United States Court of Appeals, Sixth Circuit, 710 F.2d 1194 (6th Cir. 1983). · Go Syfert
United States Court of Appeals, Sixth Circuit, 710 F.2d 1194 (6th Cir. 1983). Cases Citing This Book View Copy Cite
266 citation events (109 in the last 25 years) across 96 distinct courts.
Negative lean: 10th  ·  Positive lean: 3rd, 4th, 6th, 7th, 2nd, 5th
Strongest positive: Bowling v. Wellpath Inc (mied, 2024-12-04) · Strongest negative: In Re Western Real Estate Fund, Inc., Debtors. Landsing Diversified Properties-Ii v. The First National Bank and Trust Company of Tulsa v. Kevin M. Abel Abel & Busch, Inc., Third-Party-Defendants-Appellants (ca1, 1991-01-23)
Treatment trajectory · 1983 → 2026 · click a year to view as-of
1983 2004 2026
Top citers, strongest first. 50 distinct citers. How cited ↗
discussed Cited "but see" In Re Western Real Estate Fund, Inc., Debtors. Landsing Diversified Properties-Ii v. The First National Bank and Trust Company of Tulsa v. Kevin M. Abel Abel & Busch, Inc., Third-Party-Defendants-Appellants
1st Cir. · 1991 · signal: but see · confidence high
But see Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-1200 (6th Cir.1983) (pre-Piccinin case denying stay under similar circumstances despite recognition that claims for indemnification and contribution against debtor could arise out of nonstayed litigation).
discussed Cited "but see" Landsing Diversified Properties-II v. First National Bank & Trust Co. (In re Western Real Estate Fund, Inc.)
10th Cir. · 1990 · signal: but see · confidence high
But see Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-1200 (6th Cir.1983) (pre-Picci-nin case denying stay under similar circumstances despite recognition that claims for indemnification and contribution against debtor could arise out of nonstayed litigation).
discussed Cited "but see" Landsing Diversified Properties-II v. First National Bank & Trust Co.
10th Cir. · 1990 · signal: but see · confidence high
But see Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-1200 (6th Cir.1983) (pre-Picci-nin case denying stay under similar circumstances despite recognition that claims for indemnification and contribution against debtor could arise out of nonstayed litigation).
examined Cited as authority (verbatim quote) Bowling v. Wellpath Inc
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Dykes-Bey v. Grand Prairie Health Care Services
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Fortenberry v. Fuciarelli
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Haywood v. Watson
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) McDuff v. Jones
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Levitan v. Maclean
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Scott v. Massey
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Savoie v. Oliver
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Alger v. Corizon
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) McNees v. Coleman
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Lentz v. MDOC
E.D. Mich. · 2024 · signal: see, e.g. · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (verbatim quote) Belfor U.S.A. Group, Inc. v. Salem Consumer Square OH LLC
S.D. Ohio · 2022 · signal: see · quote attribution · 1 verbatim quote · confidence high
it is initially observed that any duplicative or multiple litigation which may occur is a direct by-product of bankruptcy law. as such, the duplication, to the extent that it may exist, is congressionally created and sanctioned.
examined Cited as authority (verbatim quote) Ford Motor Credit Company v. McCleod
Iowa Ct. App. · 2021 · signal: see also · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by section 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the . . . debtor.
discussed Cited as authority (verbatim quote) In Re Cincom iOutsource, Inc. (2×) also: Cited as authority (rule)
Bankr. S.D. Ohio · 2008 · signal: see also · quote attribution · 1 verbatim quote · confidence high
djuplicative or multiple litigation which may occur is a direct byproduct of bankruptcy law. as such, the duplication, to the extent that it may exist, is congressionally created and sanctioned.
examined Cited as authority (verbatim quote) Surety Life Insurance Co. v. Rupp
Utah Ct. App. · 1992 · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (quoted) Hom v. HOV Services, Inc. (3×) also: Cited as authority (rule)
E.D. Mich. · 2025 · quote attribution · 1 verbatim quote · confidence low
