Transcontinental Refrigerated Lines Inc v. New Prime Inc et al
Filing
264
ORDER DENYING Hrobuchak's motion 254 for setoff. (See order for complete details.) Signed by Chief Judge Christopher C. Conner on 6/12/17. (ki)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
TRANSCONTINENTAL
REFRIGERATED LINES, by
LAWRENCE V. YOUNG, ESQ.,
Liquidating Agent,
Plaintiff
v.
NEW PRIME, INC., et al.,
Defendants
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CIVIL ACTION NO. 1:13-CV-2163
(Chief Judge Conner)
ORDER
AND NOW, this 12th day of June, 2017, upon consideration of the motion
(Doc. 254) by defendant Stephen P. Hrobuchak (“Hrobuchak”) requesting that the
court reduce the monetary judgment entered against him and in favor of plaintiff
Transcontinental Refrigerated Lines, Inc. (“Transcontinental”), through Lawrence
V. Young, Esquire, Liquidating Agent, wherein the court entered judgment against
Hrobuchak on Count I of the second amended adversary complaint (Doc. 143) in
accordance with the jury verdict (Doc. 247) returned on November 17, 2016, and,
pursuant to the Bankruptcy Code, see 11 U.S.C. §§ 548(a)(1)(A), 550(a), avoided the
transfer to Hrobuchak of $939,614.34 from the asset purchase agreement entered
by and between defendant New Prime, Inc. (“New Prime”) and Transcontinental
and from the sale of Transcontinental’s accounts receivable, and directed return of
same or the equivalent value thereof to Transcontinental, (Doc. 256 ¶¶ 2-5), and it
appearing that Hrobuchak specifically entreats the court to reduce the judgment by
the confidential settlement amounts paid to Transcontinental by New Prime and
the Handler Thayer & Duggan (“HTD”) defendants,1 (Doc. 254 at 3-4), and contends
that Transcontinental “agreed” to such reductions in its pretrial memorandum, (see
Doc. 254 at 4), in which Transcontinental set forth itemized damages for each of its
several fraudulent transfer claims and calculated “[t]otal damages” of $4,017,545, to
be “reduced pro t[a]nto by the confidential sums paid to the Liquidating Agent by
all settling defendants pursuant to the various Settlement Agreements,” (Doc. 205
at 19-20), and it appearing that Hrobuchak further contends that he, New Prime,
and the HTD defendants are “joint tortfeasors” in the fraudulent transfer found by
the jury’s verdict, (Doc. 261 at 5), and taking Hrobuchak’s arguments seriatim: first,
concerning Transcontinental’s reference to a pro tanto reduction in its pretrial
filing, it being clear from the memorandum and from the nature of the claims sub
judice that Transcontinental’s reference contemplated appropriate reductions in
the event of total recovery at trial of all damages claimed in its second amended
adversary complaint, (see Doc. 205 at 19-20), which understanding accords with the
Bankruptcy Code’s prohibition against duplicative recovery, see 11 U.S.C. § 550(d)
(limiting the trustee to a single satisfaction for each fraudulent transfer), and that
our Rule 50 dismissal of certain of Transcontinental’s claims and the partial verdict
returned by the jury necessarily invoke a more nuanced inquiry into the propriety
of Hrobuchak’s requested reduction; and second, concerning Hrobuchak’s assertion
that New Prime and the HTD defendants are jointly and severally liable with him
for the $939,614.34 transfer found by the jury, it appearing that the special verdict
1
The HTD defendants are Eric Kalnis; James Duggan; Handler, Thayer &
Duggan; and Handler Thayer LLP. (See Doc. 143).
2
form, agreed to by all parties, tasked the jury to calculate not the amount of the
accounts receivable transfer in toto, but rather “the value of the money or property
that Stephen P. Hrobuchak received under the [asset purchase agreement/accounts
receivable],” (Doc. 247 at 1 (emphasis added)), such that the verdict rendered and
judgment entered reflect only that portion of the avoided transfer for which
Hrobuchak himself is liable individually, and the court concluding that Hrobuchak
has not shown, nor does the trial record permit the inference, that New Prime or
the HTD defendants received any portion of the $939,614.34 transfer upon which
the jury’s verdict and the court’s judgment are based, nor that any of the settling
defendants received a benefit from said transfer, and the court thus resolving that
Hrobuchak is not entitled to a setoff from the judgment entered against him, (see
Docs. 247, 256), it is hereby ORDERED that Hrobuchak’s motion (Doc. 254) for
setoff is DENIED.
/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania
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