Industrial Clearinghouse, Inc. v. Walker (In Re Coastal Plains, Inc.) , 182 F. App'x 379 ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit June 12, 2006
Charles R. Fulbruge III
Clerk
No. 05-10861
In the Matter of: COASTAL PLAINS, INC.
Debtor,
INDUSTRIAL CLEARINGHOUSE, INC.
Appellant-Cross-Appellee,
VERSUS
JACKSON WALKER,
Appellee-Cross-Appellant.
Appeals from the United States District Court
For the Northern District of Texas
3:04-CV-174
Before GARWOOD, DAVIS, and GARZA, Circuit Judges.*
PER CURIAM:**
Based on our review of the record, the briefs of the parties
and oral argument of counsel we are satisfied that neither the
*
Judge Garza concurs in the judgment only.
**
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
bankruptcy court nor the district court committed reversible error:
1. We reject appellant’s argument that the bankruptcy court
and district court erred in concluding that the malpractice case
against Jackson Walker was not abandoned when the bankruptcy case
was closed. The determination by the Texas state court that ICHI
had no standing to assert this malpractice claim because it was not
owned by appellant but rather remained in the bankruptcy proceeding
is binding on appellant and precluded it from relitigating this
issue in bankruptcy court.
We are also satisfied that the state court had jurisdiction to
make this determination. The bankruptcy court’s exclusive
jurisdiction is quite narrow. As we held in the City of Brady, TX
v. Sanders, 936 F.2d 212, 218 (5th Cir. 1991),
Thus, under section 1471, the only aspect of the
bankruptcy proceeding over which the district courts and
their bankruptcy units have exclusive jurisdiction is
“the bankruptcy petition itself.” In re Wood, 825 F.2d
90, 92 (5th Cir. 1987). In other matters arising in or
related to title 11 cases, unless the Code provides
otherwise, state courts have concurrent jurisdiction, and
bankruptcy courts are prohibited from relitigating these
matters if the state courts have already resolved them.
The res judicata effect of the state court ruling is plain on
the record and we are free to apply this doctrine even though
appellees did not assert res judicata as an affirmative defense.
See Nagle v. Lee, 807 F.2d 435, 438 (5th Cir. 1987) and American
Furniture Co. v. International Accommodations Supply, 721 F.2d 478,
482 (5th Cir. 1981).
2. The bankruptcy court did not abuse its discretion in
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refusing to reopen the bankruptcy case. Although the debtor did
not schedule the claim against Jackson Walker as an asset, before
the bankruptcy case was closed on December 12, 2000, the trustee
considered pursuing the claim against Jackson Walker and declined
to do so. Neither Coastal Plains, Inc. or Industrial
Clearinghouse, Inc. objected to the bankruptcy court’s order
closing the case as a no asset case. Appellant did not seek to
reopen the bankruptcy case until May 30, 2003 after the state court
dismissed its malpractice claim. The bankruptcy court did not
abuse its discretion in concluding that there was no cause to
reopen the proceeding where “a purchaser of assets that were once
estate assets is not happy with the trustee’s decision regarding
the administration of one of the estate’s alleged assets.”
AFFIRMED.
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