it is beyond peradventure that joint tortfeasors are not indispensable parties in the federal forum.
examined Cited as authority (quoted) BMO Harris Bank N.A. v. Stacy
N.D. Ohio · 2024 · quote attribution · 1 verbatim quote · confidence low
it is universally acknowledged that an automatic stay of proceeding accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the chapter 11 debtor.
examined Cited as authority (quoted) Arora v. Diversified Consultants, Inc.
N.D. Ill. · 2021 · signal: see · quote attribution · 1 verbatim quote · confidence high
it is universally acknowledged that an automatic stay of proceedings accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the ... debtor
discussed Cited as authority (quoted) Brady v. Burtt
W.D. Mich. · 1997 · quote attribution · 1 verbatim quote · confidence low
tjortfeasors are neither indispensable nor necessary since their liability is both joint and several
examined Cited as authority (quoted) Vernes v. State Street Mortgage Company, No. Cv90 033966s (May 20, 1993)
Conn. Super. Ct. · 1993 · quote attribution · 1 verbatim quote · confidence low
it is universally acknowledged that an automatic stay of proceedings accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with similar legal or factual nexus to the . . . debtor.
examined Cited as authority (quoted) Vernes v. State Street Mortgage Company, No. Cv90 033966s (May 18, 1993)
Conn. Super. Ct. · 1993 · quote attribution · 1 verbatim quote · confidence low
it is universally acknowledged that an automatic stay of proceedings accorded by 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with similar legal or factual nexus to the . . . debtor.
discussed Cited as authority (rule) Warren Real Estate Holdings, Inc. v. Sinclair Construction Group, Inc. and Megaslab, Inc.
W.D. Okla. · 2026 · confidence medium
Even if Megaslab raises these defenses later, duplicative litigation is a “direct by-product of bankruptcy law” so duplication is “congressionally created and sanctioned.” Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1199 (6th Cir. 1983).
cited Cited as authority (rule) In Re: Jan N. Evola
Bankr. D.N.J. · 2025 · confidence medium
Ill. 1990) and Lynch v. Johns–Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983)).
discussed Cited as authority (rule) Gibson v. McClafferty
D.V.I. · 2025 · confidence medium
Power Co. v. Calpine Corp. (In re Calpine Corp.) 710 F.2d 1194, 1196-97 (6th Cir. 1983)); , 803 Diocese of Rochester v. AB 100 Doe (In re Diocese of Rochester) F.2d 61, 65 (2d Cir. 1986); , 365 B.R. 401 , see also In re 408 (S.D.N.Y. 2007); , Nos. 19- 20905-PRW, 22-02075-PRW, 2022 LX 86497 (Bankr.
discussed Cited as authority (rule) Arends v. Family Solutions of Ohio, Inc.
N.D. Ohio · 2025 · confidence medium
No. 226 at PageID# 8539.) As the Sixth Circuit has explained, “[i]t is universally acknowledged that an automatic stay of proceeding accorded by [11 U.S.C.] § 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the Chapter 11 debtor.” Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983).
discussed Cited as authority (rule) Applebee's Franchisor LLC v. Georgas
D. Kan. · 2025 · confidence medium
Plaintiff counters that such concerns “are mitigated entirely” by Plaintiff’s motions in the Bankruptcy case, which “demonstrate the Bankruptcy Court is not the proper forum for resolving the Adversary Proceeding and seek the most efficient and legally sound path forward: consolidation of the Adversary Proceeding with this more comprehensive, first-in-time case, thus eliminating the unfounded concerns raised by Guarantors.” (Doc. 23, at 8-9.) Plaintiff continues that courts have “consistently held that duplicative litigation and inconsistent judgments are an inherent and accepted c…
discussed Cited as authority (rule) Julian St. Rose Virginie George Raymond Alleyne Edgar Barrios and Others v. Virgin Islands Industrial Maintenance Corporation HOVENSA, LLC HOVIC and The Hess Corporation, Formerly Known as Amerada Hess Corp.
visuper · 2023 · confidence medium
Co. v. United Jersey Bank, 959 F.2d 1194, 1205 (3d Cir. 1991); Williford v. Armstrong World Indus., Inc., 715 F.2d 124, 126 (4th Cir. 1983); Arnold v. Garlock, Inc., 278 F.3d 426, 436 (5th Cir. 2001) (quoting Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 544 (5th Cir. 1983)); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983); Pitts v. Unarco Indus., 698 F.2d 313, 314 (7th Cir. 1983); Croyden Assocs. v. Alleco, Inc., 969 F.2d 675, 677 (8th Cir. 1992); Ingersoll-Rand Fin.
