Opinion
CIVIL ACTION NO. 04-302 SECTION "R" (5), Adversary Proceeding No. 03-01065 Section "B"
March 29, 2004
ORDER AND REASONS
Plaintiff Babcock Wilcox Company seeks leave to file an interlocutory appeal of the Bankruptcy Court's order, which denied BW's motion for summary judgment against defendant Southern Indiana Gas and Electric Company. For the following reasons, the Court denies BW's motion.
I. BACKGROUND
In February 2000, BW filed voluntary petitions for relief in this Court under Chapter 11 of the Bankruptcy Code. In July 2001, defendant SIGECO timely filed an Asbestos Derivative proof of claim and an Asbestos Property Damage proof of claim in BW's bankruptcy proceeding. This appeal arises out of SIGECO's property damage claim, which seeks damages for, inter alia, damage caused by asbestos in boiler systems manufactured or sold by BW to SIGECO. BW filed a motion to convert SIGECO's property damage claim to an adversary proceeding, which the bankruptcy judge granted in March 2003.
In August 2003, BW filed a motion for summary judgment against SIGECO in the bankruptcy court. BW argued that the Indiana construction statute of repose applied to SIGECO's claim and barred it because SIGECO failed to file its claim within ten years after the installation of the boilers. See IND. CODE § 32-30-1-5 (providing that a claimant has ten years after substantial completion of construction in which to sue).
In its response to BW's motion for summary judgment, SIGECO argued that Indiana's product liability statute of repose, not the construction statute of repose, applied to its claim. See IND. CODE § 34-20-3-1 (providing that a product liability action must be brought within two years of accrual of the cause of action or ten years after delivery of the product). SIGECO further argued that it met a special provision of that statute which provides that the ten-year bar does not apply to certain actions. See IND. CODE § 34-20-3-2(a) (d)(1)-(2).
In December 2003, the bankruptcy judge denied BW's motion for summary judgment. The bankruptcy judge held that the product liability statute of repose, and not the construction statute of repose, applied to SIGECO's claim and that SIGECO had satisfied the provision that allows the claimant to bring suit two years after accrual of the cause of action without regard to the ten-year bar.
BW now seeks leave of this Court to file an interlocutory appeal in accordance with Bankruptcy Rules 8001 and 8003 and 28 U.S.C. § 158(a)(3). BW seeks to appeal the following issues:
(1) whether the bankruptcy court erred when it held that the Indiana product liability statute of repose applied to SIGECO's property damage claim instead of the construction statute of repose; and
(2) if the Indiana products liability statute of repose applies, whether the bankruptcy court erred when it failed to hold that the statute barred the SIGECO property damage claim.
For the following reasons, the Court denies BW's leave to appeal.
II. DISCUSSION
A. LEGAL STANDARD
Title 28, United States Code, Section 158(a) governs the jurisdiction of this Court over an appeal from a bankruptcy court's order. This section provides that a district court has jurisdiction "to hear appeals from final judgments, orders, and decrees, and with leave of the court, from interlocutory orders and decrees, of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of . . . title [28]." 28 U.S.C. § 158(a). To determine whether to allow an interlocutory appeal, district courts in this circuit apply the following standard under 28 U.S.C. § 1292(b): (1) a controlling issue of law must be present; (2) the question must be one where there is substantial ground for difference of opinion; and (3) an immediate appeal must materially advance the ultimate termination of the litigation. See Matter of Ichinose, 946 F.2d 1169, 1177 (5th Cir. 1991); see also In re Carden, 1997 WL 361898 (E.D. La. 1997). A court should grant an interlocutory appeal if a denial would result in wasted litigation and expense. See In re NSB Film Corp., 167 B.R. 176, 180 (Bankr. 9th Cir. 1994). However, piecemeal appeals that serve only to extend the litigation are discouraged, especially when weighed against the interests of judicial economy and interests of the parties in obtaining an overall conclusion of the proceeding. See Babin v. Hattier, 1994 WL 43810 (E.D. La. 1994). Thus, courts will hear an interlocutory appeal only under circumstances that justify overriding the general policy of not allowing such appeals. See Powers v. Montgomery, 1998 WL 159944 (N.D. Tex. 1998); see also Klinghoffer v. S.N.C. Anchille Lauro, 921 F.2d 21, 25 (2d Cir.* 1990).
As with interlocutory appeals from district courts, bankruptcy interlocutory appeals are generally not favored, because they disrupt the bankruptcy proceedings. See In re Cross, 666 F.2d 873, 878 (5th Cir. Unit B 1982); In re Executive Officer Centers, Inc., 75 B.R. 60 (E.D. La. 1987). In order for the court to hear such an appeal, the would-be appellant must present a precise statement of the controlling issue of law, in conjunction with a "brief argument showing the grounds for the asserted difference of opinion and the way in which the allowance of the petition would `materially advance the ultimate termination of the litigation'". See Clark-Dietz and Associates-Eng'r v. Basic Constr. Comp., 702 F.2d 67, 69 (5th Cir. 1983) ( quoting In re Heddendorf, 263 F.2d 887, 889 (1st Cir. 1959)) .
B. ANALYSIS
After consideration of the three criteria for interlocutory appeals under 28 U.S.C. § 1292, the Court finds no reason to grant leave to appeal this interlocutory order. With regard to the two legal issues, the Court finds that BW has not demonstrated that there is a controlling question of law over which there exists a substantial difference of opinion. Difference of opinion refers to an unsettled state of law or judicial opinion, not mere discontent by the appealing party. * See In re Harken, No. Civ. A. 98-3820, 1999 WL 64955, at *2 (E.D. La. 1999). Judge Brown reached his decision on the first issue by distinguishing the case on which BW relies on the facts. This does not amount to an unsettled state of the law. See, e.g., Harken, 1999 WL 64955, at *2 (finding that factual issues do not warrant interlocutory appeal). In addition, with regard to BW's second issue, the bankruptcy judge applied the law of Indiana as determined by the Indiana Supreme Court in Alliedsignal, Inc. v. Ott, 785 N.E.2d 1068 (Ind. 2003). Contrary to BW's assertion, the Indiana Supreme Court treated the "and" in subsections (d)(1)-(2) that it argues the bankruptcy court disregarded, see id. at 1077, and BW points to no other substantial difference of opinion concerning this provision.
Further, the Court does not find that a grant of leave to appeal will materially advance the ultimate determination of this litigation but finds that it could delay the bankruptcy proceedings. Judicial economy, efficiency, and the interests of the parties in obtaining an overall conclusion of the bankruptcy proceeding weigh in favor of allowing the bankruptcy court to proceed and to complete the case in its entirety.
III. CONCLUSION
For the foregoing reasons, the Court denies BW's motion for leave to appeal.