Case No (SHL) (Joint Administration Pending)

Transcription

1 Pg 1 of 7 Nathan Davidovich (Pro Hac Vice Pending) Attorney at Law Davidovich Law Firm, LLC Co. Bar No So. Holly Street Denver, CO (303) (FAX) (303) nathandavidovich@talk-law.com Attorney for Movant and Creditor, Renee Rios-O Donnell UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK IN RE: Chapter 11 (Joint Administration Pending) AMR CORPORATION, et al. Debtors MOTION TO LIFT THE AUTOMATIC STAY TO ALLOW THE LITIGATION PENDING IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS TO CONTINUE Renee Rios-O Donnell ( O Donnell ), a creditor in the above-styled and numbered bankruptcy case, files this Motion to Lift the Automatic Stay to Allow O Donnell s claim against Debtor, American Airlines, Inc. ( American ), to continue, for a determination of liability, in the case presently pending in the United States District Court For The Northern District Of Illinois ( Illinois Court ), captioned, RENEE RIOS- O DONNELL v. AMERICAN AIRLINES, INC., and ASSOCIATION OF PROFESSIONAL FLIGHT ATTENDANTS ( APFA ), Case No. 10-cv Specifically, this Court should lift the automatic stay in order to permit Illinois Court to determine liability of Defendants, in this case which has now been pending since September 28, 2010, and in which most discovery has been completed.

2 Pg 2 of 7 Page No. 2 This Motion is only for the purpose of determining the liability of American, and any damages and/or reinstatement to which O Donnell would be entitled. Enforcement of any such determination against American would be the sole province of this Bankruptcy Court. The issues in the Illinois Court involve O Donnell, a former employee of American Airlines, on one hand, and Debtor, American and APFA on the other, in a hybrid action filed pursuant to the Railway Labor Act (RLA), 45 U.S.C. 151 et seq., and 29 USC 185. In the Illinois Court, O Donnell alleges violation of her rights under the RLA by virtue of a breach of the collective bargaining agreement by American and a breach of the implied duty of fair representation by APFA. INTRODUCTION O Donnell had been employed by American as a flight attendant since September 26, 1984 until her termination, which became effective on March 29, During all relevant times American and APFA were signatories to a Collective Bargaining Agreement ( CBA ), which governed certain rights and obligations of American and APFA and its flight attendant members. O Donnell was a member of APFA during her entire employment, except for times when she was working in management of American. At the time of her termination she was a member of APFA. As a member of APFA, O Donnell was required to pay union dues, and arranged for automatic payments through a bankcard. Beginning at some time in 2005 APFA stopped processing the bankcard for the dues, a fact that O Donnell did not become aware of until she was advised that she was being terminated for non-payment of dues. APFA began an Article 31 proceeding, under the CBA, to either collect the dues or require American to terminate O Donnell s employment. Both APFA and American

3 Pg 3 of 7 Page No. 3 had practices in place to give delinquent flight attendants telephonic notice by both APFA and American of the dues arrearage before terminating a flight attendant. As a result of both American and APFA failing to abide by the established practices, O Donnell did not become aware of the dues arrearage or the Article 31 proceeding until the deadline for payment had passed. Upon learning of the delinquency, she immediately tried to pay the claimed amount to APFA, who refused to accept payment. Following a grievance proceeding before the System Board of Adjustment, O Donnell s termination was upheld. She then timely filed the above hybrid action. The Illinois Court is thoroughly familiar with the legal issues in this case and has denied, in a written Memorandum and Opinion (Doc. 39 therein), dated August 24, 2011, Defendants Motions to Dismiss. The Illinois Court ruled, inter alia, at p. 13 that: Rios-O Donnell, however, has alleged facts raising a plausible inference that APFA reached this decision in an arbitrary and discriminatory fashion. By asserting that APFA inexplicably failed to comply with its own internal policies and targeted her for harsher punishment than that received by other similarly situated workers, Rios-O Donnell has stated a DFR claim. The Illinois Court further ruled, at p. 15, that despite the submission to the System Board of Adjustment, O Donnell had alleged sufficient facts to invoke the exception recognized in Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 567 (1976), which held that an exception to the relitigation bar exists in cases where the union s breach of duty seriously undermines the integrity of the arbitral process. The Illinois Court therefore ruled that System Board s decision does not preclude O Donnell from arguing that American breached the CBA when it terminated her employment.