discussed Cited as authority (rule) Julian St. Rose Virginie George Raymond Alleyne Edgar Barrios and Others v. Virgin Islands Industrial Maintenance Corporation HOVENSA, LLC HOVIC and The Hess Corporation, Formerly Known as Amerada Hess Corp.
visuper · 2023 · confidence medium
Co. v. United Jersey Bank, 959 F.2d 1194, 1205 (3d Cir. 1991); Williford v. Armstrong World Indus., Inc., 715 F.2d 124, 126 (4th Cir. 1983); Arnold v. Garlock, Inc., 278 F.3d 426, 436 (5th Cir. 2001) (quoting Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 544 (5th Cir. 1983)); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983); Pitts v. Unarco Indus., 698 F.2d 313, 314 (7th Cir. 1983); Croyden Assocs. v. Alleco, Inc., 969 F.2d 675, 677 (8th Cir. 1992); Ingersoll-Rand Fin.
discussed Cited as authority (rule) Moon Group, Inc.
Bankr. D. Del. · 2022 · confidence medium
In excusing the bank’s non-compliance with state law, the court held that there was no way for the bank to comply with the state law without violating the automatic stay because the 86 Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983). 87 McCartney, 106 F.3d at 510 . 88 McCartney, 106 F.3d 506 (3d Cir. 1997). 34 bank would have had to name McCartney in order pursue its deficiency judgment action in state court or risk discharging him as a loan guarantor.
discussed Cited as authority (rule) Moon Group, Inc. v. KORE Capital Corporation
Bankr. D. Del. · 2022 · confidence medium
In excusing the bank’s non-compliance with state law, the court held that there was no way for the bank to comply with the state law without violating the automatic stay because the 86 Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983). 87 McCartney, 106 F.3d at 510 . 88 McCartney, 106 F.3d 506 (3d Cir. 1997). 34 bank would have had to name McCartney in order pursue its deficiency judgment action in state court or risk discharging him as a loan guarantor.
discussed Cited as authority (rule) Albina v. The Aliera Companies, Inc.
E.D. Ky. · 2021 · confidence medium
DISCUSSION While the Court agrees with Plaintiffs that “the automatic stay provision in 11 U.S.C. § 362 only applies to the debtor (here, Trinity)” and, therefore, cannot be invoked by Aliera and Unity, that does not mean the Court may not otherwise stay this matter while Trinity’s bankruptcy proceedings are ongoing. [DE 59, at 2 (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983)).
discussed Cited as authority (rule) Hsieh v. Apache Deepwater, LLC
M.D. La. · 2021 · confidence medium
See Reliant Energy Servs., 349 F.3d at 825 ; see also Wedgeworth v. Fibreboard Corp., 706 F.2d 541 (5th Cir. 1983) (refusing to stay asbestos litigation against solvent co-defendants); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1199 (6th Cir. 1983) (same).
cited Cited as authority (rule) Simpson v. Lincoln Heritage Council, Inc. Boy Scouts of America
W.D. Ky. · 2020 · confidence medium
Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983); 11 U.S.C. § 362 (2018).
cited Cited as authority (rule) HCP Springs MOB Louisville, LLC v. Bluegrass Pain Consultants, PLLC
W.D. Ky. · 2019 · confidence medium
Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983).
discussed Cited as authority (rule) BMO Harris Bank N.A. v. Mid-Ark Utilities & Rig Services, Inc.
E.D. Ark. · 2019 · confidence medium
Mo. Bankr. 2016) (stating that “[i]t is universally acknowledged that an automatic stay of proceeding accorded by § 362 [(a)(1)] may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the . . . debtor . . . .”) (quoting Lynch v. Jones-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983)).
cited Cited as authority (rule) Chenault v. The University of Kentucky (UK)
E.D. Ky. · 2019 · confidence medium
Easley v. Pettibone Michigan Corp., 990 F.2d 905, 910 (6th Cir. 1993); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir. 1983).
discussed Cited as authority (rule) Cousins International Food, Corp. v. Aquino Vidal (2×) also: Cited "see"
1st Cir. BAP · 2017 · confidence medium
Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir. 1983) (quoting S. Rep.
discussed Cited as authority (rule) Nadler v. John Knox Village (In re Triad Construction Co.)
Bankr. W.D. Mo. · 2016 · confidence medium
In Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir.1983), the plaintiffs, who had been named as codefendants in other state and federal court actions along with two debtors that had commenced bankruptcy cases under Chapter 11, sought protection under the automatic stay.
discussed Cited as authority (rule) In re Hart
