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Cox v. Specialty Vehicle Solutions LLC

United States District Court, E.D. Kentucky, Southern Division, Pikeville

December 17, 2019

COY G. COX, JR., Plaintiff,
v.
SPECIALTY VEHICLE SOLUTIONS LLC, Defendant.

          OPINION AND ORDER

          KAREN K. CALDWELL UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiff's motion to alter or amend the Court's judgment. Plaintiff Coy G. Cox, Jr. originally brought suit in state court, and Defendant Specialty Vehicle Solutions LLC removed the action to this Court. (DE 1.) The Court granted Defendant's motions to dismiss both Plaintiff's original complaint and a subsequent complaint that Plaintiff filed later. (DE 25.) The Court denied Plaintiff's subsequent motion to alter or amend the Court's judgment. (DE 36.) The United States Court of Appeals for the Sixth Circuit then vacated the dismissal and remanded the case for further proceedings. (DE 39.) After the Court granted Defendant's motion for summary judgment (DE 54; DE 55), Plaintiff filed this motion to alter or amend that judgment (DE 56). For the reasons stated below, the Court denies Plaintiff's motion. Because the Court also finds that a hearing would not aid in the resolution of the issues presented, it denies Plaintiff's request for oral argument.

         Background

         On February 28, 2014, Plaintiff, on assignment as a federal task force officer with the Internal Revenue Service, was conducting surveillance inside a Ford van that had been specially modified by Defendant. (DE 1-1 at 2; DE 14 at 1; DE 49 at 1.) Plaintiff alleges that a battery installed in the van began “to emit and spew noxious and deadly gases, liquids, and vapors into the enclosed van compartment where users, including Plaintiff, were to work.” (DE 1-1 at 4.) Plaintiff alleges that as a result of exposure to “harmful substances for a significant amount of time… he suffered severe bodily injuries.” (DE 1-1 at 4.)

         On October 20, 2014, Defendant filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of New Jersey. (DE 10 at 2.) Defendant, however, did not list Plaintiff as a creditor, nor did it serve him with notice of the bankruptcy petition. (DE 53 at 1.)[1] On February 23, 2015, and apparently without knowledge of Defendant's bankruptcy, Plaintiff filed suit in Letcher County Circuit Court. (DE 1-1; DE 49 at 2.) The complaint asserts claims of strict liability, negligence, and fraud against Defendant. (DE 1-1.) Defendant then entered a notice of its bankruptcy proceeding - and the accompanying automatic stay - into the state court record. (DE 47 at 12-13.) As the Sixth Circuit would later summarize in the appeal in this case -

With certain exceptions not relevant here, “[a]n entity's act of filing a petition for bankruptcy operates as a ‘stay' of actions that could have been filed against the entity to recover claims.” In re Glob. Technovations Inc., 694 F.3d 705, 711 (6th Cir. 2012) (citing 11 U.S.C. § 362(a)). This “fundamental protection, ” Easley [v. Pettibone Mich. Corp.], 990 F.2d [905, ] 910 [1993], gives debtors a “breathing spell” to reorganize their financial affairs, In re Robinson, 764 F.3d 554, 559 (6th Cir. 2014) (citation and internal quotation marks omitted). Thus, “an action taken against a debtor during the duration of the automatic stay” is “invalid” - it is “without legal force or effect.” Easley, 990 F.2d at 909.

Cox v. Specialty Vehicle Sols., LLC, 715 Fed.Appx. 443, 447 (6th Cir. 2017).

         Plaintiff sought relief from the automatic stay and hired Warren Levy, a New Jersey bankruptcy attorney. (DE 48 at 3-4.) On June 2, 2015, Mr. Levy filed a motion for stay relief on behalf of Plaintiff. (DE 10-4.) The motion indicated that Plaintiff was seeking to “institute or resume” his state civil suit against Defendant. (DE 53 at 10.) Of note, Mr. Levy's notice of the motion for stay relief described Plaintiff's suit as pre-petition in nature. (DE 10-4 at 1.) This was incorrect, as Plaintiff did not file his state civil suit until months after Defendant's bankruptcy petition.

         Defendant objected to Plaintiff's motion for stay relief through its own bankruptcy attorney, Jennifer McEntee. (DE 47 at 22-24.) Ms. McEntee argued that Plaintiff's motion was both vague and an improper attempt to litigate a claim against a debtor currently in Chapter 11 bankruptcy proceedings. (DE 47 at 23.) Ms. McEntee did indicate, however, that “an amicable resolution could possibly be reached if [Cox] agreed to limit the relief requested in [his] proposed order to the extent of the insurance policy.” (DE 47 at 24.) Mr. Levy forwarded Defendant's objection to Plaintiff's personal injury attorneys, who then passed along the message to their client. (DE 47 at 3.) Levi James Daly, one of Plaintiff's personal injury attorneys, attests that on June 25, 2015, Plaintiff confirmed that he was willing to limit his recovery to the extent of Defendant's insurance coverage. (DE 47 at 3.) Mr. Daly advised Mr. Levy of Plaintiff's consent and instructed him to continue negotiating with Defendant's bankruptcy counsel. (DE 47 at 3-4.) The parties eventually agreed on a draft stay relief order. Per Defendant's request, the term “institute” was removed from the proposed order, allowing Plaintiff only to “resume and prosecute” his state civil suit. (DE 46 at 2; DE 10-5 at 2.) Ms. McEntee urges that she removed the term “institute” from the proposed order out of her belief that Plaintiff' suit was filed before Defendant's bankruptcy petition. (DE 46 at 2-3.)

         On August 7, 2015, the New Jersey bankruptcy court entered the parties' stay relief order, which states in relevant part:

[I]t is ORDERED that the automatic stay is vacated to permit [Cox] to resume and prosecute to conclusion the civil action identified specifically as:
Coy G. Cox, Jr. v. Specialty Vehicle Solutions, LLC,
Civil Action No. 15-CI-00040, Commonwealth of Kentucky, Letcher Circuit Court
only to permit [Cox] to seek to liquidate the claims for recovery made against [SVS]… provided… that [Cox] shall limit any claim for recovery… to the extent of ...

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