Opinion
No. 97 Civ. 3081 (TPG)
August 27, 1998
OPINION
Cris Ericson, pro se, appeals from a order of the Bankruptcy Court for the Southern District of New York dated February 10, 1997 closing the above-captioned chapter 11 cases. The order is affirmed.
Facts
To the greatest extent possible, the following facts are taken from appellant's notice of appeal and moving papers. Because appellant is pro se, however, she neglected to provide the court with complete information concerning the Bankruptcy Court proceedings and the history of her underlying dispute with IDC Services and others (some of whom are debtors in this case and some of whom are not). Accordingly, the court has also relied upon the debtors' papers, and in particular the record on appeal provided by the debtors.
Interpreting this information in the light most favorable to appellant, the following narrative emerges. In July, 1991 Ericson was working as an "extra" for a movie called "Point Break." She was hired to fill a role in a bank robbery scene. During this scene, bags of "exploding money" were used. The concept of exploding money requires some explanation. In the banking industry, as a countermeasure to robbery, banks sometimes place packets of colored die attached to small explosive charges in bags used to carry cash. If the bags of money are stolen, the charges can be made to explode and both the stolen money and the thief become saturated with the dye. This facilitates tracing the stolen cash and the thief.
However this works in the banking industry, during the shooting of Point Break, the bags of money were intended to blow apart rather dramatically. Ericson explains that bags of exploding money were thrown at her repeatedly over the course of four days of filming in June, 1992, resulting in physical injury. She claims that the explosions were painful, disoriented her and damaged her hearing, although she recovered from these injuries. She also claims that the special-effects explosives used to create the exploding money contained chemicals such as PETN, lead azide and lead styphnate, which produced toxic fumes when ignited. Ericson claims that she inhaled these fumes and suffered neurological damage from lead poisoning. Ultimately, these claims developed into the idea that the movie producers and the special effects company violated federal prohibitions on the use of military high explosives, city ordinances concerning fireworks, and federal regulations concerning chemical weapons. Ericson contacted the Los Angeles Fire Department, the FBI, the United States Attorney's office, and others in an effort to expose these events and seek redress. She sought (and still seeks) information concerning the contents of the explosives used, fragments of the "bomb shells" used on the movie set, and copies of the film outtakes of her injuries.
In March, 1993 Ericson filed a lawsuit in the Superior Court of California, Los Angeles County, making the claims outlined above. As a defendant she named Cenex West, Inc., a company that provided payroll services for temporary actors in the movie industry. Cenex West later changed its name to Production Payments, Inc. ("PPI"), and is a debtor in this proceeding. Ericson also named as defendants the producers of Point Break, Patrick Swayze (the actor who she claims threw the exploding money at her), and others.
On November 29, 1993 the debtors in this case filed for chapter 11 bankruptcy protection in this district. This stayed Ericson's suit in California, which was still at the pre-trial stage. In addition to PPI, the debtors are two PPI affiliates named IDC Services, Inc. and IDC Entertainment, L.P. It is not clear what role, if any, the affiliates played in Ericson's alleged injuries. According to debtors' counsel, each of the three debtors' Chapter 11 cases was consolidated for procedural purposes only, and all three cases were jointly administered under No. 93 B 45992. Ericson filed several proofs of claim in the Chapter 11 proceeding, seeking $ 110 million for "their sales of product of extortion|math|4copyright infringement and I have not had psychiatric treatment for the injuries." Attached to the proof of claim was approximately 80 pages of supporting documentation, including a "Protest Song" submitted to the California court, whose tenor is indicative of the focus and the general nature of Ericson's papers.
On September 22, 1994, Judge Bernstein lifted the stay against Ericson's California suit so that her claims could be adjudicated and valued against the bankruptcy estate. After further litigation, the California court dismissed Ericson's claims with prejudice because they were barred by the statute of limitations or subject to the California worker's compensation law, which was the exclusive remedy. Because Ericson had previously filed a worker's compensation claim, the California court held that she presented no actionable claims. Accordingly, her claim against the debtors' estate was valueless.
Ericson exhausted her right of appeal in the California courts in January, 1997, and did not petition the United States Supreme Court for certiorari. Accordingly, the judgment of dismissal is final and is res judicata.
While Ericson was pursuing her appeals, the debtors proposed a plan of reorganization which was approved without objection by the Bankruptcy Court on September 13, 1995. Under the plan of reorganization, the debtors established a monetary reserve to cover Ericson's claims then pending in California. Ericson did not object to the amount reserved, and as her claims proved valueless, no money was ever distributed to her.
The debtors then moved to close the Chapter 11 case. See 11 U.S.C. § 305(a). Ericson and the United States Trustee objected. However, the motion was granted over their objections on February 7, 1997. It is from this order that Ericson makes the present appeal (the Trustee does not appeal). She seeks a remand to the Bankruptcy Court to correct fraud in the plan of reorganization, specifically statements by the debtors that no PPI employees were ever exposed to federally-regulated toxic, hazardous substances or high-explosives.
