Taylor v. Axion Power International, Inc. , 460 F. App'x 693 ( 2011 )

FILED
NOT FOR PUBLICATION DEC 05 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
In re: MEGA-C POWER No. 10-60036
CORPORATION,
BAP No. 09-1343
Debtor,
MEMORANDUM *
LEWIS CHIP TAYLOR; CHIP TAYLOR,
In Trust; JARED TAYLOR; ELGIN
INVESTMENTS, INC.; SHARON
TAYLOR; NICOLE TAYLOR
PIGNATELLI; PAUL PIGNATELLI;
COLIN TAYLOR; LOUISE TAYLOR;
1407580 ONTARIO LIMITED; 1248136
ONTARIO LIMITED; MEGA C. TECH.,
LTD,
Appellants,
v.
AXION POWER INTERNATIONAL,
INC.; AXION POWER CORPORATION;
ROBERT AVERILL; GLENN
PATTERSON; HAP INVESTMENTS,
LLC; IGOR FILIPENKO; THOMAS
GRANVILLE,
Appellees.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
In re: MEGA-C POWER No. 10-60037
CORPORATION,
BAP No. 09-1380
Debtor,
GLENN PATTERSON; HAP
INVESTMENTS, LLC; IGOR
FILIPENKO; THOMAS GRANVILLE;
AXION POWER CORPORATION;
ROBERT AVERILL; AXION POWER
INTERNATIONAL, INC.,
Appellants,
v.
LEWIS CHIP TAYLOR; CHIP TAYLOR,
In Trust; JARED TAYLOR; ELGIN
INVESTMENTS, INC.; SHARON
TAYLOR; NICOLE TAYLOR
PIGNATELLI; PAUL PIGNATELLI;
COLIN TAYLOR; LOUISE TAYLOR;
1407580 ONTARIO LIMITED; 1248136
ONTARIO LIMITED; MEGA C. TECH.,
LTD,
Appellees.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Hollowell, Pappas, and Dunn, Bankruptcy Judges, Presiding
Argued and Submitted November 16, 2011
San Francisco, California
Before: HAWKINS, McKEOWN, and M. SMITH, Circuit Judges.
Appellants Lewis Chip Taylor, Chip Taylor In Trust, Jared Taylor, Elgin
Investments, Inc., Sharon Taylor, Nicole Taylor Pignatelli, Paul Pignatelli, Colin
Taylor, Louise Taylor, 1407580 Ontario Limited, 1248136 Ontario Limited, Mega
C Tech., Ltd. (collectively, the Taylor Family Group) appeal the bankruptcy
appellate panel’s (BAP) affirmance of the bankruptcy court’s summary judgment
dismissal of the Taylor Family Group’s claims in an adversary proceeding
concerning ownership of the rights to a lead-acid-carbon battery device, filed by
Axion Power International, Inc., et al, (Axion), in the involuntary bankruptcy action
of Mega-C Power Corp., a Chapter 11 debtor. Axion cross-appeals the BAP’s
affirmance of the Bankruptcy Court’s denial of sanctions and contempt. As the
facts and procedural history are familiar to the parties, we do not recite them here
except as necessary to explain our disposition.
We have jurisdiction under 28 U.S.C. § 158, and we affirm.
At the outset, we affirm the BAP’s holding and legal analysis that the
bankruptcy court had jurisdiction over the Taylor Family Group. The bankruptcy
court had personal jurisdiction over the Taylor Family Group insofar as they had
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submitted to that personal jurisdiction by appearing and vigorously participating in
the instant litigation. This fact was correctly noted both by the BAP and the
bankruptcy court. The bankruptcy court had subject matter jurisdiction because this
action is a core proceeding under 28 U.S.C. §§ 1334(b) (actions “arising in or
related to” a case under title 11) and 157(b)(2) (matters concerning administration
of a bankruptcy estate, confirmation of a plan, or another proceeding affecting the
parties' legal relationships). Moreover, the bankruptcy court exercised proper
subject matter jurisdiction because of its undisputed right to interpret its own
orders. See generally Beneficial Trust Deeds v. Franklin (In re Franklin), 802 F.2d
324, 326 (9th Cir. 1986); Huse v. Huse–Sporsem, A.S. (In re Birting Fisheries,
Inc.), 300 B.R. 489, 499 (9th Cir. BAP 2003).
On the merits, the BAP properly affirmed the bankruptcy court’s grant of
summary judgment to the Axion Appellees as to the Taylor Family Group’s claims
by the terms of the Second Amended Plan, which contained a permanent injunction
and release of claims. The Second Amended Plan controls because, regardless of
the existence of the alleged previous Oral Agreement transferring assets to the
Taylor Family Group, the Debtor still would have come into possession of the
assets under the terms of the Letter Agreement. First, as to the direct/derivative
issue, in bankruptcy court and before the BAP, the Taylor Family Group failed to
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proffer evidence showing direct harm, as required to prove a direct claim. Second,
as to the existence of an Oral Agreement, the Taylor Family Group repeatedly failed
to provide credible evidence proving its existence and terms. And now, the Taylor
Family Group points to similarly contradictory and inconsistent evidence to contest
the terms of the Letter Agreement. All of the Taylor Family Group’s arguments are
unavailing because they fail to change the ultimate fact that ownership of the assets
was transferred to the Debtor and thus passed through the Second Amended Plan.
Accordingly, the bankruptcy court properly found, and the BAP properly affirmed,
that regardless of any alleged pre-existing agreements, the Second Amended Plan
controls and bars the Taylor Family Group’s claims.
Notably, the Taylor Family Group raises some new factual and legal
arguments relating to the ownership rights in the technology, including, but not
limited to contesting the ownership rights of the Technology based upon listing in
the Schedules, an alleged “quitclaim” of ownership rights in the Technology, the
alleged “executory” nature of the Letter Agreement, and an alleged “double
injunction” by the bankruptcy court. These arguments were considered on the
merits and deemed not waived because they related to the underlying claims in the
litigation—namely, whether “the injunction in the Second Amended Plan does not
apply to Taylor v. Tamboril because, in the Oral Agreement, C & T agreed to
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transfer to the Taylor Family Group (Elgin) all assets of C & T.” In re Mega-C
Power Corp., Nos. NV-09-1343-PADH, NV-09-1380-PaDH, No. 04-50962-GWZ,
No. 07-05017-GWZ, 2010 WL 6467668, at *9 (9th Cir. BAP Jun. 29, 2010); see
generally Yee v. City of Escondido, 503 U.S. 519, 534 (1992). These arguments fail
because they lack support in the record, and therefore do not change the Second
Amended Plan’s control. Accordingly, we affirm the BAP’s affirmance of the
bankruptcy court’s summary judgment dismissal on the merits.
As to Axion’s cross-appeal for contempt and sanctions, we affirm the BAP
because the bankruptcy court applied the correct legal standard and rendered a
factual finding, based on the record, that there was insufficient evidence to find
“that any violation of the plan injunction by the Taylor Family Group was
intentional, or that contempt sanctions were justified.” In re Mega-C Power Corp.,
2010 WL 6467668, at *14.
AFFIRMED.
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