4 Pg 4 of 7 Page No. 4 Since that time the parties in the Illinois Court have taken a number of depositions and all that remains before trial is the possibility of the deposition of O Donnell s expert economist and the filing and determination of dispositive motions. LAW AND ARGUMENT I. THE COURT SHOULD LIFT THE AUTOMATIC STAY TO ALLOW O DONNELL TO PROSECUTE HER CASE AGAINST AMERICAN IN THE ILLINOIS COURT It is well established that the filing of a bankruptcy petition under any chapter of the Bankruptcy Code initiates a broad automatic stay that prevents any attempts to enforce or collect prepetition claims or any actions that would affect property of the estate. 11 U.S.C. 362(a), and In re Carhaugh, 278 B.R. 512, 524 (10th Cir. B.A.P. 2002). If the creditor's proposed action does not fall within one of the exceptions, the creditor may move for relief from the stay under 362(d). A bankruptcy court, for cause, may terminate, annul, modify, or condition the stay. Relief from stay for cause is a discretionary determination made on a case by case basis. Pursifull v. Eakin, 814 F.2d 1501, 1506 (10th Cir. 1987). Many factors are relevant to the determination of whether to modify the stay to permit litigation to continue in another forum. See In re Curtis, 40 B.R. 795, (Bankr. D. Utah 1984), which catalogued a dozen factors to be weighed in deciding whether litigation should be permitted to continue in another forum. These are: (1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtor's insurer has assumed full responsibility for defending it; (6) whether the

5 Pg 5 of 7 Page No. 5 action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movant's success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms. In this case, six of the above factors are present, as follows: 1) The relief sought will result in a partial or complete resolution of the issues between American and O Donnell; 2) Lifting the stay in this matter will not result in any interference with the bankruptcy case; 3) Litigation in another forum will not prejudice the interests of other creditors; 4) Allowing the litigation between American and O Donnell to continue in the Illinois Court will further the interests of judicial economy and the expeditious and economical resolution of litigation. To be required to proceed in the Illinois Court against only APFA and then to present the same evidence in a separate proceeding against American, in this Court, would be a complete waste of judicial resources; (5) Other than the filing of dispositive motions and the possible expert deposition, the parties are ready for trial in the Illinois Court; and, (6) The impact of the stay on O Donnell will require her to, in essence, try the same case twice. American will not be harmed by lifting the stay, and the parties and the

6 Pg 6 of 7 Page No. 6 balance of harms heavily tilts toward O Donnell as suffering the greatest harm if the stay is not lifted. Other courts have found that cause exists for lifting the stay for the purposes of judicial economy. See, e.g., Piombo Corp. v. Castlerock Properties (In re Castlerock Properties), 781 F.2d 159, 163 (9th Cir. 1986). Courts have found that one of the factors to consider when determining whether to modify the stay is whether doing so would permit pending litigation involving the debtor to continue in a nonbankruptcy forum. See, Busch v. Busch (In re Busch), 294 B.R. 137, 141 (B.A.P. 10th Cir. 2003), citing, Blan v. Nachogdoches County Hosp. (In re Blan), 237 B.R. 737, 739 (8th Cir. BAP 1999) (finding that Congress intended such a result because "'it will often be more appropriate to permit proceedings to continue in their place of origin, when no great prejudice to the bankruptcy estate would result, in order to leave the parties to their chosen forum and to relieve the bankruptcy court from duties that may be handled elsewhere.'" (quoting H.R.Rep No , at 341 (1977); S. Rep. No , at 50 (1978)). CONCLUSION Based on the foregoing, Renee Rios-O Donnell respectfully requests that this Court enter an order lifting the automatic stay for the purpose of allowing the litigation by O Donnell against American to proceed to judgment in the Illinois Court, with the understanding that the enforcement of any judgment against American will be sought in this Bankruptcy Court. February 15, 2012.

7 Pg 7 of 7 Page No. 7 Respectfully submitted, s/nathan Davidovich Nathan Davidovich (Pro Hac Vice Pending) Davidovich Law Firm, LLC. 219 So. Holly St. Denver, CO Telephone: (303) Facsimile: (303) nathandavidovich@talk-law.com ATTORNEY FOR CREDITOR, RENEE RIOS-O DONNELL

8 shl Doc Filed 02/21/12 Entered 02/21/12 15:51:09 Proposed Order Lifting Stay Pg 1 of 1 Nathan Davidovich (Pro Hac Vice Pending) Attorney at Law Davidovich Law Firm, LLC Co. Bar No So. Holly Street Denver, CO (303) (FAX) (303) nathandavidovich@talk-law.com Attorney for Movant and Creditor, Renee Rios-O Donnell UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK IN RE: Chapter 11 (Joint Administration Pending) AMR CORPORATION, et al. Debtors ORDER GRANTING MOTION TO LIFT THE AUTOMATIC STAY TO ALLOW THE LITIGATION PENDING IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS TO CONTINUE Upon consideration of Renee Rios-O Donnell s Motion to Lift the Automatic Stay to allow the litigation pending in the United States District Court for the Northern District of Illinois to continue; and upon consideration of any and all objections and/or responses that were filed in opposition to the Motion; and notice of the Motion being adequate and sufficient; and after due deliberation and sufficient cause appearing therefor; IT IS HEREBY ORDERED THAT: 1. The Motion is granted. Dated: February, Copies furnished to: Nathan Davidovich, Esq. Stephen Karotkin, Esq. THE HONORABLE SEAN H. LANE UNITED STATES BANKRUPTCY JUDGE

