2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
8-5-2004 

# I n Re: Mid s t at e Mt g P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 03-2153

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w . v i l l a no va . e du/thir dc ir c uit_2004/414NOT PRE CEDENT IAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT

____________ No. 03-2153

____________ IN RE: M ID ST AT E M OR TG AG E IN VE ST OR S, IN C., Debtor
LA W RE NC E S EL IN GE R, D .M .D.; EMELIA SE LINGER; JO HN H. S ER GE AN T, M .D.; FR AN CIS GO DR EY , M .D.; GEORGE B RENNAN, M.D.

v. GE RA LD J. W HI TE M AN , D.D .S.; ESTATE OF T HOM AS ENG LISH
La wr enc e Se ling er, D .M .D., Joh n H . Ser gea nt, M .D., Fra ncis Go dre y, M.D ., Ge org e B ren nan , M .D., Ap pellan ts

____________ On A ppeal from the Un ited States District Co urt

for the Dis tri ct of New Jersey (D.C. No. 02-cv- 04058) Distri ct Judge: Honorable Stanl ey R. Chesl er

____________* The Ho nora ble A rthur L . Alarc ón, S enior J udg e, Un ited Sta tes C ourt o f A ppea ls

for the Nint

h Circuit , si tti ng by des ignati on. 2

Argued May 27, 2004 Be for e: S CIR ICA , Chief Judge , F IS HER a nd A LARCÓN, * Circuit Judges
. (Fil ed: August 5, 2004) Matthew E. Moloshok Robert B. Rosen Hellri ng, Lindeman, Goldstei n & Siegal On e G atew ay Ce nter , 8 th Floor Newark, NJ 07102 James A. Scarpone ( Argued) Scarpone, St aiano & Savage 744 Broad Street , Suite 1901 Newark, NJ 07102 Attorneys for Appellants Da vid N . Rav in Ke vin M cN ulty Dale E. Barney(Argued) Gibbons, Del Deo, Dola n, Griffi nger & Vecchione One Riverfront

Plaza Newark, NJ 07102-5497 Attorney s for Appel lee, Gerald J. Whit eman, D.D.S. Ke vin M cN ulty Dale E. Barney(Argued) Gibbons, Del Deo, Dola n, Griffi nger & Vecchione One Riverfront

Plaza Newark, NJ 07102-5497 Attorneys for Appellee, Estate of Thomas E nglish

____________ OPINI ON OF THE COURT1 English i s deceased a nd his est ate i s the l iti gant in t his appeal . Although t

he capti on lis ts the debtor a s Midstat e Mortgage Investors, Inc., the part ies concur

that t he debtor’ s proper na me is Midstate Mortgage Investors Group, L. P. The Seli nger Parties are Lawrence Seli nger, D.M.D., John H. Sergeant , M.D., Fra ncis Godfrey , M.D., and Geo rg e Br en na n, M.D. 3 ____________ FIS HE R, Circuit

Judge
. Th e pa rties a re fa milia r w ith th e fa cts, w hich wil l no t be r ecite d he re in deta il. Appellees Gera ld J. Whiteman, D.D.S. and Thomas English had bee n limi ted part ners of debtor M idstate Mo rtgage Inve stors Grou p, L.P. (“M idstate”) and alon g with M idstate’s general partner , had guara nteed certain de bts of Midst ate t o appell ants, the Seli nger Parties. 1 Appellant s fil ed an invol untaryChapter 11 petiti on against Midstate a nd served on the cre ditor s’ committee. The plan as confirmed (“Plan”) contai ned language concerning releases of the appellees’ guarantees and releases were signed. After the case closed, Midstate de fault ed on its Plan obli gations to the Sel inger Parties . Appell ants sue d appell ees in s tate court t o enforce the guarant ees and for a de claration t hat the Plan and
re lea se s d id no t b ar re co ve ry. Whiteman and Englis h moved before the ba nkruptcycourt t o reopen the case, enforce the terms of the Plan, and restrain appellants from pursuing th e state-court lawsuit . The bankrupt cy court reopene d the case and denied the appell ants’ cross- motion for abst ention. The court concl uded that under the Pl an as confi rmed, the Selinge r Parties relea sed Whiteman and Engli sh from thei r guarantees. The court enjoi ned the Sel inger4

Parti es from prose cuting t he state-court

acti on or inst

ituting anyother ac tion t hat might interfere with the Plan or relea ses. The district c ourt affirmed, and so wil l we. Appellants argue that the bankruptcy court lacked juris diction to reopen the case and enforce t

he Plan. We disagree. “[W]here there is a cl ose nexus t o the bankruptcy plan or pr oceeding, as when a matter affects the interpret ation, implementation, consummation, executi on, or admi nist rati on of a confirmed plan . . . . retention of post-c onfirmation bankruptcy court jurisdi ction i s normall y appr opriate.” In re R esorts Int’ l, I nc. , 372 F.3d 154, 168-69 (3d Cir . 2004). That nexus exi sted her e where the disput e focused on the content and meaning of the Plan, i ssues over which the bankruptcy
cou rt ha d pr ope rly retai ned juris dicti on. See In re Marcus Hook Development Park, Inc. , 943 F.2d 261 , 266 ( 3d C ir. 1991 ) (ban krup tcy court h as “u ndisp uted” jurisdictio n to enforce own order) . That t he case was cl osed did not prevent t

he court f

rom reopening the c ase to en for ce its ow n or der
. See Do nalds on v . Bern stein , 104 F.3 d 54 7, 552 (3d Cir. 199 7) (b ank rup tcy co urt p rop erly reo pen ed c lose d ca se a nd a sser ted ju risdi ction ). Nor did the bankr

uptcycourt er

r in r efusing t o abstai n. Mandatoryabstention does not apply

where the proc eeding i s “core. ” In re Doningt on , 194 B.R. 750, 757 (D.N .J. 1996). Here, the bankruptcy court consi dered argument s regar ding Plan terms invol ving relea ses a nd d isch arg es, a s w ell as the c onf irma tion itself , ma kin g th is a c ore pro cee din g. See 28 U .S.C. § 157 (b)(2)(I), (J), (L). Indeed, the proce eding to en force the P lan is core2 W e lac k ju risdi ction to re view a dis creti ona ry refu sal to abs tain. 2 8 U .S.C . §

