Court Opinion

ID: 801595
Source: CourtListenerOpinion
Date Created: 2012-06-05 16:55:21+00
Date Added: 2024-06-11T18:00:00.923890
License: Public Domain

NOT PRECEDENTIAL

         UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT
                   _____________

                       No. 11-2469
                      _____________

           In re: Split Vein Coal Company, Inc.,
                                      Debtor

              Split Vein Coal Company, Inc.

                             v.

              Gilberton Coal Company, Inc.;
                    Seedco NP, LLC,

               Gilberton Coal Company, Inc,
                                Appellant
                      _____________

        Appeal from the United States District Court
          for the Middle District of Pennsylvania
              (D.C. Civil No. 4-10-cv-01947)
          District Judge: Honorable Yvette Kane
                      _____________

        Submitted Under Third Circuit LAR 34.1(a)
                     May 25, 2012

Before: RENDELL, FUENTES and HARDIMAN, Circuit Judges

               (Opinion Filed: June 5, 2012)
                     _____________

               OPINION OF THE COURT
                   _____________
RENDELL, Circuit Judge.

       This case involves a Pennsylvania state-law conversion claim that was prosecuted

as an adversary proceeding in bankruptcy. After a two-day trial, the Bankruptcy Court

found, in a 29-page opinion, that defendant Gilberton Coal Company had converted

approximately 500,000 tons of culm, or coal refuse, that belonged to plaintiff-debtor Split

Vein Coal Company (but was stored on land owned by Gilberton) and ordered Gilberton

to pay Split Vein the $639,685 in profits it earned on the sale of that culm. Gilberton

moved the Bankruptcy Court to reconsider, and, when the Bankruptcy Court denied that

motion, appealed to the District Court. In a detailed, 20-page opinion, the District Court

affirmed the Bankruptcy Court’s judgment in all respects. Gilberton now appeals the

judgment of the District Court.1

       Gilberton raises six issues on appeal: (1) whether the Bankruptcy and District

Courts erred in concluding it waived the argument that Split Vein rejected the parties’

contract, an unexpired lease, as a matter of law under 11 U.S.C. § 365(d)(4); (2) whether

the Bankruptcy and District Courts incorrectly interpreted Pennsylvania law regarding the

abandonment of culm; (3) whether the Bankruptcy Court erred in concluding that Split

Vein did not abandon the culm; (4) whether the Bankruptcy Court erred in concluding

that Split Vein did not abandon the parties’ contract; (5) whether Split Vein met its

burden of proving conversion of the culm; and (6) whether Gilberton’s conversion was

properly excusable as an act necessary to avoid a public disaster. The Bankruptcy and

1
  The Bankruptcy Court and District Court exercised jurisdiction under 28 U.S.C.
§ 157(b) and § 158(a)(1), respectively, and under 28 U.S.C. § 1334. Our jurisdiction
arises under 28 U.S.C. § 158(d)(1).
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District Courts appropriately and adequately addressed each of those issues, and we have

little to add to their thorough and thoughtful analyses in this very fact-intensive case.

       Only one point warrants further discussion. Gilberton argues in its reply brief, for

the first time, that, assuming the parties’ agreement was a license, rather than a lease,

Split Vein failed to assume it in bankruptcy as required under 11 U.S.C. § 365(b)(1). In

brief, its logic proceeds as follows: (1) if the parties’ contract was not a lease, it was an

executory contract; (2) § 365(b)(1) requires a party assuming an executory contract to

cure all defaults or breaches; (3) Split Vein had breached or defaulted under the contract

in numerous ways; (4) Split Vein failed to cure those breaches and defaults; (5) therefore,

Split Vein failed to assume the contract under § 365(b)(1); and (6) even if Split Vein did

not reject the contract, it should be estopped from arguing it assumed the contract and

precluded from obtaining any relief under it.

       We will not consider this factually and legally complex question for the first time

on appeal, especially when asserted so belatedly in a reply brief. Gilberton could have,

and should have, raised this purportedly dispositive issue in the Bankruptcy Court before

the case went to trial. Instead, it waited until the reply brief of its appeal from the appeal

of the Bankruptcy Court’s decision, after Split Vein’s last opportunity to respond. These

circumstances do not warrant a departure from our ordinary practice of declining to

review issues that are not timely raised. See Gleason v. Norwest Mortg., Inc., 243 F.3d

130, 142 (3d Cir. 2001) (“Generally, barring exceptional circumstances . . . this Court

does not review issues raised for the first time at the appellate level. Although we have

discretion to review an argument not raised in the trial Court, we ordinarily refuse to do

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so.” (citations omitted)); Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 204 n.29

(3d Cir. 1990) (“As a general matter, the courts of appeals will not consider arguments

raised on appeal for the first time in a reply brief.”).

       Accordingly, we will affirm the judgment of the District Court.

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