Court Opinion

ID: 44786
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:28:20+00
Date Added: 2024-06-11T14:57:13.182726
License: Public Domain

United States Court of Appeals
                                                                                  Fifth Circuit
                                                                               F I L E D
                       IN THE UNITED STATES COURT OF APPEALS
                                                                                August 2, 2006
                                     FOR THE FIFTH CIRCUIT                 Charles R. Fulbruge III
                                                                                   Clerk

                                            No. 05-10995
                                          Summary Calendar

        In The Matter Of: TIC UNITED CORP.

                                                           Debtor

----------------------------------------------------------------------

        MITCHELL G. WILLIS
                                                           Appellant

                                                  versus

        JOHN H. LITZLER, Chapter 7 Trustee
                                                           Appellee

                     Appeal from the United States District Court for
                              the Northern District of Texas
                                (USDC No. 3:05-CV-557)
            _________________________________________________________

Before REAVLEY, BARKSDALE and STEWART, Circuit Judges.

PER CURIAM:*

        *
        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not be published and is not precedent except under the limited circumstances set forth in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.

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       We affirm for the following reasons:

       1.      Willis argues that the bankruptcy court lacked subject matter jurisdiction.

We disagree. Willis’ state court lawsuit was related to the bankruptcy case because “the

outcome of that proceeding could conceivably have [an] effect on the estate being

administered in bankruptcy.” In re Bass, 171 F.3d 1016, 1022 (5th Cir. 1999). Willis’

state law tort claims can affect the debtor’s bankruptcy estate by decreasing the amount of

available assets, i.e., the letter of credit or the cash, if the stay is lifted and litigation

pursued. Accordingly, the bankruptcy court had jurisdiction to issue the ADR order.

       2.      Willis also argues that his due process rights were violated because he did

not receive notice of the hearing on the trustee’s ADR motion. We disagree. While

notice was sent to Willis, it was originally sent to the wrong address. However, after

entry of the bankruptcy court’s ADR order, Willis was properly served with a “Notice of

Order Granting Trustee’s Motion For Approval of Mandatory Alternative Dispute

Resolution Procedure.” This notice was sent twice to the correct address. Accordingly,

Willis was aware of the trustee’s ADR motion and the bankruptcy court’s ADR order for

over seven months prior to filing his Rule 60(b) motion. Further, while Willis did not

have notice prior to the hearing on the trustee’s ADR motion, the other 200 or so

similarly situated claimants did. They appeared at the hearing and made the same

arguments that Willis would have made. Accordingly, remanding this case back to the

bankruptcy court would be futile.

       3.      Willis argues that the trustee failed to meet his burden to obtain an

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injunction against Willis’ state court proceeding. He also contends that he is entitled to

an adversary proceeding pursuant to Bankruptcy Rule 7001. The problem with these

contentions is that the bankruptcy court never enjoined Willis’ state court proceeding.

Rather, the bankruptcy court’s ADR order recognized that the debtor’s bankruptcy

petition gave rise to an automatic stay and required litigants with claims against the

debtor’s estate to make a good faith effort to resolve their disputes through the ADR

process before the court would consider a motion for relief from the automatic stay.

There is no injunction. Like the other 200 or so similarly situated claimants, Willis must

simply make a good faith effort to settle his dispute before the stay will be lifted.

       4.     Willis argues that the ADR order would require him to commit perjury.

This argument is baseless and, moreover, was never raised in the district court, and

therefore, waived.

AFFIRMED.

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