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In re Highway Truck Drivers & Helpers Local Union 107

filed: October 30, 1989.

IN RE: HIGHWAY TRUCK DRIVERS & HELPERS LOCAL UNION # 107, RONALD AND FRANCES GAJKOWSKI, ET AL., APPELLANTS


Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Nos. 88-3650 & 88-4037.

Mansmann, Nygaard and Aldisert, Circuit Judges.

Author: Mansmann

Opinion OF THE COURT

MANSMANN, Circuit Judge

Ronald and Frances Gajkowski, William and Jean Abate and Robert Schipske ("Gajkowski creditors"), appeal from the order of the district court which affirmed the order of the bankruptcy court granting Highway Truck Drivers and Helpers Local Union No. 107 ("Debtor 107") relief from the automatic stay provisions of 11 U.S.C. § 362(a).*fn1 The Gajkowski creditors maintain that the full faith and credit provision under 28 U.S.C. § 1738 limited the bankruptcy court's discretion to grant prospective relief from the automatic stay. We need not consider the propriety of the bankruptcy court's decision because, for the reasons stated below, we hold that the matter has been mooted by the intervening judgment of the Pennsylvania Supreme Court.

I.

The Gajkowski creditors brought suit in the Court of Common Pleas of Bucks County, Pennsylvania, against the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (IBT) and its Local 107, (Debtor 107), for damages sustained in a shooting incident on January 25, 1980, at a plant at which members of Local 107 were on strike and picketing. In March, 1984, the jury returned a verdict in favor of the Gajkowski creditors and against both defendants for approximately $1.3 million.

The verdict was initially upheld by an en banc panel of the Bucks County Common Pleas Court. However, the Superior Court of Pennsylvania reversed. On August 31, 1987, the Supreme Court of Pennsylvania affirmed the Superior Court's order to the extent that it exonerated IBT, and reversed the order relieving Debtor 107 of liability. See Gajkowski v. Intern. Broth. of Teamsters, 515 Pa. 516, 530 A.2d 853 (1987).

On October 16, 1987, Debtor 107 filed a voluntary petition for bankruptcy under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Eastern District of Pennsylvania. A Suggestion of Bankruptcy was also filed by Debtor 107 with the Prothonotary of the Pennsylvania Supreme Court.

After the denial of its application for reargument, Debtor 107 filed an "Application for Reconsideration Nunc Pro Tunc of the Denial of Local 107's Application for Reargument" in the Pennsylvania Supreme Court. Reargument was granted on November 18, 1987, and the matter listed for the April, 1988 session of Court in Philadelphia.

Debtor 107 then returned to the bankruptcy court and filed a motion for relief nunc pro tunc from the automatic stay provisions of 11 U.S.C. § 362(a) which were invoked simultaneously with the filing of Debtor 107's petition for bankruptcy under Chapter 11.*fn2 On March 29, 1988, the bankruptcy court issued a ruling that Debtor 107 was relieved from the automatic stay prospectively in order for it to petition the Pennsylvania Supreme Court for reargument. However, the court determined that Debtor 107's prior application for reconsideration was filed in violation of § 362(a), and it therefore refused to countenance those actions of Debtor 107 which occurred prior to the entry of this order.*fn3 Accordingly, Debtor 107 filed an amended application for reconsideration nunc pro tunc, which the Pennsylvania Supreme Court granted on April 7, 1988.

Also on April 7, 1988, Debtor 107 filed a timely appeal to the district court from that portion of the bankruptcy court's order granting the Gajkowski creditors relief from the automatic stay. On April 21, 1988, the Gajkowski creditors filed a notice of cross-appeal from the entire March 29th order.

While these appeals were pending, the Pennsylvania Supreme Court reversed its prior decision and affirmed the decision of the Pennsylvania Superior Court in all respects, thus relieving Debtor 107 of liability for the personal injuries of the Gajkowski creditors. See Gajkowski v. Intern. Broth. of Teamsters, 519 Pa. 320, 548 A.2d 533 (1988). The Gajkowski creditors were denied reargument in the Pennsylvania Supreme Court. They then filed a Petition for Writ of Certiorari in the United States Supreme Court which was denied on April 17, 1989.

Meanwhile, by order dated April 7, 1989, the district court affirmed the bankruptcy court's decision to lift the automatic stay. This appeal followed.*fn4 Since the district court sat as an appellate court in its review of the bankruptcy court proceedings, 28 U.S.C. § 158(a), our review of the district court's decision is plenary. Universal Minerals, Inc. v. C.A. Hughes & ...


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