443 B.R. 671
Bankr. E.D. Pa.2011Background
- Venom filed Chapter 11 petition, followed by Sabertooth and Green Goblin; joint administration ordered for three cases.
- Sabertooth and Green Goblin asserted breach of contract claims against Warren Simons; Sabertooth later dismissed from the suit.
- Simons assigned Proiettos' notes and Sabertooth mortgage to himself and confessed judgment against Sabertooth; Sabertooth petitioned to open the judgment in state court, which remained pending during the adversary.
- Two Standby Creditor Agreements restricted enforcement of the Proietto Notes; Sabertooth and Green Goblin were not signatories to those Standby Agreements.
- Green Goblin asserted theories that the Proietto-Green Goblin Note was fully integrated with Standby Agreements, and that Green Goblin was a third-party beneficiary; Sabertooth’s claim against Simons was eventually dismissed for lack of jurisdiction.
- Rooker-Feldman and related jurisprudence governed whether the federal court could review state-court judgments and whether Sabertooth could sustain its claims against Simons.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sabertooth's claim is within the court's subject-matter jurisdiction under Rooker-Feldman. | Sabertooth argues parallel litigation and non-judicial injury independent of the state judgment. | Simons contends Sabertooth seeks to review the state judgment, barred by Rooker-Feldman. | Sabertooth's claim dismissed for lack of subject-matter jurisdiction. |
| Whether Green Goblin is a third-party beneficiary of the Standby Agreements. | Green Goblin asserts third-party beneficiary status under Standby Agreements. | Simons asserts Green Goblin was not a party or intended beneficiary. | Green Goblin not a third-party beneficiary. |
| Whether the Proietto-Green Goblin Note was fully integrated and thus whether Paragraphs 3–4 of the Sabertooth Standby Agreement were incorporated. | Green Goblin contends the Standby Agreement provisions were incorporated into the Proietto-Green Goblin Note. | Notes did not expressly incorporate Paragraphs 3–4; only limited Standby terms may be incorporated. | Material fact issue on integration precludes summary judgment. |
| Whether Green Goblin can prevail on liability under a theory of privity/third-party beneficiary independent of Sabertooth. | Green Goblin seeks direct beneficiary status under Standby Agreements. | No express intention to benefit Green Goblin; not a beneficiary. | Green Goblin not established as a third-party beneficiary. |
Key Cases Cited
- Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159 (3d Cir.2010) (revised four-part test for Rooker-Feldman dismissal and focus on injury source and relief sought)
- Lance v. Dennis, 546 U.S. 459 (U.S. 2006) (Rooker-Feldman not applicable to federal plaintiffs not party to state proceedings)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (limits federal court review to original judgments; explains Rooker-Feldman scope)
- Hoblock v. Albany County Board of Elections, 422 F.3d 77 (2d Cir.2005) (discusses preclusion theories in Rooker-Feldman context)