Bankruptcy: Reorganization Plan; Contractual Liability Bankruptcy: Discharging of Claims; Notice of Proceedings Court Jurisdiction, Procedure and Review: Bankruptcy Court

摘要

The Van Sickles own a royalty interest in oil and gas produced by wells operated by the appellees (interest holders). Interest holders make up Missouri Breaks, LLC, a corporation established under the bankruptcy court's reorganization plan after another corporation, Athens/Alpha, files for bankruptcy protection. Pursuant to the plan, Athens/Alpha's interest is transferred to Missouri Breaks. Missouri Breaks becomes the operator of the wells and begins paying royalty to the Van Sickles. Under the reorganization plan, all allowed claims are to be paid. A creditor has to file a claim either in the bankruptcy proceeding or under the plan or be otherwise included in the scheduled claims, and the order of the court has to allow the claim. The Van Sickles are not listed as scheduled creditors and do not file a claim. They assert that they had no notice of the bankruptcy proceedings. The Van Sickles appeal the district court's dismissal of their claims for breach of contract for failure to pay both pre-bankruptcy and post-bankruptcy royalties and their claims for conversion and tortious interference. Held: affirmed in part and reversed in part. The district court correctly granted summary judgment for the claim of breach of contract for failure to pay post-bankruptcy royalties and the claims for conversion and tortious interference. The Van Sickles base their breach of contract argument on the contention that they have a secured claim that should be paid under the bankruptcy reorganization plan. The interest of the Van Sickles is not an "allowed secured claim" under the reorganization plan. Under the plan, while an "allowed secured claim" is one that "is secured by a valid Lien . . . on property of the Debtor which is not void or voidable under any state or federal law . . .," Van Sickles' assertion of a statutory lien under North Dakota law is not an "allowed claim" as defined by the reorganization plan because the claim must have been "allowed by mis Plan or a Final Order of the Bankruptcy Court or. a claim timely filed with the Clerk of Court . . . or. . . fixed by the Code or by a final order of the Bankruptcy Court . . ." Because the Van Sickles did not file a claim with the court, their claim is not included in the plan or the final order of the court. Thus, they are not entitled to payment under the plan. Thus there has been no breach of contract under the contractual terms of the plan. However, the Van Sickles may have a valid claim for pre-confirmation royalties "because their debts may not have been discharged in the bankruptcy proceedings" due to lack of notice of the proceedings. The claim of a creditor who does not receive notice of bankruptcy proceedings is not discharged by those proceedings. The district court erred in dismissing the claim of breach of contract for failure to pay pre-bankruptcy royalties, and by finding it did not have jurisdiction to hear the claim. Although the bankruptcy court has original jurisdiction over this claim, it does not have exclusive jurisdiction of related claims. State and federal courts have concurrent jurisdiction to decide whether a creditor's claim has been discharged by determining whether the creditor had notice of the proceedings. The district court did not make any findings regarding notice to the Van Sickles. The question of whether Van Sickles had notice of the bankruptcy filing is one ofaterial fact and not appropriate for summary judgment.