UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
CANNONSBURG ENVIRONMENTAL ASSOCIATES, LTD.
DEBTOR CASE NO. 92-10146
CANNONSBURG ENVIRONMENTAL ASSOCIATES, LTD. PLAINTIFF
VS. ADV. NO. 92-1018
COOKSEY BROTHERS DISPOSAL COMPANY, INC. DEFENDANT
This matter is before the Court on the defendant's Motion to Dismiss Complaint filed herein on July 29, 1992. The plaintiff had filed its Complaint herein on June 19, 1992, and its Amended Complaint on July 1, 1992. The defendant contends that the Complaint should be dismissed because its subject matter is the same as that underlying an adversary proceeding filed by the defendant, Cooksey Brothers Disposal Company, Inc., et al. v. Cannonsburg Environmental Associates, Ltd., et al., Adv. No. 92-1011.
The defendant further contends that the only new allegation contained in this action is the plaintiff's objection to the defendant's proof of claim, and that such objection should have been brought in the context of the bankruptcy case pursuant to FRBP 3007 or as a compulsory counterclaim in Adv. No. 92-1011. This Court has jurisdiction of this matter pursuant to 28 U.S.C.'1334(b); it is a core proceeding pursuant to 28 U.S.C. '157(b)(2)(B).
The plaintiff's Complaint is concerned with a May 6, 1991 contract between the plaintiff and the defendant ("the Management Agreement"). The Complaint alleges that pursuant to the terms of the Management Agreement, the plaintiff was to pay the defendant certain royalties, and that those royalties were being calculated in a manner and at a rate inconsistent with the Management Agreement. The Complaint further alleges that the defendant has filed an Amended Secured Proof of Claim for amounts which the plaintiff disputes.
The Complaint asks for judgment disallowing the defendant's claim, determining that the plaintiff has not defaulted under the Management Agreement, that the plaintiff can assume the Management Agreement pursuant to 11 U.S.C.'365, and ordering that the Management Agreement may be so assumed. As the defendant points out in its Motion to Dismiss, the subject matter of the within Complaint, except for the objection to claim, is contained within the Complaint filed in Adversary Number 92-1011, Cooksey Brothers Disposal Company, Inc., et al. v. Cannonsburg Environmental Associates, Ltd. et al.
The Complaint in Adversary Number 92-1011 addresses default in Counts V and VII and assumption of the contract in Counts VIII, X, and XI. The defendant herein asserts that any objection to the proof of claim should be made pursuant to FRBP 3007, or if the plaintiff herein wishes to object to the proof of claim with a demand for relief pursuant to FRBP 7001, then the plaintiff should file a compulsory counterclaim, presumably in Adversary Number 92-1011. The defendant finally asserts that on account of all of the foregoing, the Complaint filed herein is "a bad faith filing" and asks for attorney fees. (See Motion to Dismiss Complaint, p. 4).
The defendant has not cited any authority for its position that the filing of the Complaint herein is a bad faith filing meriting dismissal, nor has the Court been able to discover any such authority. Further, this matter and Adversary Number 92-1011 are now scheduled to be tried together in this Court on December 29, 1992. Judicial economy will be served, as issues that are the same or similar in both cases will be resolved in one trial. For these reasons, it is the opinion of this Court that the defendant's Motion to Dismiss Complaint should be overruled. An order in conformity with this opinion will be entered separately. Dated:
By the Court -
John O. Morgan, Jr., Esq.
James H. Moore, III, Esq.
Charles I. Jones, Jr., Esq.
Carl Breeding, Esq., Trustee