Court Opinion

ID: 1087297
Source: CourtListenerOpinion
Date Created: 2013-10-29 00:00:59.759932+00
Date Added: 2024-06-11T12:52:05.424400
License: Public Domain

FILED
                            NOT FOR PUBLICATION                              OCT 28 2013

                                                                         MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                        U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: PLANT INSULATION CO.,                     No. 12-17466

              Debtor,                            D.C. No. 3:12-cv-01887-RS

FIREMAN’S FUND INSURANCE                         MEMORANDUM*
COMPANY; UNITED STATES FIRE
INSURANCE COMPANY,

              Plaintiffs,

  And

ONEBEACON INSURANCE
COMPANY; AMERICAN HOME
ASSURANCE COMPANY; GRANITE
STATE INSURANCE COMPANY;
INSURANCE COMPANY OF THE
STATE OF PENNSYLVANIA;
INSURANCE COMPANY OF THE
WEST; SAFETY NATIONAL
CASUALTY CORPORATION;
TRANSPORT INDEMNITY COMPANY;
UNITED STATES FIDELITY AND
GUARANTY COMPANY,

              Plaintiffs - Appellants,

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
 v.

PLANT INSULATION COMPANY,

            Debtor-in-Possession -
Appellee,

OFFICIAL COMMITTEE OF
UNSECURED CREDITORS, c/o
Sheppard Mullin Richter & Hampton,
LLP,

            Defendant - Appellee,

FUTURES REPRESENTATIVE, The
Honorable Charles B. Renfrew (Ret.),

            Real-party-in-interest -
Appellee.

In re: PLANT INSULATION CO.,           No. 12-17467

            Debtor,                    D.C. No. 3:12-cv-01887-RS

FIREMAN’S FUND INSURANCE
COMPANY,

            Plaintiff,

AMERICAN HOME ASSURANCE
COMPANY; GRANITE STATE
INSURANCE COMPANY; INSURANCE
COMPANY OF THE STATE OF
PENNSYLVANIA; INSURANCE
COMPANY OF THE WEST; SAFETY
NATIONAL CASUALTY
CORPORATION; TRANSPORT
INDEMNITY COMPANY; UNITED
STATES FIDELITY AND GUARANTY
COMPANY,

            Plaintiffs,

 And

UNITED STATES FIRE INSURANCE
COMPANY,

            Plaintiff - Appellant,

 v.

PLANT INSULATION COMPANY,

            Debtor-in-Possession -
Appellee,

OFFICIAL COMMITTEE OF
UNSECURED CREDITORS, c/o
Sheppard Mullin Richter & Hampton,
LLP,

            Defendant - Appellee,

FUTURES REPRESENTATIVE, The
Honorable Charles B. Renfrew (Ret.),

            Real-party-in-interest -
Appellee.

                  Appeal from the United States District Court
                     for the Northern District of California
                   Richard Seeborg, District Judge, Presiding
                       Argued and Submitted April 19, 2013
                            San Francisco, California

Before: NOONAN, O’SCANNLAIN, and N.R. SMITH, Circuit Judges.

      Appellee insurance companies (the “Non-Settling Insurers”) challenge the

bankruptcy court’s confirmation of Plant Insulation Co.’s Chapter 11 plan. We

address several of their claims in an opinion filed concurrently with this

memorandum disposition. The relevant facts are discussed in that opinion.

                                           I

      The Non-Settling Insurers argue that the bankruptcy court erred in admitting

certain expert testimony. The court’s evidentiary rulings are subject to “abuse of

discretion” review. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141 (1997).

      First, the Non-Settling Insurers allege that the experts, Steven Snyder and

David McClain, have a direct financial stake in the outcome of the case because of

their relationships with the debtor and the Creditors’ Committee and this precluded

them from testifying. This is not our law. Generally, “evidence of bias goes

toward the credibility of a witness, not his competency to testify.” United States. v.

Abonce-Barrera, 257 F.3d 959, 965 (9th Cir. 2001).

      Second, the Non-Settling Insurers argue that these experts did not use

“reliable principles and methods” in presenting their testimony. In the Daubert

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inquiry (codified in Fed. R. Evid. 702), “the trial court must assure that the expert

testimony ‘both rests on a reliable foundation and is relevant to the task at hand.’”

Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010) quoting Kumho Tire Co. v.

Carmichael, 526 U.S. 137, 141 (1999). But these prongs are flexible. See id. at

564. Under this inquiry, an expert can testify on the basis of his experience

without using an explicitly scientific methodology. See United States v. Laurienti,

611 F.3d 530, 548 (9th Cir. 2010). This was the case here.

      For these reasons, the bankruptcy court did not abuse its discretion in

admitting this expert testimony.

                                           II

      The Non-Settling Insurers also argue that the plan was not proposed in good

faith pursuant to 11 U.S.C. § 1129(a)(3). The bankruptcy court’s finding of good

faith is evaluated for clear error. In re Gen. Teamsters, Warehousemen, and

Helpers Union, Local 890, 265 F.3d 869, 872 (9th Cir. 2001).

      A plan is proposed in good faith as long as it “satisfies the purposes of the

bankruptcy code,” Id. at 877, and the review focuses on the “totality of the

circumstances.” In re Symar Plaza L.P., 314 F.3d 1070, 1074 (9th Cir. 2002).

Here, the Non-Settling Insurers’ fail to point to specific facts in the record which

undermine the bankruptcy court’s key findings establishing good faith. Neither

                                           5
general allegations of unseemliness nor assertions that the plan undermined their

nonbankruptcy rights suffices to demonstrate clear error. Id. at 1075. Similarly,

there is no evidence in the record suggesting that the reorganized debtor will

breach any obligation to the Non-Settling Insurers. The bankruptcy court did not

clearly err in finding good faith.1

      AFFIRMED.

      1
       The Non-Settling Insurers’ motion to take judicial notice, filed April 2,
2013, is hereby denied as moot.

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