Opinion
BANKRUPTCY CASE NO. 09- 31253-SGJ-11 CIVIL ACTION NO. 3:11-CV-3359-G ADVERSARY NO. 10- 03263
09-17-2014
IN RE: HALLWOOD ENERGY, L.P., ET AL., Debtors. RAY BALESTRI, TRUSTEE OF THE HALLWOOD ENERGY I CREDITORS' TRUST, Appellant/Plaintiff, v. HUNTON & WILLIAMS, LLP, ET AL., Appellees/Defendants.
ORDER ACCEPTING REPORT AND RECOMMENDATION OF THE UNITED STATES BANKRUPTCY COURT
The United States Bankruptcy Court made a report and recommendation in this case. See Bankruptcy Court's Report and Recommendation to District Court (docket entry 9). Objections to that recommendation were filed by both the plaintiff and the defendants. See Objections and Brief of Plaintiff Ray Balestri, Trustee of the Hallwood Energy I Creditors' Trust, to the Bankruptcy Court's Report and Recommendation to District Court (docket entry 12); Defendants' Objections to Bankruptcy Court's Report and Recommendation to District Court (docket entry 13). The parties also filed responses to each other's objections, see Plaintiff's Response Brief in Opposition to Defendants' Objections to Bankruptcy Court's Report and Recommendation to District Court (docket entry 22); Defendants' Response to Plaintiff's Objections to Bankruptcy Court's Report and Recommendation and Brief in Support (docket entry 21), and the defendants filed a reply to the plaintiff's response. See Reply Supporting Defendants' Objections to Bankruptcy Court's Report and Recommendation to District Court (docket entry 25). The district court has reviewed de novo the bankruptcy court's recommendation. The court ACCEPTS the report and recommendation of the United States Bankruptcy Court in all respects EXCEPT for the bankruptcy court's rejection of the defendants' waiver argument.
Accordingly, summary judgment/judgment on the pleadings is GRANTED in favor of the defendants on count one (negligence) and count three (aiding and abetting in breaches of fiduciary duties) of the plaintiff's complaint. Summary judgment/judgment on the pleadings is DENIED on count two (breach of fiduciary duty), but the plaintiff's remedy, in the event that liability is found, is limited to possible fee forfeiture. Furthermore, the defendants' objection to the bankruptcy court's recommendation that the defendants' entire waiver defense be rejected is SUSTAINED. The court concludes that there remains a triable issue of material fact concerning whether the plaintiff waived his right to damages for the defendants' alleged breaches of their fiduciary duty after February 27, 2009, so summary judgment on that issue is DENIED.
SO ORDERED. September 17, 2014.
/s/_________
A. JOE FISH
Senior United States District Judge