113 4(d); In re Feder al-Mogul Global , Inc. , 300 F.3 d 36 8, 38 9 n.1 4 (3 d C ir. 20 02) , cert. denied sub nom. Da imlerC hrysler C orp. v . Off icial Co mm . of A sbesto s Cla iman ts , 537 U.S. 11 48 (200 3). 5 because i t “coul d aris e onlyin the c ontext of a bankruptc y cas e.” Marcus Hook , 943 F.2d at 2 67 (q uo tat io n m ar ks om itte d) . A cc or di ng ly, m an da to ry a bs ten tio n d id no t ap pl y. 2 Appellant s next ar gue that the bankruptcy court misi nterpr eted the Plan, which provides in relevant part , “[a]llparties [which included the li mited partners and creditor s] shallexchange generalrelea ses upon the effecti ve date of t he Plan, however, the relea ses to [the general partner ] shal l remai n in escr ow until t he Plan is consummated.” We agree with the ba nkru ptcy cou rt that the Plan ’s plain langu age is d eterm inative . The release to the gener al part

ner could not

be deli vered unti l consummati on, but not hing indi cated t

hat the rel eases t o Whiteman and Englis h would be simil arlyretai ned. By t he Plan’s natural lang uag e, the app ellee s’ rel eas es to ok e ffe ct up on c onf irma tion
. See J. B. v . M. B. , 170 N.J. 9 , 18-1 9 (20 01) (f und ame ntal ca non is interpr etation of p lain term s) (pare nthetic ally discuss ing State Tr oopers Fraternal Assoc . v. New Jers ey , 149 N .J. 38, 47 (1997 )). The Seling er Pa rties nex t argue that the bank ruptcy co urt lack ed the autho rity to include the rel ease la nguage in the Plan and that it was amended without cons ent or notice . These ar guments ignore the pri nciple s of final ity that prevent col late ral at tacks once a plan i s confirmed and time t o appeal has expired. Absent fraud r edressable under3 Indeed, appella nts – who were on the creditor s’ committee – did not atte nd the confirmation heari ng and knew of the changes t o the Plan prior t o expirat ion of the 180- day period. Despi te thi s knowledge, t hey di d not ti mely c halle nge the Pla n. “[I]f a creditor ignor es the bankr uptcyproceedi ngs, he does so at hi s peri l.” Szostek , 886 F.2d at 1410 ( citi ng Ma tter of Greg ory , 705 F.2 d 11 18, 1 123 (9th Cir . 198 3)).

4 For example, appell ants sugge st that the y mayatta ck the Pla n under Fed. R. Civ. P. 60 (b). Th is argu men t ignore s the fa ct that the Ban krup tcy Rule s plainly state that in the R ule 60 conte xt, “a co mp laint to re vok e an o rder co nfirm ing a p lan m ay be filed only within t he time al lowed by [11 U.S. C.] § 1144.” Fed. R. Bank. P. 9024. As the period un de r S ec tio n 1 14 4 h as lo ng sin ce pa ss ed , R ul e 6 0 d oe s n ot ap pl y. Alo ng sim ilar lines, ap pellan ts mak e a nu mb er of c ontrac t-related argu men ts to atta ck the Pla n. They ask us to l ook to the release s and other parol evi dence, but

the releases are silent regard ing their timing, and parol eviden ce does n ot alter the Plan’s plain meani ng. We simil arlyrejec t the s uggesti on that t he Plan was void for

a lack of cons ideratio n. A ppelle es ag reed to help f und the P lan by disc harg ing a m ortgag e in the ir favor secured by t

he general partner ’s res idence, which is obvi ous conside rati on. 6 bank ruptcy law , a con firme d plan cann ot be c ollaterally ch alleng ed, ev en fo r failure to
com ply w ith th e C ode
. See In re Szostek , 886 F.2d 1405, 14 13-14 (3 d Cir. 198 9). Here, appel lants did not appe al from confi rmation and did not s eek revocation for fraud withi n 180 days as requi red by 11 U.S.C. § 1144. “Expiration of the limi tati ons period bar s a motion t o set as ide the confirmation of a re organization pl an even if t he fraud is not dis covered until t he period ha s passed. ” In re Orange Tree Assoc., Ltd. , 961 F.2d 144 5, 144 7 (9th Cir. 19 92); see also In re Fesq , 153 F.3d 113, 115 (3d Cir. 199 8). 3 Accordingly , it

is now too l ate for

appell ants t o seek revocation of t he Plan. 4 We have considered t

he appell ants’ remaini ng arguments and f ind them t o be wit hou t m er it . A cc or di ngl y , t he ju dgm en t o f the di st

ri ct co urt wi llbe AFFI RMED.