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In re: DIANN MARIE CATES

Summarizing by Lars Fuller

Taylor v. Axion Power International, Inc. (In re Mega-C Power Corp.)

Citation:
Ninth Circuit: Bankr. Case No. No. 10-60036; BAP No. 09-1343 (not appropriate for publication and not precedent except as provided by 9th Cir. R. 36-3)
Tag(s):
Ruling:
BAP’s affirmance of the Bankruptcy Court’s summary judgment dismissal on the merits affirmed. BAP's affirmance of the Bankruptcy Court’s denial of sanctions and contempt affirmed.
Procedural context:
The bankruptcy court granted a summary judgment dismissal of a creditor Taylor Family Group in an adversary proceeding concerning ownership of the rights to a device, in the involuntary bankruptcy action of a Chapter 11 debtor. In a separate order, the bankruptcy court denied a request for sanctions and contempt filed by Axion. After the Taylor Family Group appealed and Axion cross-appealed, the BAP affirmed both bankruptcy court orders. The Taylor Family Group appealed and Axion cross-appealed to the circuit court.
Facts:
The bankruptcy court granted a summary judgment dismissal of the Lewis Chip Taylor, Chip Taylor In Trust, Jared Taylor, ElginInvestments, Inc., Sharon Taylor, Nicole Taylor Pignatelli, Paul Pignatelli, Colin Taylor, Louise Taylor, 1407580 Ontario Limited, 1248136 Ontario Limited, Mega C Tech., Ltd. (Collectively Taylor Family Group) 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. The bankruptcy court granted summary judgment dismissal based on the terms of the Second Amended Plan filed in the bankruptcy which contained a permanent injunction and release of claims. The Court found the Second Amended Plan controlled because, regardless of the existence of an 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. The Court found that the Taylor Family Group failed to proffer evidence showing direct harm, as required to prove a direct claim and the Taylor Family Group repeatedly failed to provide credible evidence proving the existence and terms of any Oral Agreement. The court similarly found no support in the record for alleged claims to ownership rights in the technology, including 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. As to Axion’s cross-appeal for contempt and sanctions the Court found 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.
Judge(s):
HAWKINS, McKEOWN, and M. SMITH Circuit Judges

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