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In re Johns Manville Corp.

United States District Court, S.D. New York
Aug 31, 1984
No. 82 B 11656-76 (S.D.N.Y. Aug. 31, 1984)

Opinion

No. 82 B 11656-76.

August 31, 1984.


Personal Injuries — Jury Trials — District Courts — Liquidation of Claims


A party with a personal injury claim against the debtor dooes not have a right to have his claim tried under 28 U.S.C. § 157(b)(5), which was included in the Bankruptcy Amendments and Federal Judgeship Act of 1984. That section does not require a jury trial for personal injury actions; it merely sets forth the procedure to be followed if a jury trial takes place at all. See 28 U.S.C. § 157 at ¶ 4030.

[Opinion of the Court]

John F. KEENAN, United States District Judge: In October, 1978, Earl Roberts ("Roberts"), the movant in this action, underwent surgery for lung cancer caused by his exposure to asbestos-containing products. These products had been manufactured and/or sold by, among other companies, Johns-Manville Corporation and its subsidiaries and affiliates (collectively "Manville"), during the course of Roberts' employment in California.

In August, 1979, Roberts filed a civil action against Manville and other manufacturers and sellers of asbestos-containing products in the Superior Court of the State of California. The complaint alleged that Manville and the other defendants were legally responsible for causing his asbestos disease and resulting damages. That action was stayed as against Manville on August 26, 1982, pursuant to title 11, section 362 of the United States Code when Manville filed a petition under chapter 11 of the Bankruptcy Reform Act of 1978 (the "Code") in the United States Bankruptcy Court for the Southern District of New York.

Subsequently, Roberts' claims against all other defendants in the California Superior Court civil action were settled. The claims against Manville remain unresolved pursuant to the automatic stay provision of section 362 of the Code.

Roberts now moves, pursuant to section 157(b)(5) of the Bankruptcy Amendments and Federal Judgeship Act of 1984, Public Law No. 98-353 (the "1984 Act"), for an order transferring Roberts' claims against Manville from the bankruptcy court proceedings commenced when Manville filed a petition under chapter 11 of the Code (the "Manville Case") to the United States District Court for the Central District of California or, in the alternative, to the United States District Court for the Southern District of New York, for the purpose of trial of these claims and of all pre-trial matters and proceedings related thereto. For the reasons stated hereafter, the motion is denied.

Section 157(b)(5) of the 1984 Act provides:

The district court shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending.

Pursuant to this section, trial of personal injury or wrongful death claims related to a bankruptcy proceeding must be held in the district courts. The section, however, does not require that all personal injury and wrongful death claims be tried. It merely sets forth the procedure by which the forum for trial, if any, shall be designated. Roberts has not directed the Court to any provision in the statute or other authority, applicable to the Manville Case, that mandates liquidation of all personal injury claims filed in a bankruptcy proceeding by trial.

Section 1411(a) of the 1984 Act states that "this chapter and title 11 do not affect any right to trial by jury that an individual has under applicable non-bankruptcy law with regard to a personal injury or wrongful death tort claim." This section, however, is not applicable with respect to cases under title 11 that were pending on July 10, 1984, the date of enactment of the 1984 Act, or the proceedings arising in or related to such cases. Pub.L. No. 98-353, § 122(b).

The Asbestos Creditors Committee has been negotiating with Manville to develop a consensual claims resolution process for the liquidation of the approximately 25,000 asbestos health claims likely to be filed against Manville. Such a process, if developed, may provide an efficient and fair means of liquidating claims, thereby obviating the need for separate trials of these numerous claims. Furthermore, an alternative means for resolution of these claims is provided by the Code. Section 502(c) provides for estimation of claims for purpose of allowance if liquidation of contingent or unliquidated claims would unduly delay the administration of the bankruptcy case. Until procedures for the resolution of the numerous asbestos health claims in a rational consolidated fashion have failed or been rejected by Roberts, this motion is premature. If and when it is determined that trial is the means by which Roberts' claims shall be liquidated, section 157(b)(5) will be applied to determine the appropriate forum for that trial.

Furthermore, denial of the motion at this time will not prejudice Roberts. Under section 108(c) of the Code, all periods for commencing or continuing an action fixed by non-bankruptcy law are tolled. Thus Roberts will not lose any claims during the time that it takes to formulate a reorganization plan. Any evidence required to prove Roberts' claims can be preserved. Finally, although he may be eager to have the claim liquidated, he would not be entitled to receive any payments on that claim until there is a distribution under the reorganization plan. The motion is denied.

SO ORDERED.


Summaries of

In re Johns Manville Corp.

United States District Court, S.D. New York
Aug 31, 1984
No. 82 B 11656-76 (S.D.N.Y. Aug. 31, 1984)
Case details for

In re Johns Manville Corp.

Case Details

Full title:IN RE JOHNS MANVILLE CORP., et al

Court:United States District Court, S.D. New York

Date published: Aug 31, 1984

Citations

No. 82 B 11656-76 (S.D.N.Y. Aug. 31, 1984)