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688 F.Supp.3d 558
S.D. Tex.
2023
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Background

  • Gerald W. Dorrion worked for United Refining in the early 1960s and was exposed to asbestos; he was diagnosed with mesothelioma in 2016 and died in 2017.
  • Executor Robert W. Dorrion filed a wrongful-death suit against United Refining in Pennsylvania state court in 2018.
  • United Refining filed Chapter 11 in 1983; its sixth amended reorganization plan was confirmed in 1988 and discharged "all Claims arising before the Confirmation Date." The confirmation order stated notice was proper.
  • The original bankruptcy record was largely destroyed in 2020; only the plan, confirmation order, and a few post-confirmation orders remain.
  • United Refining reopened its bankruptcy case in 2020 and the bankruptcy court held the wrongful-death claim was a prepetition, dischargeable claim and enjoined further litigation; the Executor appealed.
  • The district court affirmed but issued a limited remand to allow the bankruptcy court to decide whether the Executor forfeited an argument that the plan’s narrower definition of "Claim" excluded his suit, and if not forfeited, to resolve that argument.

Issues

Issue Plaintiff's Argument (Dorrion) Defendant's Argument (United Refining) Held
Whether the wrongful-death claim existed prepetition No—claim accrued only when mesothelioma diagnosed decades after 1983 Yes—exposure and employer relationship gave rise to a contingent prepetition claim Claim existed prepetition (affirmed), under Fifth Circuit prepetition-relationship/contingent-claim approach
Whether Decedent/estate received adequate notice Notice was insufficient; due process not satisfied Confirmation order and available record show notice was adequate Adequate notice upheld; confirmation order's finding given preclusive weight
Whether the confirmed plan discharged the claim Plan did not discharge because claim was postpetition or otherwise not covered Plan and confirmation order discharged prepetition claims after proper notice Discharge enforced; claim barred under plan and confirmation order
Whether bankruptcy court abused discretion reopening the closed case Reopening was futile and an abuse of discretion Reopening permissible to adjudicate enforcement of the discharge Reopening was not an abuse of discretion (affirmed)

Key Cases Cited

  • In re Placid Oil Co., 753 F.3d 151 (5th Cir. 2014) (discusses notice and known/unknown creditor standard)
  • Wright v. Owens Corning, 679 F.3d 101 (3d Cir. 2012) (addresses retroactive application and contemplation tests)
  • Matter of M. Frenville Co., Inc., 744 F.2d 332 (3d Cir. 1984) (accrual-test reasoning in bankruptcy claims)
  • Grady v. A.H. Robins Co., 839 F.2d 198 (4th Cir. 1988) (conduct-test: prepetition conduct can give rise to contingent claim)
  • Lemelle v. Universal Mfg. Group, 18 F.3d 1268 (5th Cir. 1994) (prepetition-relationship test and identifying potential victims)
  • In re Crystal Oil Co., 158 F.3d 291 (5th Cir. 1998) (declines to adopt fair-contemplation test)
  • Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due-process standard for notice)
  • Salard v. Salard, [citation="452 F. App'x 588"] (5th Cir. 2011) (actual knowledge renders a claim dischargeable despite deficient notice)
  • In re Crocker, 941 F.3d 206 (5th Cir. 2019) (bankruptcy court authority to enforce discharge)
  • In re Case, 937 F.2d 1014 (5th Cir. 1991) (broad discretion to reopen closed bankruptcy cases)
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Case Details

Case Name: Dorrion
Court Name: District Court, S.D. Texas
Date Published: Aug 23, 2023
Citations: 688 F.Supp.3d 558; 4:21-cv-00355
Docket Number: 4:21-cv-00355
Court Abbreviation: S.D. Tex.
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    Dorrion, 688 F.Supp.3d 558