its

predecessor was a “known creditor,” and as such, was entitled to “actual notice,”

i.e. notice by mail or in person. 

On April 10, 2010, the bankruptcy court granted Placid’s motion. The

district court affirmed. Shelton appeals. 1

II.

A. 

A grant of summary judgment is reviewed de novo. In re SeaQuest Diving,

LP, 579 F.3d 411, 417 (5th Cir. 2009) (citing In re Erlewine, 349 F.3d 205, 209

(5th Cir. 2003)). Summary judgment is proper when there is no genuine issue

as to any material fact and the movant is entitled to judgment as a matter of

law. FED. R. CIV. P. 56(c); FED. R. BANKR. P. 7056 (applying FED. R. CIV .P. 56 to

adversary bankruptcy proceedings). As for the district court’s determination of

whether a party is a known or unknown creditor, this court has determined it

“is entirely an issue of fact, and our standard of review is therefore one of clear

error.” In re Crystal Oil Co., 158 F.3d 291, 298 (5th Cir. 1998). 

B. 

To satisfyFourteenth Amendment due process, notice must be “reasonably

calculated, under all the circumstances, to inform interested parties of the

For the balance of this opinion, references to the district court’s opinion refer also

1

the bankruptcy court’s determination.

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pendency” of the proceeding. Mullane v. Cent. Hanover Bank & Trust Co., 339

U.S. 306, 314 (1950). A claim against a declarant of Chapter 11 bankruptcy is

considered a property interest requiring notice to the potential claimant. In re

Kendavis Holding Co., 249 F.3d 383, 385–86 (5th Cir. 2001) “The type of notice

that is reasonable or adequate for purposes of satisfying the due process

requirement in this context depends on whether a particular creditor is known

or unknown to the debtor.” In re J.A. Jones, Inc., 492 F.3d 242, 249 (4th Cir.

2007). 

The Supreme Court has explained that known creditors include “both

those claimants actually known to the debtor, as well as those whose identities

are ‘reasonably ascertainable.’” Crystal Oil Co., 158 F.3d at 297 (quoting Tulsa

Prof’l Collection Servs., Inc. v. Pope, 485 U.S. 478, 490 (1988)). “A creditor is

‘reasonably ascertainable’ if it can be discovered through ‘reasonably diligent

efforts.’” Id. (quoting Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 n.

4 (1983)). “In order for a claim to be reasonably ascertainable, the debtor must

have in his possession, at the very least, some specific information that

reasonably suggests both the claim for which the debtor may be liable and the

entity to whom he would be liable.” Id.

“Under the Supreme Court’s longstanding jurisprudence, the debtor must

provide actual notice–not notice by publication–to all ‘known creditors’ in order

to achieve a legally effective discharge of their claims.” Id. (quoting City of New

York v. New York, N.H. & H.R. Co., 344 U.S. 293, 296 (1953)). For example, the

Court has “recognized that mail service is an inexpensive and efficient

mechanism that is reasonably calculated to provide actual notice.” Tulsa, 485

U.S. at 490.

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While actual notice of the Bar Date must be provided to known creditors,

constructive notice is constitutionally sufficient for unknown creditors. J.A.

Jones, 492 F.3d at 249–50. It is well established that notice by publication will

generally suffice for constructive notice. See Chemetron Corp v. Jones, 72 F.3d

341, 346 (3d Cir. 1995). Furthermore, “[p]ublication in national newspapers is

regularly deemed sufficient notice to unknown creditors.” Id. at 349–50; see also

Mullane, 339 U.S. at 316–17 (1950) (Notice by publication is sufficient for

unknown creditors.). 

Shelton argues that their predecessor was a known creditor entitled to

actual notice because Placid continued to lease the property until 1964. This is

significant for two reasons. First, Shelton claims that a water study published

in 1958 showed that the water wells on the property were contaminated due to

oil and gas activities. Second, a June 1, 1964 edition of Oil and Gas Journal

contained an article entitled “Louisiana Battling Brine Pollution” that claims

that the Little River, which borders the Shelton property, was being polluted due

to unlined oil and gas pits. Therefore, when Placid filed for bankruptcy, Shelton

claims, it should have been aware of Shelton’s potential property damage claims. 

Shelton argues that this would make Shelton’s predecessor in title a known

creditor and thus entitled to actual notice. We disagree. 

This court has held that when reviewing a decision for clear error, the

judgment “will be reversed only if, on the entire evidence, we are left with the

definite and firm conviction that a mistake has been made.” In re Allison, 960

F.2d 481, 483 (5th Cir. 1992). The district court’s determination was not clearly

erroneous because the summary judgment evidence sufficiently establishes that

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Shelton’s predecessor was an unknown creditor at the time Placid filed for

bankruptcy. 

Specifically, the record indicates that, at the time Placid filed for

bankruptcy, there was no specific information that reasonably suggests that

Placid knew of any claims related to property it leased from Shelton’s

predecessor. Crystal Oil Co., 158 F.3d at 297. The district court correctly relied

on the following evidence to support its grant of summary judgment: (1) from

1956 to 1986 (when Placid filed bankruptcy), no environmental complaint was

made by Shelton’s predecessor in title; (2) affidavits provided by Shelton did not

show actual knowledge, asserting that Placid knew of Shelton’s potential claim;

(3) as Placid had tens of thousands of former leaseholds, it would have taken a

“tremendous effort” for Placid to give each actual notice of the bankruptcy, and

had no reason to do so; and (4) Shelton’s assertion that the environmental

damage was easily identifiable is not credible in light of the fact that it took

Shelton six years, from when they purchased the property in 2002 until they

filed suit in 2008, to notice the damage. In light of this evidence, we agree with

the district court that Shelton’s predecessor was an unknown creditor. 

As an unknown creditor, Shelton was entitled only to notice by publication.

Mullane, 339 U.S. at 316–17 (1950). Placid notified unknown creditors by

publication in the Wall Street Journal on three separate occasions. According

to Fifth Circuit precedent, notice by publication in the Wall Street Journal is

sufficient for unknown creditors. Crystal Oil Co., 158 F.3d 291, 298 (5th Cir.

1998). Therefore, Shelton received adequate notice and summary judgment was

appropriate.

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III. Conclusion

For the aforementioned reasons, we AFFIRM the district court’s judgment. 

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