Bankr. E.D. Pa. · 2015 · confidence medium
Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1204 (3d Cir.1991) (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-97 (6th Cir.1983)); see also Credit Alliance Corp. v. Williams, 851 F.2d 119, 121-22 (4th Cir.1988) (enforcing a judgment entered against a nondebtor guarantor of a note during corporate obligor’s bankruptcy proceeding).
discussed Cited as authority (rule) Fleisher v. Southern AgCredit
Miss. Ct. App. · 2012 · confidence medium
As a consequence, “[i]t is universally acknowledged that an automatic stay of proceedings accorded by § 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the ... debtor.” Id. at 1205 (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-97 (6th Cir.1983)); see also United States v. Dos Cabezas Corp., 995 F.2d 1486, 1491-93 (9th Cir.1993) (holding that stay does not preclude government from pursuing deficiency judgment against nondebtor cosignors of promissory note); Croyden Assocs. v. Alleco, Inc., …
discussed Cited as authority (rule) Evelyn Nye v. Bayer Cropscience, Inc. (2×)
Tenn. · 2011 · confidence medium
The automatic stay, which “is one of the fundamental debtor protections provided by the bankruptcy laws,” Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir. 1983), serves “‘to provide the debtor a ‘breathing spell’ from collection efforts and to shield individual creditors from the effects of a ‘race to the courthouse,’ thereby promoting the equal treatment of creditors.’” In re Webb Mtn, LLC, 414 B.R. 308, 335 (Bankr.
discussed Cited as authority (rule) In Re Ebadi
Bankr. E.D.N.Y. · 2011 · confidence medium
Because the Foreclosure Sale is a substantial step in a process that could lead to recovery of a deficiency judgment from Debtor, it falls within the contours of “any act to collect, assess, 7 or recover a claim against the debtor,” which is prohibited by the automatic stay under Section 362(a)(6) of the Code. 8 11 U.S.C. § 362 (a)(6). 9 *316 It is a well established principle of bankruptcy law that a creditor is generally not barred from pursuing collection of a debt from a non-filing co-obligor or guarantor, even if one of the obligors, or the principal obligor, is a debtor in bankruptc…
cited Cited as authority (rule) Heritage Contracting, L.L.C. v. Vasquez
Fairfax Cir. Ct. · 2010 · confidence medium
Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983); see also In re All Seasons Resorts, Inc., 79 B.R. 901 (Bankr.
discussed Cited as authority (rule) Alvarez v. Bateson (2×)
Md. Ct. Spec. App. · 2007 · confidence medium
This Court concurs with the district court’s conclusion that it would distort congressional purpose to hold that a third party solvent co-defendant should be shielded against his creditors by a device intended for the protection of the insolvent debtor and creditors thereof. 710 F.2d at 1197 (emphasis added) (internal citations and quotations omitted) (footnote omitted).
discussed Cited as authority (rule) In Re MCSi, Inc. (2×)
S.D. Ohio · 2007 · confidence medium
To be sure, “ ‘it would distort congressional purpose to hold a third[-]party solvent co-defendant should be shielded against his creditors by a device intended for the protection of the insolvent debtor’ and creditors thereof.” Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir.1983), quoting H.R.Rep.
cited Cited as authority (rule) Morris v. Zelch (In Re Regional Diagnostics, LLC.)
Bankr. N.D. Ohio · 2007 · confidence medium
Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1198 (6th Cir.1983) (“It is beyond peradventure that joint tortfeasors are not indispensable parties in the federal forum.”).
discussed Cited as authority (rule) Nevada Power Co. v. Calpine Corp. (In Re Calpine Corp.)
S.D.N.Y. · 2007 · confidence medium
July 17, 1997) (“ 'It is universally acknowledged that an automatic stay of proceeding accorded by § 362 may not be invoked by [or on behalf of] entities such as sureties, guarantors, co-obli-gors, or others with a similar legal or factual nexus to the Chapter 11 debtor.'” (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir.1983))). 20 .Courts consistently have found that section 105 may be used to stay actions against non-debtors even where section 362 otherwise would not provide such relief, recognizing that section 105 grants broader authority than section 362.
Retrieving the full opinion text from the archive…
United States Court of Appeals, Sixth Circuit
1194.
Court of Appeals for the Sixth Circuit.
Jul 1, 1983.
710 F.2d 1194

