Davidson v. AMR Corp. (In re AMR Corp.)

566 B.R. 657

In the MATTER OF AMR CORPORATION

Stephen C. Davidson, Appellant,

v.AMR Corporation, et al., Appellee.

16–CV–1970 (VEC)

United States District Court, S.D. New York.

Signed March 9, 2017

Stephen C. Davidson, Miami, FL, pro se.

Alfredo Rey Perez, Weil, Gotshal & Manges LLP, Houston, TX, Stephen Karotkin, Weil, Gotshal & Manges LLP, New York, NY, Stephen Andrew Youngman, Weil, Gotshal & Manges LLP, Dallas, TX, for Appellee.

MEMORANDUM OPINION & ORDER

VALERIE CAPRONI, United States District Judge:

Appellant Stephen Davidson ("Davidson"), proceeding pro se , appeals from three orders of the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"): (1) denying Davidson's proof of claim in Appellee AMR Corporation's ("AMR") Chapter 11 case; and (2) denying two motions for reconsideration under Section 502(j) of the Bankruptcy Code. Davidson's appeal of the Bankruptcy Court's orders denying his proof of claim and first motion for reconsideration is DISMISSED; Davidson's appeal of the Bankruptcy Court's order denying his second motion for reconsideration is DENIED, and that Bankruptcy Court order is AFFIRMED.

BACKGROUND

Davidson, a former American Airlines ("AA") pilot, is attempting to take a fourth bite at the apple on various claims against his former employer. Davidson unsuccessfully sought relief in Florida state court for purported civil rights violations and tort claims. Then Davidson commenced unsuccessful grievance procedures with AA. After those losses, Davidson filed a proof of claim for over $16 million in AMR's bankruptcy proceeding. The Bankruptcy Court denied not only that proof of claim but two motions to reconsider. This appeal followed.

A. The Florida State Court Action¹

In 2002, Davidson, represented by counsel, sued AA in Florida State Court in Davidson v. American Airlines, Inc. , No. 02–01208–CA–20. CD 23 ("Debtors' Supplement"), Ex. C ("Complaint"). That complaint was subsequently amended to assert four causes of action—race discrimination and retaliation under the Florida Civil Rights Act of 1992, Fla. Stat. 760.01 ("FCRA"), negligent hiring and supervision, and vicarious liability for alleged physical assaults by a training instructor. Debtors' Supplement, Ex. D ("Amended Complaint"). The alleged physical assaults included: (1) a kick during a captain simulator training ("the kicking incident"); and (2) a pat on the shoulder ("shoulder pat incident"). Id. ¶¶ 46, 56; CD 29 ("Order"), at 2–3 & n.1–5. He also alleged generally other acts of verbal harassment and physical intimidation by AA flight instructors. Amended Complaint ¶¶ 47, 57.

AA moved for summary judgment, which the Florida State Court granted on three of the four claims. Order at 3. The case proceeded to trial, and the jury found in favor of AA on the remaining retaliation claim. Id. at 3–4. Davidson appealed to the Third District Court of Appeal for the State of Florida, which affirmed the lower court's decision in Davidson v. Am. Airlines, Inc. , Nos. 3d07–2063, 3D07–1901, 2D08–234, 2009 WL 2447928 (Fla. 3d Dist. Ct. App. Apr. 29, 2009).² Id. at 4.

B. The Grievance Procedures

Following his loss in state court, Davidson filed a grievance pursuant to a collective bargaining agreement between AA and the Allied Pilots Association ("APA"), the union representing AA pilots. Debtors' Supplement, Ex. K. In the grievance, Davidson sought retroactive long-term disability benefits covering the period from July 8, 1999, through June 15, 2007, for an injury that allegedly stemmed from the kicking incident years earlier. Debtors' Supplement ¶ 12; id. Ex. A ("Proof of Claim"),³ Grievance Appeal Hearing Tr. 9:4–11. A hearing was held before an AA managing director, and Davidson's grievance was denied. Debtors' Supplement, Ex. J. The union submitted the grievance to the Pre–Arbitration Conference for further consideration. Debtors' Supplement, Ex. K.

While Davidson's grievance was pending further consideration, the Bankruptcy Court approved a new collective bargaining agreement and settlement letter between APA and AA. Bankr. Dkt. 5800 ("Settlement Letter Order").⁴ The settlement letter stated, in part:

In full and complete satisfaction of any and all claims APA has or might arguably have , on behalf of itself or the pilots represented by APA ... the APA Settlement Consideration fully, finally, and completely extinguishes any and all claims, interests, causes or demands (including any and all pending grievances, excluding those grievances identified in Exhibit 1) that APA has or might arguably have, on behalf of itself or the pilots represented by APA ... against the Debtors arising prior to the Effective Date of this Letter of Agreement as defined below.

