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Wright v. Owens Corning

United States Court of Appeals for the Third Circuit

November 17, 2011, Argued; May 18, 2012, Opinion Filed

No. 11-2026

Opinion

 [*102]  OPINION OF THE COURT

AMBRO, Circuit Judge

This appeal concerns the application of our recent decision in JELD-WEN, Inc. v. Van Brunt (In re Grossman's Inc.), 607 F.3d 114 (3d Cir. 2010), establishing a new test for determining when a "claim" exists under the Bankruptcy Code, 11 U.S.C. §§ 1101 et seq. Plaintiffs Patricia Wright and Kevin West (collectively, the "Plaintiffs") filed a putative class action seeking damages related to defects in roofing shingles manufactured by Owens Corning.1 The District Court granted Owens Corning's motion for summary judgment, determining that the Plaintiffs' claims were discharged under the confirmed reorganization plan (the "Plan") of Owens Corning and certain of its subsidiaries (collectively, the "Debtors"). Specifically, the Court held that, based on Grossman's, the Plaintiffs held "claims" under the Code, and that the published notices of the Debtors' Chapter 11 bankruptcy cases afforded them procedural due process. We agree that the Plaintiffs held claims under the Code, but, under the circumstances before us, disagree that they were afforded procedural due process. Hence their claims were not discharged. We thus affirm  [**3] in  [*103]  part and reverse in part the Court's judgment, and remand the case for further proceedings.

I. Background

The Plaintiffs' story presents the challenge of administering unknown future claims in bankruptcy. In late 1998 or early 1999, Wright hired a contractor, who installed shingles manufactured by Owens Corning on her roof. In 2005, West similarly hired a contractor, who likewise installed shingles manufactured by Owens Corning on his roof. They both discovered leaks in 2009, and determined that the shingles had cracked. Each sent warranty claims to Owens Corning. It rejected Wright's claim in part and West's claim in full. In November 2009, Wright filed a class action against Owens Corning alleging fraud, negligence, strict liability, and breach of warranty. West later was added as a named plaintiff.

Meanwhile, back in October 2000, the Debtors filed their Chapter 11 bankruptcy petitions. In November 2001, the Bankruptcy Court set a claims bar date of April 15, 2002. All claimants were required to file proofs of  [**4] claim on or before that date. It also approved a bar date notice, which was published twice in The New York Times, The Wall Street Journal, and USA Today, among other publications. The notice directed claimants to file proofs of claim if they held claims2 that arose prior to the filing of the Debtors' bankruptcy cases. It specifically identified claims relating to "the sale, manufacture, distribution, installation and/or marketing of products by any of the Debtors, including without limitation . . . roofing shingles . . . ."

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679 F.3d 101 *; 2012 U.S. App. LEXIS 10040 **; 56 Bankr. Ct. Dec. 134; Bankr. L. Rep. (CCH) P82,274; 2012 WL 1759992

PATRICIA WRIGHT; KEVIN WEST, on behalf of themselves and all others similarly situated, Appellants v. OWENS CORNING

Subsequent History: US Supreme Court certiorari denied by Owens Corning v. Wright, 568 U.S. 1157, 133 S. Ct. 1239, 185 L. Ed. 2d 177, 2013 U.S. LEXIS 1115 (Feb. 19, 2013)

Related proceeding at Gonzalez v. Corning, 2013 U.S. Dist. LEXIS 138676 (W.D. Pa., Sept. 27, 2013)

Prior History:  [**1] Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. Civil Action No. 2-09-cv-01567). District Judge: Honorable Joy Flowers Conti.

Wright v. Owens Corning, 450 B.R. 541, 2011 U.S. Dist. LEXIS 29042 (W.D. Pa., Mar. 21, 2011)

CORE TERMS

notice, Confirmation, claimants, due process, discharged, pre-petition, unknown, bankruptcy proceedings, district court, future claim, exposure, shingles, exposed, pre-confirmation, circumstances, retroactively, right to payment, bankruptcy case, give rise, reorganization, post-petition, manufactured, proceedings, appointed, roofing