710 F.2d 1194

8 Collier Bankr.Cas.2d 1301, 10 Bankr.Ct.Dec. 1282,
Bankr. L. Rep. P 69,317

Lincoln LYNCH, et al., Plaintiffs-Appellees,
v.
JOHNS-MANVILLE SALES CORPORATION, et al., Defendants,
Raymark Industries, Inc., et al., Defendants-Appellants
(83-3118, 83-3120, 83-3121, 83-3122, 83-3123,
83-3124, 83-3125, 83-3126),
Armstrong World Industries, Defendant-Appellant (83-3119),
National Gypsum Company, Defendant-Appellant (83-3127).

Nos. 83-3118, 83-3119, 83-3120, 83-3121, 83-3122, 83-3123,
83-3124, 83-3125, 83-3126 and 83-3127.

United States Court of Appeals,
Sixth Circuit.

Argued May 24, 1983.
Decided July 1, 1983.

Frederick J. McGavran, Frost & Jacobs, Cincinnati, Ohio, for defendants in No. 3118.

Jack McGowan, Baden, Jones, Scheper & Crehan Co., L.P.A., Hamilton, Ohio, for defendant-appellant in No. 3119.

John P. Harrington, Cincinnati, Ohio, for plaintiffs-appellees in No. 83-3118 and 83-3119.

Neil F. Freund, Young & Alexander Co., L.P.A., Dayton, Ohio, for Keene Bldge. in Nos. 3118, 3120, 3123, 3124 and 3125.

John H. Burtch (argued), Baker & Hostetler, Columbus, Ohio, for GAF Corp. in Nos. 3118, 3120, 3121, 3122, 3124 and 3125.

Michael D. Eagen, Bloom & Greene Co., L.P.A., Cincinnati, Ohio, for Celotex Corp. in Nos. 3118, 3120, 3121, 3122, 3123, 3124 and 3125.

Thomas M. Green (argued), Dayton, Ohio, for defendants-appellants in all cases.

Antonio D. Pyle, Joan P. Feldman, Pittsburgh, Pa., Melvin I. Friedman, Kreindler & Kreindler, New York City, for plaintiffs-appellees in Nos. 3120, 3121, 3123 and 3126.

Richard D. Heiser, Strauss, Troy & Ruehlmann, Co., L.P.A., Cincinnati, Ohio, for defendant-appellant in No. 83-3127.

Thomas W. Henderson, Baskin & Sears, Pittsburgh, Pa., Fredric Tilton, Cincinnati, Ohio, for plaintiffs-appellees in Nos. 3120, 3121, 3122, 3123, 3124, 3125 and 3126.

Thomas H. Terry, III (argued), Robert E. Sweeney Co., L.P.A., Cleveland, Ohio, for plaintiffs-appellees in all cases.

Before ENGEL and KRUPANSKY, Circuit Judges, and BROWN, Senior Circuit Judge.

KRUPANSKY, Circuit Judge.

[*~1194]1

These consolidated appeals join inquiry into the legal impact upon pending asbestos actions of petitions for reorganization which have been filed pursuant to Chapter 11 of the Bankruptcy Code, 11 U.S.C. Sec. 1101 et seq. (Code), by Unarco Industries, Inc. (Unarco)[1] and Johns-Manville Sales Corporation (J-M),[2] both of which are defendants in thousands of asbestos cases pending in the state and federal forums throughout the nation. As Chapter 11 petitioners, all proceedings against Unarco and J-M were automatically stayed by the mandate imposed by 11 U.S.C. Sec. 362. The bankruptcy court presiding over J-M's petition has refused to broaden the automatic stay of proceedings afforded the debtor under Sec. 362 to the co-defendants of J-M in asbestos actions pending throughout the country. It has also refused to permit the suits against J-M to proceed to judgment. See: In re Johns-Manville Corporation, et al., 26 B.R. 420, adversary proceeding No. 82-6221A, Decision No. 1 (Bkrtcy.S.D.N.Y.1983). Similarly, the bankruptcy court presiding over Unarco's petition has refused to lift the stay against Unarco. See: In re UNR Industries, Inc., 23 B.R. 144 (Bkrtcy.N.D.Ill.1982). The removal of Unarco and J-M as defendants in thousands of pending asbestos actions has generated concern by co-defendants who characterize themselves as "minor" defendants.

