Court Opinion

ID: 4748700
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:43:10.267624+00
Date Added: 2024-06-11T08:08:39.003026
License: Public Domain

Grosse, J.
¶29 (dissenting) — In a bankruptcy action, a potential creditor is entitled to actual notice of the debtor’s bankruptcy only if the potential creditor and his or her claim is reasonably ascertainable to the debtor through the debtor’s reasonably diligent efforts. In order for a potential creditor’s claim to be reasonably ascertainable to the debtor, the debtor must have in his or her possession some specific information that suggests both the claim for which the debtor may be liable and the entity to whom he or she would be liable. Because at the time Todd Shipyards Corporation (Todd) filed for bankruptcy it did not have in its possession some specific information that reasonably suggested it would be liable to Roger Herring for his asbestos related tort claims, Herring was an unknown creditor and publication notice was sufficient.
¶30 The majority’s analysis is deficient in two major respects. First, the central issue here is whether Herring was a known or unknown creditor, not whether the Asbestos Workers Union Local No. 7 (AWU Local No. 7) was a known or unknown creditor. After all, it is Herring who has filed the claim here, not the union.37 Second, in holding that the union was entitled to actual notice because Todd knew that members of the AWU Local No. 7 “could reasonably be expected to suffer asbestos-related diseases for which they *493would file tort claims,”38 the majority applies the “reasonably foreseeable” test rejected in Chemetron 39 and fails to faithfully apply the reasonably ascertainable test articulated in the case law.
¶31 Turning first to the facts, it is uncontested that a search of Todd’s own books and records would not have revealed Herring’s name and address. It is also uncontested that Todd, reasonably relying on the bankruptcy court’s order setting out who was entitled to actual notice, personally notified all entities on its accounts receivable and payable registers, all entities that conducted business with Todd, and all unions that represented Todd employees.40 The Marsh declaration also states that Todd identified its subcontractors as entities to whom it would send actual notice. “[E]veryone who conducted business with Todd” and Todd’s “subcontractors” are categories that would presumably include Herring’s employer.
¶32 These steps are enough under these circumstances to constitute reasonable diligence on the part of Todd, and this court should not impose the additional requirement that Todd provide notice to a noncreditor (the union) in the hope that it would identify a potential creditor (Herring) whose identity and potential claim were unknown to Todd.41 Such a requirement is inconsistent with existing case law defining when a potential claim is reasonably ascertainable. As the case law holds, the appropriate test of whether a potential claim is reasonably ascertainable is determined based on the information the debtor has in its possession at the time of the bankruptcy proceedings and *494not on a factual finding as to what might have happened had the debtor notified a noncreditor. As summarized by the Fifth Circuit: “[I]n 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.”42
¶33 Furthermore, decisions such as these should not turn on often disputed scientific studies addressing how foreseeable a claim may be under the circumstances of a specific case.43 Nor should a debtor be required to provide actual notice to anyone who potentially could have been affected by their actions.44 Instead the test is whether the potential claimant and his claim are reasonably ascertainable, meaning the debtor has in his possession “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.”45 Such a rule, when properly applied, balances the interests of potential creditors with “the important goal of prompt and effectual administration and settlement of debtors’ estates” and establishes a workable standard upon which debtors and courts may rely.46
¶34 Here, the majority fails to properly apply the reasonably ascertainable test. The majority’s analysis turns on its finding that Todd “knew that members of the Asbestos Workers Union Local No. 7 (Local 7) who had worked at Todd could reasonably be expected to suffer asbestos-related diseases for which they would file tort claims.”47 This “could reasonably be expected”48 test applied by the majority is no *495different than the “reasonably foreseeable”49 test rejected in Chemetron and is not the “reasonably ascertainable” test which the majority purports to apply.
¶35 While Todd may have been generally aware that there were asbestos related claims for which it may be liable, the undisputed facts of this case reveal that it possessed no specific information of Herring’s identity or his exposure to asbestos. Todd thus did not have in its possession specific information that reasonably suggested it would be liable to Herring for his asbestos related tort claims. Therefore, Herring was an unknown creditor and notice by publication was sufficient.
¶36 For the above reasons, I respectfully dissent.
Review granted at 159 Wn.2d 1004 (2007).

 Even if the issue turned on whether the union was a known creditor, there is nothing in the record to support the contention that the union was a known creditor because there is nothing in the record showing that the AWU Local No. 7 had any existing or potential claims against Todd. To the contrary, Todd points out the AWU Local No. 7 did not represent Todd employees, but employees of Todd subcontractors. Thus, they had no collective bargaining agreements or other contracts with Todd that could give rise to claims making them known creditors to Todd for purposes of bankruptcy.

 Majority at 481.

 Chemetron v. Jones, 72 F.3d 341, 347 (3d Cir. 1995).

 Decl. of Michael Marsh (“Todd made diligent efforts to identify and notify potential creditors of its bankruptcy. Such efforts included notifying individuals on its accounts receivable and accounts payable registers, notifying everyone who conducted business with Todd, and notifying all unions representing Todd’s employees. In addition, I recall that Todd Shipyards identified its subcontractors as entities to whom I would send actual notice.”).

 That Todd chose to notify the unions that represented Todd employees does not undermine Todd’s position in this case that it was not required to notify Herring’s union. This is because the unions Todd notified were known creditor’s to Todd, with potential claims under collective bargaining agreements.

 In re Crystal Oil, 158 F.3d 291, 297 (5th Cir. 1998).

 Chemetron, 72 F.3d at 348.

 Chemetron, 72 F.3d at 347-48.

 Crystal Oil, 158 F.3d at 297.

 Chemetron, 72 F.3d at 348.

 Majority at 481 (emphasis added).

 Majority at 481.

 Chemetron, 72 F.3d at 347-48.