9 shl Doc Filed 02/21/12 Entered 02/21/12 15:51:09 Pleading Notice of Hearing Motion to Lift Stay Pg 1 of 4 Hearing Date and Time: March 22, 2012 at 2:00 p.m. Objection Date: March 19, 2012 at 4:00 p.m. Nathan Davidovich (Pro Hac Vice Pending) Attorney at Law Davidovich Law Firm, LLC Co. Bar No So. Holly Street Denver, CO (303) (FAX) (303) nathandavidovich@talk-law.com Attorney for Movant and Creditor, Renee Rios-O Donnell UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK IN RE: Chapter 11 (Joint Administration Pending) AMR CORPORATION, et al. Debtors NOTICE OF MOTION TO LIFT THE AUTOMATIC STAY TO ALLOW THE LITIGATION PENDING IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS TO CONTINUE PLEASE TAKE NOTICE that a hearing will be held on March 22, 2012, at 2:00 p.m. (EST), or as soon thereafter as counsel can be heard before the Honorable Sean H. Lane, United States Bankruptcy Judge, at the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York to consider the Motion to Lift The Automatic Stay To Allow The Litigation Pending In The United States District Court For The Northern District Of Illinois To Continue ( Motion ). PLEASE TAKE FURTHER NOTICE that objections to the Motion, if any, must be filed on or before March 19, 2012, at 4:00 p.m. (EST) with the Court, together with a copy to the chambers of Judge Lane, and service upon (i) counsel for Renee Rios- O Donnell: Nathan Davidovich, Esq., Davidovich Law Firm, LLC, 219 So. Holly Street, Denver, CO 80246; and (ii) counsel for the debtors: Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York (Attn: Stephen Karotkin, Esq.).

10 shl Doc Filed 02/21/12 Entered 02/21/12 15:51:09 Pleading Notice of Hearing Motion to Lift Stay Pg 2 of 4 Hearing Date and Time: March 22, 2012 at 2:00 p.m. Objection Date: March 19, 2012 at 4:00 p.m. PLEASE TAKE FURTHER NOTICE that if no responses are filed and served in accordance with this Notice, the Court may grant the relief demanded by the Motion without further notice or hearing. PLEASE TAKE FURTHER NOTICE that the hearing to consider the Motion and any objections hereto may be adjourned from time to time without notice to any creditor or other party in interest, other than the announcement of the adjourned date at such hearing. February 21, 2012 Respectfully submitted, s/nathan Davidovich Nathan Davidovich (Pro Hac Vice Pending) Davidovich Law Firm, LLC. 219 So. Holly St. Denver, CO Telephone: (303) Facsimile: (303) nathandavidovich@talk-law.com ATTORNEY FOR CREDITOR, RENEE RIOS-O DONNELL -2-

11 shl Doc Filed 02/21/12 Entered 02/21/12 15:51:09 Pleading Notice of Hearing Motion to Lift Stay Pg 3 of 4 Hearing Date and Time: March 22, 2012 at 2:00 p.m. Objection Date: March 19, 2012 at 4:00 p.m. CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Motion To Lift The Automatic Stay To Allow The Litigation Pending In The United States District Court For The Northern District Of Illinois To Continue, and Notice thereof, was served on this 21st of February, 2012 via electronic filing and/or regular U.S. Mail on the following individuals: By US Mail: Honorable Sean H. Lane United States Bankruptcy Court for the Southern District of New York One Bowling Green New York, New York AMR Corporation 4333 Amon Carter Boulevard, MD 5675, Fort Worth, Texas (Attn: Kathryn Koorenny, Esq.) Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York (Attn: Stephen Karotkin, Esq.) Attorney for Debtors; The Office of the United States Trustee for the Southern District of New York 33 Whitehall Street, 21st Floor New York, New York (Attn: Brian Masumoto, Esq.); Skadden, Arps, Slate, Meagher & Flom LLP 155 North Wacker Drive Chicago, Illinois (Attn: John Wm. Butler, Jr.,Esq.), and -3-

12 shl Doc Filed 02/21/12 Entered 02/21/12 15:51:09 Pleading Notice of Hearing Motion to Lift Stay Pg 4 of 4 Hearing Date and Time: March 22, 2012 at 2:00 p.m. Objection Date: March 19, 2012 at 4:00 p.m. Four Times Square New York, New York (Attn: Jay M. Goffman, Esq.) Attorneys for the Creditors Committee By Thomas F. Hurka, Esq. Ticole T. Miller, Esq. Morgan, Lewis & Bockius LLP 77 West Wacker Drive, Fifth Floor Chicago, Illinois Attorneys for American Airlines, Inc., in the Illinois case John M. West, Esq. Jacob Karabell, Esq. Bredhoff & Kaiser, P.L.L.C th Street, N.W., Suite 1000 Washington, D.C Stephen A. Yokich, Esq. Cornfield & Feldman 25 East Washington Street, Suite 1400 Chicago, IL Attorneys for Defendant Association of Professional Flight Attendants, in the Illinois case By service via the ECF system: The parties appearing on the Master Service List prepared by Debtor. s/julie Rotenberg -4-