2

The two Chapter 11 debtors, Unarco and J-M, were party defendants in Lynch v. Johns-Manville Sales Corporation, et al., 23 B.R. 750, pending before Judge Spiegel, United States District Court for the Southern District of Ohio. Two solvent defendants in Lynch, Raymark Industries and Keene Corporation, moved the court for a stay of the proceedings pending against them under 11 U.S.C. Sec. 362, Rule 19, Fed.R.Civ.P., and the court's inherent powers. The motions were denied by memorandum opinion and order dated October 5, 1982. The order was subsequently adopted by reference in denial of similar motions by other solvent co-defendants of Unarco and/or J-M in other asbestos actions pending before Judge Spiegel. Bender v. Johns-Manville Sales Corp., et al., No. C-1-81-900; Burke v. Johns-Manville Sales Corp., et al., No. C-1-81-289; Carle v. Johns-Manville Sales Corp., et al., No. C-1-82-214; Chaddock v. Johns-Manville Sales Corp., et al., No. C-1-82-501; Goad v. Johns-Manville Sales Corp., et al., No. C-1-82-127; Phillips v. Johns-Manville Sales Corp., et al., No. C-1-82-299; and Milford v. Dana Corp., No. C-1-82-362. The foregoing orders denying motions to stay these asbestos proceedings were certified by the district court for immediate appeal pursuant to 28 U.S.C. Sec. 1292(b) and this Court granted applications for permission to appeal. Lincoln Lynch, et al. v. Johns-Manville Sales Corp., et al., 701 F.2d 42 (6th Cir.1983).

[*~1195]3

Confronting the initial inquiry of whether the automatic stay provision, 11 U.S.C. Sec. 362(a), may be invoked by the solvent co-defendants of Unarco and J-M to stay proceedings against them, it is noted that said provision facially stays proceedings "against the debtor" and fails to intimate, even tangentially, that the stay could be interpreted as including any defendant other than the debtor:

Sec. 362. Automatic stay

4

(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of--

5

(1) the commencement or continuation, including the issuance or employment or process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;

[*~1196]6

It is universally acknowledged that an automatic stay of proceeding accorded by Sec. 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the Chapter 11 debtor. See: In re Fintel, 10 B.R. 50 (Bkrtcy.Or.1981) (surety); Matter of Earth Lite, Inc., 9 B.R. 440 (Bkrtcy.Fla.1981) (guarantor); In re The Van Shop, Inc., 8 B.R. 73 (Bkrtcy.N.D.Ohio 1980) (co-obligor); In re Aboussie Brothers Construction Co., 8 B.R. 302 (E.D.Mo.1981) (individual partners of bankrupt partnership); GMAC v. Yates Motor Co., 159 Ga.App. 215, 283 S.E.2d 74 (1981) (joint tortfeasors); In re Smith, 14 B.R. 956 (Bkrtcy.D.C.Conn.1981) (guarantor on student loan); In re The Bank Center, Ltd., 15 B.R. 64 (Bkrtcy.W.D.Pa.1981) (partners of bankrupt partnership); In re Larmar Estates, Inc., 5 B.R. 328 (Bkrtcy.E.D.N.Y.1980) (guarantors of loan); In re Cloud Nine, 3 B.R. 202 (Bkrtcy.D.N.Mex.1980) (co-debtors); In re Trammel Road Townshouses, Ltd., 5 B.C.C. 314 (N.D.Ga.1977); Globe Construction Co. v. Oklahoma City Housing, 571 F.2d 1140 (10th Cir.1978). Contra: In re White Motor Credit Corp., 11 B.R. 294 (Bkrtcy.N.D.Ohio 1981) (dictum), rev. on other grounds, 23 B.R. 276 (N.D.Ohio 1982).

[*~1195]7

The legislative history of Sec. 362 discloses a congressional intent to stay proceedings against the debtor, and no other, to preserve the status quo of the estate in an effort to ultimately effect and implement, to the extent possible, a successful and equitable reorganization or liquidation.[3] The Notes of the Committee on the Judiciary identify the debtor as the intended primary congressional beneficiary of the stay:

8

The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.

9

See: S.Rep. No. 95-989, 95th Cong., 2d Sess. 54-55 (1978) reprinted in U.S.Code Cong. & Admin.News, 1978, pp. 5787, 5840-5841. The stay of proceedings was intended to promote an orderly reorganization or liquidation of the debtor's estate thereby benefiting, secondarily, creditors of the estate:

[*~1194]10

The automatic stay also provides creditor protection. Without it, certain creditors would be able to pursue their own remedies against the debtor's property. Those who acted first would obtain payment of the claims in preference to and to the detriment of other creditors. Bankruptcy is designed to provide an orderly liquidation procedure under which all creditors are treated equally. A race of diligence by creditors for the debtor's assets prevents that.