Debtors' Supplement, Ex. L ("Settlement Letter") § 1 (emphasis added). Davidson's grievance was not included in Exhibit 1 of the Settlement Letter. Settlement Letter at 7. Accordingly, per the terms of the Settlement Letter, the APA and AA agreed to extinguish Davidson's pending grievance as part of the negotiated global settlement agreement.

C. The Bankruptcy Court Proceedings

On November 29, 2011, AMR and its related debtor entities, including AA, filed a Chapter 11 bankruptcy petition. Bankr. Dkt. 1. On July 12, 2012, Davidson filed a proof of claim for more than $16 million. Proof of Claim at 5. The proof of claim included a two page letter accompanied by 190 pages of documents. See id.⁵

The Appellees filed omnibus objections seeking to expunge Davidson's proof of claim. Bankr. Dkt. 12048; Order at 5. The Bankruptcy Court held a hearing during which Davidson explained that the kicking and shoulder pat incidents, along with another incident involving a firm handshake that occurred between the kicking and shoulder pat incidents ("handshake incident"), formed the basis for his proof of claim. Bankr. Dkt. 12371 ("Hearing Tr.") at 36:18–42:4.⁶

On January 28, 2015, the Bankruptcy Court expunged Davidson's proof of claim, finding that it was barred by res judicata on account of his prior Florida state court action. Order at 6–11. The Bankruptcy Court also denied Davidson's proof of claim to the extent that any portion of it stemmed from the grievance he filed with AA, given that Davidson's representative, the APA, had settled that matter as part of a Court-approved global settlement agreement with AA. Id. at 9 n.16.

Davidson made a motion to reconsider the denial of his proof of claim, which was received by the Bankruptcy Court on February 13, 2015. CD 31. On July 10, 2015, the Bankruptcy Court denied the motion. CD 33. Over three months later, Davidson filed a second motion to reconsider. CD 35. On February 18, 2016, the Bankruptcy Court denied Davidson's second motion to reconsider, CD 37, and this appeal followed on February 29, 2016, Dkt. 1.

DISCUSSION

District courts have appellate jurisdiction over bankruptcy court rulings under 28 U.S.C. § 158(a)(1). "A district court reviews a bankruptcy court's findings of fact for clear error and reviews its legal conclusions de novo. " Green Tree Servicing, LLC v. Wilson (In re Wilson ), 532 B.R. 486, 489 (S.D.N.Y. 2015) (citing Overbaugh v. Household Bank, N.A. (In re Overbaugh ), 559 F.3d 125, 129 (2d Cir. 2009) (per curiam)).

Davidson appears to present two issues on appeal.⁷ The first is whether the Bankruptcy Court abused its discretion in denying Davidson's motions for reconsideration. The second is whether the Bankruptcy Court's order disallowing his proof of claim was properly denied on the basis of res judicata. Because the appeal was not timely filed as to the denial of the proof of claim and the first motion for reconsideration, this Court lacks jurisdiction over the appeal from those orders. As to the second motion for reconsideration, the Court has jurisdiction over the appeal, but the appeal is without merit.

I. Davidson Failed to Appeal Timely the Bankruptcy Court's Orders Expunging His Proof of Claim and Denying First Motion for Reconsideration

Under Bankruptcy Rule 8002(a) an appeal from a judgment or order not made within fourteen days after entry of that judgment or order may not be considered; this time limit is jurisdictional. Fed. R. Bankr. P. 8002(a) ; see In re Indu Craft, Inc. , 749 F.3d 107, 115 (2d Cir. 2014) (citing In re Siemon , 421 F.3d 167, 169 (2d Cir. 2005) (per curiam)). Bankruptcy Rule 8002(d), however, allows a party to move for an extension, either within fourteen days after entry of the judgment or order being appealed or within twenty-one days after that time if the party shows excusable neglect. Fed. R. Bankr. P. 8002(d)(1)(B). Excusable neglect is a context-specific inquiry that considers all relevant circumstances including: "(1) the danger of prejudice to the [non-movant]; (2) the length of the delay and its potential impact on judicial proceedings; (3) the reason for the delay, including whether it was within the reasonable control of the movant; and (4) whether the movant acted in good faith." Silivanch v. Celebrity Cruises, Inc. , 333 F.3d 355, 366 (2d Cir. 2003) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship , 507 U.S. 380, 385, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) ).

In addition, if a party timely files a motion to alter or amend a judgment under Rule 9023 (which incorporates Federal Rule of Civil Procedure 59 ) or for relief under Rule 9024 (which incorporates Federal Rule of Civil Procedure 60 ), then the time to file a notice of appeal is tolled until the bankruptcy court enters an order resolving the motion. Fed. R. Bank. P. 8002(b)(1). A motion to alter or amend a judgment and a motion for relief must both be filed no later than fourteen days after entry of judgment in order to toll the time to appeal. Fed. R. Bankr. P. 9023 ; Fed. R. Bankr. P. 8002(b)(1). The Bankruptcy Rules also provide an absolute time limit on extensions: "No extension of time may exceed 21 days after the time prescribed by this rule, or 14 days after the order granting the motion...