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Shallcross v. Path Truck Lines

January 30, 2006

WILLIAM SHALLCROSS, PLAINTIFF,
v.
PATH TRUCK LINES, DEFENDANT.



The opinion of the court was delivered by: Ambrose, Chief District Judge

OPINION and ORDER OF COURT SYNOPSIS

Plaintiff sued his former employer for a breach of a contract. The Defendant employer contends that an order from a bankruptcy court confirming a Chapter 11 Amended Plan of Reorganization renders the Complaint void ab initio. I agree. Judgment is entered in favor of the Defendant.

OPINION

Plaintiff William Shallcross ("Shallcross") alleges that he began work as a "terminal manager" for Defendant Path Truck Lines in May of 1999. See Complaint, ¶ 3. As part of his employment package, Shallcross was covered under a group health insurance policy. In the Spring of 2003, Fred Payne, apparently Shallcross's supervisor, learned that Shallcross had to undergo a heart transplant. He allegedly asked Shallcross to transfer to his wife's insurance policy so that Path Truck Lines could avoid a substantial increase in premiums. Shallcross agreed to transfer to his wife's policy in exchange for the promise of continued employment at full salary, with a reduction of hours to one half time. See Complaint, ¶ 9.

Approximately five months later, Shallcross received a document from Eileen Coleman of Transport Systems Western N.Y., Inc. ("Transport Systems"). In it, Coleman proposed that Shallcross voluntarily terminate his employment in exchange for a severance package. See Complaint, ¶ 11. Shallcross declined to do so and his employment was eventually terminated as of October 6, 2003.

Shallcross then filed suit against Path Truck Lines in the Court of Common Pleas of Beaver County, Pennsylvania. The action was timely removed to this Court on the basis of diversity jurisdiction. The Defendant has filed a Motion to Dismiss, or in the alternative, Motion for Summary Judgment. (Docket No. 3). United Sales & Leasing Co., Inc. ("United Sales") filed the Motion. United Sales argues that a bankruptcy filing in the United States Bankruptcy Court for the Western District of New York precludes Shallcross's claim from going forward. Shallcross disagrees. After careful consideration, I conclude that the bankruptcy action prevents Shallcross from maintaining this action. The Motion is granted.

STANDARD OF REVIEW*fn1

Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there is no genuine issue as to any material facts and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A fact is material when it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Rule 56 mandates the entry of judgment, after adequate time for discovery and upon motion, against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

In considering a motion for summary judgment, the Court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the nonmoving party. Anderson, 477 U.S. at 248. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex, 477 U.S. at 322. Once the moving party satisfies its burden, the burden shifts to the non- submitted matters outside the Complaint for my review, Plaintiff cannot be heard to complain that moving party, who must go beyond its pleadings, and designate specific facts by the use of affidavits, depositions, admissions, or answers to interrogatories showing that there is a genuine issue for trial. Id. at 324.

ANALYSIS

The issue before me is whether Shallcross is precluded from maintaining his suit against Path Truck Lines. To answer that question, I must determine precisely who employed Shallcross and whether suit can be maintained against that entity.

Daniel Brown, counsel for United Sales, explains that Shallcross was employed by "Transport Systems Western N.Y., Inc., which at the time served as the employer of all employees of United Sales & Leasing Co., Inc., d/b/a Path Truck Lines." see Docket No. 5-1, ¶4. United Sales is a privately owned New York corporation which operates a fleet of trucks carrying goods in interstate commerce. Id., ¶ 5. According to Brown, Transport Systems merged with United Sales in January of 2004, with United Sales being the surviving corporate entity. Id., ¶ 6.

United Sales then filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the Western District of New York, bankruptcy case no. 04-10475-B. Id, ¶ 7. On April 28, 2005, United Sales filed an Amended Plan of Reorganization. Paragraph 11.2 of the Amended Plan provides for the discharge of United Sales from claims arising prior to the filing of its Chapter 11 case upon confirmation:

11.2 Discharge of Debtor. Except as provided in the Plan or the Confirmation Order, the rights afforded under the Plan and the treatment of Claims and Interests under the Plan shall be in exchange for and in complete satisfaction, discharge and release of all Claims and modification of all Interests, including any interest accrued on Claims from the Filing date. Except as provided in the Plan or the Confirmation Order, Confirmation shall (a) discharge the Debtor from all Claims or other debts of the kind specified in Section 502(g), 502(h) or 502(I) of the Bankruptcy Code, whether or not: (I) a Proof of Claim based on such debt is filed or deemed filed pursuant to Section 501 of the Code; (ii) a Claim based on such debt is ...


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