Court Opinion

ID: 43019
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:46:21+00
Date Added: 2024-06-11T17:16:58.346743
License: Public Domain

United States Court of Appeals
                                                                   Fifth Circuit
                                                                F I L E D
                    UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit                   June 12, 2006

                                                            Charles R. Fulbruge III
                                                                    Clerk
                            No.    05-10861

                In the Matter of: COASTAL PLAINS, INC.

                                                                  Debtor,

                    INDUSTRIAL CLEARINGHOUSE, INC.

                                              Appellant-Cross-Appellee,

                                  VERSUS

                           JACKSON WALKER,

                                              Appellee-Cross-Appellant.

            Appeals from the United States District Court
                  For the Northern District of Texas
                              3:04-CV-174

Before GARWOOD, DAVIS, and GARZA, Circuit Judges.*

PER CURIAM:**

       Based on our review of the record, the briefs of the parties

and oral argument of counsel we are satisfied that neither the

  *
   Judge Garza concurs in the judgment only.
  **
    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opinion should not be published and is not precedent except under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.
bankruptcy court nor the district court committed reversible error:

       1.      We reject appellant’s argument that the bankruptcy court

and district court erred in concluding that the malpractice case

against Jackson Walker was not abandoned when the bankruptcy case

was closed.       The determination by the Texas state court that ICHI

had no standing to assert this malpractice claim because it was not

owned by appellant but rather remained in the bankruptcy proceeding

is binding on appellant and precluded it from relitigating this

issue in bankruptcy court.

       We are also satisfied that the state court had jurisdiction to

make    this     determination.    The   bankruptcy   court’s   exclusive

jurisdiction is quite narrow.      As we held in the City of Brady, TX

v. Sanders, 936 F.2d 212, 218 (5th Cir. 1991),

       Thus, under section 1471, the only aspect of the
       bankruptcy proceeding over which the district courts and
       their bankruptcy units have exclusive jurisdiction is
       “the bankruptcy petition itself.” In re Wood, 825 F.2d
90, 92 (5th Cir. 1987). In other matters arising in or
       related to title 11 cases, unless the Code provides
       otherwise, state courts have concurrent jurisdiction, and
       bankruptcy courts are prohibited from relitigating these
       matters if the state courts have already resolved them.

       The res judicata effect of the state court ruling is plain on

the record and we are free to apply this doctrine even though

appellees did not assert res judicata as an affirmative defense.

See Nagle v. Lee, 807 F.2d 435, 438 (5th Cir. 1987) and American

Furniture Co. v. International Accommodations Supply, 721 F.2d 478,

482 (5th Cir. 1981).

       2.      The bankruptcy court did not abuse its discretion in

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refusing to reopen the bankruptcy case.         Although the debtor did

not schedule the claim against Jackson Walker as an asset, before

the bankruptcy case was closed on December 12, 2000, the trustee

considered pursuing the claim against Jackson Walker and declined

to   do   so.    Neither    Coastal     Plains,   Inc.     or   Industrial

Clearinghouse,   Inc.   objected   to   the   bankruptcy   court’s   order

closing the case as a no asset case.          Appellant did not seek to

reopen the bankruptcy case until May 30, 2003 after the state court

dismissed its malpractice claim.        The bankruptcy court did not

abuse its discretion in concluding that there was no cause to

reopen the proceeding where “a purchaser of assets that were once

estate assets is not happy with the trustee’s decision regarding

the administration of one of the estate’s alleged assets.”

     AFFIRMED.

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