Opinion · Supreme Court of the United States
Langenkamp v. Culp
498 U.S. 42
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1991-01-10
- Topic
- bankruptcy
holding that a defendant in a preference action that has filed a proof of claim is not entitled to a jury trial | holding that Creditors submit themselves to the Bankruptcy Court’s jurisdiction by submitting a proof of claim | holding that the right to a jury trial on a preference claim is lost if the creditor files a proof of claim | holding that a party who has not submitted a proof of claim is entitled to a jury trial on preference actions | holding that when respondents filed a claim against the bankruptcy estate, they brought themselves within the equitable jurisdiction of the bankruptcy court to process said claim | holding that creditors who file proofs of claim against the estate are not entitled to a jury trial on matters affecting the allowance of those claims | holding that when a creditor files a proof of claim, "the ensuing preference action by the trustee become[s] integral to the restructuring of the debtor-creditor relationship through the bankruptcy court's equity jurisdiction.” | holding that a bankruptcy court could decide a preferential-transfer claim when the creditor filed a claim because then “the ensuing preference action by the trustee become[s] integral to the restructuring of the debtor-creditor relationship” | holding that when a party files a proof of claim with the bankruptcy court, it consents to the court’s jurisdiction to make a final decision as to the claim | concluding that claimants against the debtor submitted to the equitable jurisdiction of the bankruptcy court and were therefore not entitled to a jury trial on a bankruptcy trustee’s preference claim | concluding that claimants against the debtor submitted to the equitable jurisdiction of the bankruptcy court and were therefore not entitled to a jury trial on a bankruptcy trustee’s preference claim | holding that filing a proof of claim waives the right to a jury trial | holding that when a party submits a proof of claim, it "trigger[s] the process of 'allowance and disallowance of claims,' ” and thereby is consenting to jurisdiction of the bankruptcy court to make a final decision as to its claim | holding that when a party submits a proof of claim, it “trigger[s] the process of ‘allowance and disal-lowance of claims,’ ” and thereby is consenting to jurisdiction of the bankruptcy court to make a final decision as to its claim | holding that when a party submits a proof of claim, it “trigger[s] the process of ‘allowance and disallowance of claims,’” and thereby is consenting to jurisdiction of the bankruptcy court to make a final decision as to its claim | explaining that the filing of a Proof of Claim subjects the claimant to the equitable jurisdiction of the bankruptcy court | explaining that when a party subjects himself to a bankruptcy court’s equitable power, there is no right to a jury trial | stating that filing a proof of claim “subjects] [the filer] to the bankruptcy court’s equitable power” | holding that a creditor who files a proof of claim against a bankruptcy estate is not entitled to a jury trial on a trustee’s preference claim against it, emphasizing the importance of whether the creditor filed a proof of claim against the estate | holding that a creditor does not have a Seventh Amendment right to a jury trial when the creditor submits a claim against the estate, since the determination of the creditor’s claim and the ensuing preference action by the trustee are part of the bankruptcy court’s*equity jurisdiction | holding a creditor that filed a claim against the estate was not entitled to a jury trial on a preference claim asserted by a bankruptcy trustee | holding that a creditor who files a proof of claim subjects itself to the equitable jurisdiction of the bankruptcy court to adjudicate that claim and forfeits its right to a jury trial on a preference action which is part of the claim allowance process | holding that a creditor who files a proof of claim subjects itself to the equitable jurisdiction of the bankruptcy
Citator
- Cited by
- 188 opinions
This case presents the question whether creditors who submit a claim against a bankruptcy estate and are then sued by *43 the trustee in bankruptcy to recover allegedly preferential monetary transfers are entitled to jury trial under the Seventh Amendment. This action was brought by petitioner Langenkamp, successor trustee to Republic Trust & Savings Company and Republic Financial Corporation (collectively debtors). Debtors were uninsured, nonbank financial institutions doing business in Oklahoma. Debtors filed Chapter 11 bankruptcy petitions on September 24, 1984. At the time of the bankruptcy filings, respondents held thrift and passbook savings certificates issued by debtors, which represented debtors’ promise to repay moneys the respondents had invested.
