Tempur-Pedic International, Inc. v. Waste to Charity, Inc. et al

Filing 241

ORDER denying 236 Motion to Reopen Case. This matter remains stayed pending the resolution of the bankruptcy proceedings. Separate Defendants Waste to Charity, Jack Fitzgerald and Thomas Scarcello are directed to promptly inform the Court once their respective bankruptcy proceedings are concluded. Signed by Honorable Robert T. Dawson on November 25, 2008. (lw)

IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF ARKANSAS FORT SMITH DIVISION TEMPUR-PEDIC INTERNATIONAL, INC. v. Civil No. 07-2015

PLAINTIFF

WASTE TO CHARITY, INC.; BROCO SUPPLY, INC.; JACK FITZGERALD; ERIC VOLOVIC; HOWARD HIRSCH; THOMAS SCARCELLO; NELSON SILVA; CLOSE OUT SURPLUS AND SAVINGS, INC.; ERNEST PEIA, and ACTION DISTRIBUTORS, INC.

DEFENDANTS

ORDER Now on this 25th day of November 2008, there comes on for consideration Close Out Surplus and Savings, Inc., Ernest Peia and Nelson Silva's (CSS Defendants) Motion to Reopen Case and to Sever Claims and supporting brief (Docs. 236-37), Plaintiff's Response (Doc. 239) and CSS Defendants' Reply (Doc. 240). None of the

remaining defendants responded to CSS Defendants' Motion. On September 24, 2008, the Court stayed this action pursuant to 11 U.S.C. of § 362 pending the outcome Waste of to the bankruptcy Jack

proceedings

Separate

Defendants

Charity,

Fitzgerald and Thomas Scarcello. (Doc. 233). CSS Defendants move the Court to reopen the case for the limited purpose of resolving Plaintiff's replevin claims against CSS Defendants in connection with the 4000 mattresses CSS states it purchased from Action

AO72A (Rev. 8/82)

Distributors, Inc. for $500,000 and which are currently subject to the injunction entered by this Court. Plaintiff objects on the

grounds that the mattresses are property of Waste to Charity's bankruptcy estate and that Waste to Charity, Jack Fitzgerald and Thomas Scarcello are indispensable parties. A district court has discretion to sever claims in

furtherance of convenience or economy, or to prevent prejudice. See Fed. R. Civ. P. 42(b). Further, the stay does not generally However, the

apply to non-bankrupt co-defendants of the debtor.

stay will apply to non-bankrupt co-defendants when claims against the co-defendants are inextricably interwoven with claims against the debtor or where the debtor is an indispensable party to the litigation. Plaintiff brings claims against all of the defendants for replevin, conversion and civil conspiracy to commit

conversion. It is the opinion of this Court that Plaintiff's allegations against all defendants are "inextricably interwoven, presenting common questions of law and fact, which can be resolved in one proceeding." See Fed. Life Ins. Co. v. First Financial Group of A severance would may prejudice the

Texas, Inc., 3 B.R. 375 (D.C.S.D. Tex. 1980). not be conducive to judicial economy and

bankrupt defendants.

Accordingly, the Court finds that CSS

Defendants' motion seeking to reopen the case and sever the replevin claims against them should be DENIED. This matter

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remains

stayed

pending Separate

the

resolution Waste

of to

the

bankruptcy Jack

proceedings.

Defendants

Charity,

Fitzgerald and Thomas Scarcello are directed to promptly inform the Court once their respective bankruptcy proceedings are

concluded. IT IS SO ORDERED this 25th day of November, 2008.

/s/ Robert T. Dawson HONORABLE ROBERT T. DAWSON UNITED STATES DISTRICT JUDGE

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