Discussion
As an initial matter, the court must address the scope of this appeal. The Bankruptcy Court's February 7 order is the only order properly appealed from, and the court's review is limited to the correctness of that order. This is important because Ericson seeks relief beyond the scope of that order. Essentially, she seeks review of the California court's determination that her claims were limited to worker's compensation remedies. For example, her brief on appeal is captioned "Appeal of Cris Ericson of CA State Court 11/06/91 Opinion under Article I, Sec. 10, cl.1 of Constitution and 29 C.F.R. § 1910.1200; 28 U.S.C. § 158." The text of her moving papers show that she seeks the following relief: to make case law banning the use of "military explosives" as "special effects" and "smoke bombs"; for the court to "get control of the entertainment industry and determine that military explosives" used by debtors are not unregulated "special effects" or "smoke bombs"; to have film footage (outtakes) of her destroyed in order to protect her privacy; to void her employment contract with PPI because it was signed involuntarily and under duress; to revoke the debtors' "Certificate of Authority to do business" until they stop hiring temporary non-union employees under duress; to determine the contents of the explosive squibbs used in the filming of Point Break; and to receive $ 55 million in exemplary damages.
U.S. Const. Art. 1, § 10, cl.1 concerns, inter alia, the impairment of the obligation of contract; 29 C.F.R. § 1910.1200 deals with reporting requirements for employers and others who handle hazardous substances.
The court cannot grant this relief. The court can only review the propriety of the order closing the case. Within that subject matter, this court must accept the Bankruptcy Court's findings of fact unless they are clearly erroneous, Fed.R.Bankr.P. 8013; Manville Forest Prod's Corp. v. Manville Forest, 896 F.2d 1384, 1388 (2d Cir. 1990), but may review de novo questions of law. In re: DG Acquisition Corp., 213 B.R. 883 (S.D.N.Y. 1997). Therefore, the court cannot provide the affirmative relief Ericson seeks.
Turning to the February 7, 1997 order, 11 U.S.C. § 350(a) provides:
After an estate is fully administered and the court has discharged the trustee, the court shall close the case.
Bankr. Rule 3022 further states:
After an estate is fully administered in a chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case.
The Bankruptcy Code does not define "fully administered" and the Second Circuit has not defined the term. However, case law provides several benchmarks for determining whether a chapter 11 case should be closed. Clearly, the Bankruptcy Court must ensure that no motions, contested matters or adversary proceedings remain to be decided. In Re: Greenfield Drive Storage Park, 207 B.R. 913, 918 (9th Cir. BAP 1997); Matter of Wade, 91 F.2d 402, 407 n. 2 (7th Cir. 1993). In addition, several courts rely upon the 1991 Advisory Committee Note to Bankr. Rule 3022, which states the court should consider the following factors in deciding whether to close a chapter 11 case: 1) whether the order confirming the plan has become final; 2) whether deposits required by the plan have been distributed; 3) whether the property proposed by the plan to be transferred has been transferred; 4) whether the debtor or the successor of the debtor under the plan has assumed the business or the management of the property dealt with by the plan; 5) whether payments under the plan have commenced; and 6) whether all motions, contested matters, and adversary proceedings have been finally resolved. See In Re: Gates Community Chapel of Rochester, Inc., 212 B.R. 220, 223-224 (W.D.N.Y. 1997); In Re: Jay Bee Enter., 207 B.R. 536, 538 (Bankr.E.D.Ky. 1997).
Several court have applied a slightly lesser benchmark, looking to see only if the case has reached the point of "substantial consummation" as defined in 11 U.S.C. § 1101(2). E.g., In Re: Walnut Associates v. Saidel, 164 B.R. 487 (E.D.Pa. 1994); In Re: BankEast Corp., 132 B.R. 665 (Bankr.D.N.H. 1991). Substantial consummation means 1) the transfer of all or substantially all of the property proposed by the plan or reorganization to be transferred; 2) assumption by the debtor or its successor under the plan of the business or management of substantially all of the property dealt with in the plan; and 3) commencement of distribution under the plan. 11 U.S.C. § 1101(2). However, the approach that looks to the Advisory Note provides a more complete and flexible standard for determining when to close a chapter 11 case, and is therefore preferable.
Under either standard, debtors' plan of reorganization was "fully administered." Judge Bernstein noted in his order closing the case that a plan of reorganization had been confirmed and that all disputed claims except Ericson's had been resolved by the court. Judge Bernstein also noted that the plan had been substantially consummated, as substantially all of the payments required under the plan of reorganization had been made. He concluded that no further administration of the estate was necessary.
Based on this order, the Bankruptcy Court acted properly in closing the case under the standards set forth above. Moreover, it acted properly in doing so over Ericson's objections. The California court determined that Ericson had no right to recover damages for her injuries (beyond her worker's compensation claim). The Bankruptcy Court was obligated to respect that determination. 28 U.S.C. § 1738. Therefore, Ericson's claim against the debtors had no monetary value, and she was not entitled to a distribution from the estate. Debtors' alleged false statements are therefore irrelevant, and no purpose would be served by delaying closure of the case.
This is not to say that Ericson suffered no injuries during the filming of Point Break, or that she received adequate medical treatment thereafter, or that she has or has not been treated fairly by her adversaries, the California courts, government agencies, and others. Her objections have no merit in this proceeding because she seeks relief that cannot be obtained in this chapter 11 case. She wishes to relitigate the California state court decision. However, this court must give full faith and credit to the decisions of that court, and cannot undo them. Ericson also wishes to reform the movie industry and change public policy regarding the working conditions of movie extras. In principle, those are noble goals. However, the court cannot provide that relief ancillary to a bankruptcy proceeding. Because Judge Bernstein could not fashion any relief that would satisfy Ericson's goals, the court could not close the chapter 11 case without her objection. These objections cannot be sustained, however, and accordingly the order closing the bankruptcy proceeding is affirmed.
SO ORDERED.