Within the 90-day period immediately preceding debtors’ Chapter 11 filing, respondents redeemed some, but not all, of debtors’ certificates which they held. Thus, upon the bankruptcy filing, respondents became creditors of the now-bankrupt corporations. Respondents timely filed proofs of claim against the bankruptcy estates. Approximately one year after the bankruptcy filing, the trustee instituted adversary proceedings under 11 U. S. C. § 547(b) to recover, as avoidable preferences, the payments which respondents had received immediately prior to the September 24 filing. A bench trial was held, and the Bankruptcy Court found that the money received by respondents did in fact constitute avoidable preferences. In re Republic Trust & Savings Co., No. 84C-01461, Adversary No. 85-0337 (ND Okla., June 26, 1987), App. to Pet. for Cert. A-45; In re Republic Trust & Savings Co., No. 84-01461, Adversary No. 85-0319 (ND Okla., June 26, 1987), App. to Pet. for Cert. A-64. The United States District Court for the Northern District of Oklahoma affirmed. Republic Financial Corp. v. Langenkamp, Nos. 87-C-616-C, 87-C-618-C, 87-C-619-C (June 30, 1988), App. to Pet. for Cert. A-67. On appeal, the United States Court of Appeals for the Tenth Circuit upheld the District Court’s judgment on three grounds, but reversed on the issue of the holders’ entitlement to a jury trial on the *44 trustee’s preference claims. In re Republic Trust & Savings Co., 897 F. 2d 1041 (1990). Relying on our decisions in Granfinanciera, S. A. v. Nordberg, 492 U. S. 33 (1989), and Katchen v. Landy, 382 U. S. 323 (1966), the Tenth Circuit correctly held that “those appellants that did not have or file claims against the debtors’ estates undoubtedly [were] entitled to a jury trial on the issue whether the payments they received from the debtors within ninety days of the latter’s bankruptcy constitute^] avoidable preferences.” 897 F. 2d, at 1046. The Court of Appeals went further, however, concluding:
“Although some of the appellants did file claims against the estates because they continued to have monies invested in the debtors at the time of bankruptcy, ... we believe they likewise are entitled to a jury trial under the rationale of Granfinanciera and Katchen. Despite these appellants’ claims, the trustee’s actions to avoid the transfers, consolidated by the bankruptcy court, were plenary rather than a part of the bankruptcy court’s summary proceedings involving the ‘process of allowance and disallowance of claims.’” Id., at 1046-1047.
Petitioner contends that the Tenth Circuit erred in holding that those creditors of the debtors who had filed claims against the estate were entitled to a jury trial. We agree.
In Granfinanciera we recognized that by filing a claim against a bankruptcy estate the creditor triggers the process of “allowance and disallowance of claims,” thereby subjecting himself to the bankruptcy court’s equitable power. 492 U. S., at 58-59, and n. 14 (citing Katchen, supra, at 336). If the creditor is met, in turn, with a preference action from the trustee, that action becomes part of the claims-allowance process which is triable only in equity. Ibid. In other words, the creditor’s claim and the ensuing preference action by the trustee become integral to the restructuring of the debtor-creditor relationship through the bankruptcy court’s equity jurisdiction. Granfinanciera, supra, at 57-58. As *45 such, there is no Seventh Amendment right to a jury trial. If a party does not submit a claim against the bankruptcy estate, however, the trustee can recover allegedly preferential transfers only by filing what amounts to a legal action to recover a monetary transfer. In those circumstances the preference defendant is entitled to a jury trial. 492 U. S., at 58-59.
Accordingly, “a creditor’s right to a jury trial on a bankruptcy trustee’s preference claim depends upon whether the creditor has submitted a claim against the estate.” Id., at 58. Respondents filed claims against the bankruptcy estate, thereby bringing themselves within the equitable jurisdiction of the Bankruptcy Court. Consequently, they were not entitled to a jury trial on the trustee’s preference action. The decision by the Court of Appeals overlooked the clear distinction which our cases have drawn and in so doing created a conflict among the Circuits on this issue. For this reason we grant the petition for certiorari, reverse the judgment of the Court of Appeals for the Tenth Circuit, and remand for further proceedings consistent with this opinion.
It is so ordered.
Justice Kennedy took no part in the consideration or decision of this case.