filed: May 21, 1986.
ADISON ACIE, JOHN HANKINS, RICHARD BACHMANN, BERNARD CURRAN, FRANK SARI, DENNIS SANDUSKY, GARY HERRING, THOMAS JAGGER, JULIUS KALKBRENNER, JAMES CALVIN, JOSEPH LINZ, ROBERT ZAVAL, JAMES ROLLINSON, LESTER GORMAN, JOSEPH GERBER, KENT SPRESSER, ANDREA HALLAS, KATHLEEN RYAN, BONNIE FERCHAK, FRANK OSHINSKY, DONALD SCHILACCI, JOHN BUSATO, ALVIN KNOX, KENNETH BUSATO, MICHAEL BATEMAN, JAMES BENSON, ROBERT LEYLAND, JAY HANKINS, MICHAEL TOTH, PETER KISELICH, PATRICK SANTONE, JOHN HOUSEMAN, RAYMOND MAMRAK, DONALD KOLENC, CECIL ALLEN, AMIL FURAR, EDWARD RAYMOND, SHERMAN WOOD, PETER PENICK, FRED PRYOR, RONALD OLSCHON, JOE STEFANKO, PAUL GROTT, CHARLES ZAKEN, KENNETH POLANDO, LUIGI FILOTEI, SYLVESTER FERENZ, GEORGE SHIVAK, LEONARD BACKSTROM, GEORGE ANDERSON, JOHN RYMAROWICZ, SABATINO NERI, JACK LINDSEY, PATRICK MCGHEN, PAUL DOENGES, JOHN STEFL, JOSEPH ANDREOLI, AL WHITE, JOHN HOUSEMAN, GERALD NICHOLSON, NICHOLAS MITCHELL, AMIL FURAR, SHERMAN WOODS, JAMES BEERE, RUSSELL BACKSTROM, JACK FARLOW, ALBERT JUSTICK, WILLIAM WALMSLEY, HENRY BATEMAN, EDWARD ZUKOW, MIKE SIDUN, WALT SROKA, JOE BUSATO, STANLEY MINKUS, CLARENCE BRAY, RONALD NOVICH, WILLIAM SPOONHOWARD, JOHN WOOD, FRANK TOTH, PETER LIPOSCHOK, NICHOLAS YACKOVICH, GERALD MCCANN, MARTIN FLESIK, PHILLIP MIKOLAY, FRED KING, JOSEPH HUGHES, APPELLANTS,
HERMAN BRAUNSTEIN AND STAHL GEAR COMPANY, APPELLEES
Appeal from the Order of November 1, 1984, in the Court of Common Pleas of Allegheny County, Civil No. GD 84-15808.
Peter B. Skeel, Pittsburgh, for appellants.
David F. Luvara, Pittsburgh, for appellees.
Brosky, Olszewski and Popovich,*fn* JJ.
[ 353 Pa. Super. Page 200]
This matter comes before us on appeal from an order of the lower court sustaining appellees' preliminary objections. On August 31, 1984, appellants filed a cause of action against appellees for breach of an oral agreement and/or tortious deceit. It is alleged that appellee Braunstein agreed to purchase the assets of McKeesport Steel Castings Company, in his own right or as an agent of appellee Stahl Gear Company, pursuant to Chapter 11 of the United States
[ 353 Pa. Super. Page 201]
Bankruptcy Code. Appellants, former employees of McKeesport, allege that as part of the purchase order, appellees agreed to pay appellants' wages from the accounts receivable generated by their labor. The sale was consummated on August 31, 1984, following the bankruptcy court's approval of appellee's purchase offer. Because Braunstein later refused to honor this obligation, appellants commenced an action alleging breach of an oral contract and tortious deceit, which formed the basis of this appeal. In response to a motion by appellee Braunstein, the lower court, Judge Farino presiding, dismissed the action claiming lack of subject matter jurisdiction. This Court also struck the complaint against appellee Stahl due to appellants' failure of service of process on this party and deferred jurisdiction to the United States Bankruptcy Court for the Western District of Pennsylvania. Consequently, appellants now claim that although the proposed causes of action may be incidentally related to the bankruptcy proceedings, the lower court nevertheless should have decided these issues since they have "unlimited jurisdiction" under 42 Pa.C.S.A. Sec. 931(a). We disagree.
It is well settled that in enacting the statute giving federal district courts original, but not exclusive, jurisdiction to hear all civil proceedings arising under Title 11 of the Bankruptcy Act, Congress intended to grant broad jurisdiction to district courts to hear all litigation having any significant connection with the pending bankruptcy even if state law questions were involved. Ram Construction Company, Inc. v. Port Authority of Allegheny County, 49 B.R. 363 (D.C.Pa.1985). See 28 U.S.C. Sec. 1334(b) (1984).*fn1 It is significant that, for purposes of federal court
[ 353 Pa. Super. Page 202]
jurisdiction, the definition of a proceeding as "related to" a bankruptcy matter depends upon "the character of the claims asserted and the relationship of those claims to the bankruptcy proceeding, rather than with the status of the parties as debtors or creditors." (Citations omitted.) Bobroff v. Continental Bank, 43 B.R. 746, 751, aff'd., 766 F.2d 797 (3rd Cir.1985).
After carefully reviewing appellants' original complaint filed in the Court of Common Pleas of Allegheny County, we note that as part of the bankruptcy court proceedings, that court considered "appellees' willingness to pay appellants' wages from the accounts receivable generated by their labor" in approving appellees' offer to purchase. (Count I, paragraph 10, p.2.) Since this agreement apparently affected the administration of the estate, we feel that the resolution of this matter properly belongs in the United States Bankruptcy Court for the Western District of Pennsylvania.
*fn* Popovich, J., recused himself following argument.