11

H.R.Rep. No. 95-595, 95th Cong., 2d Sess. 340 (1978), reprinted at U.S.Code Cong. & Admin.News, 1978, p. 6297. Nothing in the legislative history counsels that the automatic stay should be invoked in a manner which would advance the interests of some third party, such as the debtor's co-defendants, rather than the debtor or its creditors. This Court concurs with the district court's conclusion that "it would distort congressional purpose to hold that a third party solvent co-defendant should be shielded against his creditors by a device intended for the protection of the insolvent debtor" and creditors thereof. See also: In re Related Asbestos Cases, 23 B.R. 523, 527 (N.D.Cal.1982); In re UNR Industries, Inc., 23 B.R. 144 (Bkrtcy.N.D.Ill.1982); Ashworth v. Johns-Manville, et al., Nos. C78-470, C81-1545, C77-4088, C79-167 (N.D.Ohio Mar. 21, 1983) at 4.

12

It is a fundamental rule of statutory construction that inclusion in one part of a congressional scheme of that which is excluded in another part reflects a congressional intent that the exclusion was not inadvertent. See: Equal Employment Opportunity Commission v. Kimberly Clark Corp., 511 F.2d 1352, 1362 (6th Cir.), cert. denied, 423 U.S. 994, 96 S.Ct. 420, 46 L.Ed.2d 368 (1975). In particular, this Court has acknowledged the Bankruptcy Act as a detailed and calculated statutory scheme particularly appropriate to in pari materia construction. See: In re Bell, 700 F.2d 1053 (6th Cir.1983) (construing Chapters 7 and 13 in pari materia); In re Fulghum Construction Corporation, 706 F.2d 171 (6th Cir.1983) (construing subsections of 11 U.S.C. Sec. 547 in pari materia). In the action sub judice, such a construction of Chapters 11 and 13 of the Code support the proposition that Congress did not envision or intend the automatic stay of proceedings to be available to solvent co-defendants of a Chapter 11 debtor. Particularly, Chapter 13 expressly stays proceedings of creditors against co-debtors of the petitioner, 11 U.S.C. Sec. 1301(a), whereas similar language is significantly absent from Chapter 11. Not only is the absence of any expansion of the scope the stay in Chapter 11 probative of congressional intent but, further, the pronouncement which does appear in Chapter 13 is extremely limited; it applies only to co-debtors rather than, as in the action at bar, co-defendants of the petitioner. Accordingly, in pari materia construction of Chapters 11 and 13 counsel that Congress did not envision or intend the Sec. 362 stay to be utilized in a manner other than for the purpose of protecting the debtor and its estate. See also: In re Related Asbestos Cases, supra, 23 B.R. at 528; Pitts v. Unarco Industries, Inc., 698 F.2d 313 (7th Cir.1983); In re Massachusetts Asbestos Cases, M.B.L. Nos. 1 & 2 (D.Mass. Sept. 23, 1982); In re Stay of Proceedings Against Defendants Johns-Manville Corporation and Unarco Industries, Inc., 99 Wash.2d 193, 660 P.2d 271 (S.C.Wash.1983) (en banc); Clutter v. Johns-Manville, et al., No. C-78-1229 (N.D.Ohio Aug. 2, 1982); In re UNR Industries, Inc., supra.

[*1194]13

The solvent co-defendants of Unarco and J-M also urge a judicial classification of the Chapter 11 debtors as "indispensible" so as to mandate a stay of proceedings under Rule 19, Fed.R.Civ.P.[4] Although the actions consolidated on appeal are uniformly predicated upon diversity, the issue of joinder and indispensability is one of federal law. Provident Tradesmans Bank & Trust Co. v. Patterson, 390 U.S. 102, 125, note 22, 88 S.Ct. 733, 746, note 22, 19 L.Ed.2d 936 (1968). It is beyond peradventure that joint tortfeasors are not indispensable parties in the federal forum. See: Field v. Volkswagenwerk-AG, 626 F.2d 293, 298 n. 7 (3d Cir.1980); Herpich v. Wallace, 430 F.2d 792, 817 (5th Cir.1970); Windert Watch Co., Inc. v. Remex Electronics, Ltd., 468 F.Supp. 1242, 1246 (S.D.N.Y.1979); 7 Wright & Miller, Federal Practice and Procedure, Sec. 1623 at 241-42 (1973 & Supp.1981); Royal Truck and Trailer v. Armadora Maritime Salvadorena, 10 B.R. 488 (N.D.Ill.1981); Jett v. Phillips & Associates, 439 F.2d 987 (10th Cir.1971); Sandobal v. Armour & Co., 429 F.2d 249 (8th Cir.1970); 3A Moore, Federal Practice p 19.07(1) (2d ed. 1967). Indeed, the Advisory Committee Notes accompanying Rule 19 provide that "a tortfeasor with the usual 'joint and several' liability is merely a permissive party to an action against another with like liability" and "Joinder of these tortfeasors continues to be regulated by Rule 20". Since the complaints at bar allege conditions of asbestosis resulting from exposure to products of both the solvent co-defendants and Unarco and/or J-M, the Chapter 11 debtors are joint tortfeasors and accordingly not indispensable. See also: In re Related Asbestos Cases, 23 B.R. 523 (N.D.Cal.1982); Austin v. Unarco Industries, Inc., 705 F.2d 1 (1st Cir.1983); Ashworth v. Johns-Manville Sales Corp., Case Nos. C78-470, C81-1545, C77-1088, C79-167 (N.D.Ohio Mar. 21, 1983); In re Stay of Proceedings Against Defendants Johns-Manville Corp. v. Unarco Industries, Inc., 99 Wash.2d 193, 660 P.2d 271 (S.C.Wash.1983) (en banc ).

[*~1197]14

Last, the solvent co-defendants of Unarco and J-M implore this Court to invoke its inherent power to stay proceedings. Landis v. North American Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936). It is submitted that the factors incorporated in Rule 19(b), Fed.R.Civ.P., as interpreted in Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968), should be employed, by analogy, to determine of such inherent power should be exercised. Particularly, the solvent co-defendants conjecture that a continuation of proceedings in the absence of J-M and Unarco will result in multiple and piecemeal litigation on a scale heretofore unknown in the history of American jurisprudence; initial litigation would transpire in the state and federal forums and then duplicative litigation would issue in the respective bankruptcy forums for indemnity or contribution thereby adversely impacting upon valuable judicial resources and generating a risk of inadequate and conflicting adjudications. Additionally the solvent co-defendants assert that the automatic stay of 11 U.S.C. Sec. 362 precludes discovery upon J-M and Unarco thereby seriously compromising their ability to successfully defend pending actions.

[*1199]15

Confronting these arguments, it is initially observed that any duplicative or multiple litigation which may occur is a direct by-product of bankruptcy law. As such, the duplication, to the extent that it may exist, is congressionally created and sanctioned. More importantly, however, any benefits which may derive to the solvent co-defendants from a stay are clearly outweighed by the countervailing interests of the plaintiffs. As the First Circuit has cogently observed:

16

In a number of those [asbestos] cases, plaintiffs and crucial witnesses are dying. We are not persuaded that the hardship to defendants of having to go forward on this appeal without Unarco, or the interests of judicial economy in avoiding relitigation of the issues, are strong enough to justify forcing plaintiff and a number of other plaintiffs to wait until bankrupt defendants are successfully reorganized in order to be able to pursue their claims.

17

Austin, supra, 705 F.2d at 5. The First Circuit's implicit concern that time is of the essence in the prosecution of asbestos cases is further amplified by the unknown and potentially unlimited duration of the stay which, to successfully avoid duplicative litigation, must necessarily issue until reorganization is effected:

18

A "temporary" stay which was keyed to the resolution of the pending "relief-from-stay" petitions in the bankruptcy courts could, indeed, become one of nearly "indefinite," or, at least, unpredictable duration. These plaintiffs should not be thus denied a forum in which to pursue their claims against those defendants who remain unshielded by the bankruptcy laws.

19

In re Related Asbestos Cases, supra, 23 B.R. at 532.

20

Accordingly, this Court finds no basis in law or equity for staying proceedings of the solvent co-defendants of Unarco and J-M until such time as said debtors have been reorganized or liquidated. The orders of the district court denying motions for stays are therefore AFFIRMED. This judgment is without prejudice to the appellants to seek, in the appropriate forum, authorization to conduct discovery upon Johns-Manville and Unarco.

1

Unarco filed its petition in the United States Bankruptcy Court for the Northern District of Illinois on July 29, 1982

2

J-M filed its petition in the United States Bankruptcy Court for the Northern District of New York on August 26, 1982

3

In Paden v. Union for Experimenting Colleges & Universities, 7 B.R. 289 (N.D.Ill.1980), the stay was construed as designed to

prevent the dissipation or diminution of the bankrupt's assets during the pendency of the Chapter XI proceeding ... and to avoid the multiplicity of claims in different forms against the estate.

Id. at 290 (describing the predecessor to Sec. 362). See also: In re Holtkamp, 669 F.2d 505 (7th Cir.1982).

4

Rule 19 provides in pertinent part:

(a) Persons to be Joined if Feasible. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.

(b) Determination by Court Whenever Joinder not Feasible. If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.