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In Re v. Saint Vincents Catholic Medical Centers of New York

September 27, 2012

IN RE: SAINT VINCENTS CATHOLIC MEDICAL CENTERS OF NEW YORK, ET AL., DEBTORS. BHARAT KUMAR NARUMANCHI,
APPELLANT,
v.
SAINT VINCENTS CATHOLIC MEDICAL CENTERS OF NEW YORK, ET AL., APPELLEES.



The opinion of the court was delivered by: Ramos, D.J.

OPINION AND ORDER

Bharat Kumar Narumanchi ("Narumanchi" or "Appellant") appeals the Order of the Bankruptcy Court denying his Lift Stay Motion as against Saint Vincents Catholic Medical Centers of New York, et al. ("Saint Vincents" or "Appellees"). For the reasons set forth below, the order of the Bankruptcy Court is AFFIRMED.

I.Background*fn1

The following facts are not disputed unless otherwise noted.

Narumanchi is a medical doctor and a former employee of Saint Vincents. (Appellant's Br. at 3.) He worked at Saint Vincents from July 1, 2008 to December 31, 2009. (Id.) While employed there, he was a member of the Committee of Interns and Residents ("CIR"), a collective bargaining unit that was a party to a collective bargaining agreement ("CBA") with Saint Vincents. (Appellees' Br. at 3.) Narumanchi was terminated effective December 31, 2009. (Appellant's Br. at 3.) The circumstances of his termination are disputed. Appellant asserts that he was terminated "arbitrarily and illegally," (id. at 3), while Appellees reply that he was terminated due to "inappropriate and unprofessional behavior." (Appellees' Br. at 3.)

At Narumanchi's request, CIR filed a grievance against Saint Vincents relating to his termination and requested that it be heard in front of an external-or neutral-arbitrator. (Bankr. Doc. 1887 at 6.)*fn2 CIR and Saint Vincents thereafter agreed to adjourn the arbitration pending confidential negotiations to resolve the grievance. (Appellees' Br. At 3.) Those negotiations resulted in a proposed settlement that was rejected by Narumanchi. (Bankr. Doc. 1968 at 3;

Appellant's Br. at 4.)*fn3 As a result of Narumanchi's rejection of the offer, CIR withdrew its request for arbitration and informed Narumanchi of its action on March 18, 2011. (Appellant's Br. at 4.) CIR confirmed its decision by letter to Appellees dated May 27, 2011. (Bankr. Doc. 1968 at 4.)

On April 14, 2010, Saint Vincents filed for Chapter 11 bankruptcy protection. (Bankr. Doc. 1887 at 6.) Narumanchi first filed a proof claim with the Bankruptcy Court on September 24, 2010 in the amount of $24,700. (Bankr. Doc. 1968 at 4.) This claim was filed prior to the October 12, 2010 bar date set by the Bankruptcy Court. (Id. at 4 n.3.) On April 1, 2011, Narumanchi filed a revised claim in the amount of $1,524,700. (Id.)

On August 1, 2011, Narumanchi filed a motion with the Bankruptcy Court for relief from the automatic stay imposed by §362(a) of the Bankruptcy Code, to compel CIR and Saint Vincent to arbitration, and to allow him to pursue his claims against Saint Vincent in state or federal court. (Bankr. Doc. 1887.) Saint Vincents objected and responded to Narumanchi's request by a brief filed on September 2, 2011. (Bankr. Doc. 1968.) In its response, Saint Vincents argued that a lift of the automatic stay was not appropriate because: (1) Narumanchi waived his right to arbitration when CIR withdrew from arbitration; (2) Narumanchi could file an unfair labor practices action directly with the National Labor Relations Board ("NLRB")-which proceedings are exempt from the automatic stay provisions; and (3) pursuant to the Second Circuit's decision in Sonnax Indus., Inc. v. Tri-Component Prods. Corp., 907 F.2d 1280 (2d Cir. 1990), Narumanchi was unable to establish the requisite cause to merit lifting of the automatic stay. (Bankr. Doc. 1968 at 5-9.) Specifically, Saint Vincents argued the requested relief should not be granted on the basis of Sonnax Factors 4, 7 and 12. (Id. at 9.)

The Bankruptcy Court held a hearing on Narumanchi's motion on September 15, 2011, at which he was allowed to participate by telephone because he lives in Hawaii. (See Tr. of Hr'g, Appellant's Br., Ex. E.) At the hearing, the Bankruptcy Court denied Narumanchi's motion to lift the stay, holding, in relevant part, that a lift of the stay was not appropriate to allow Narumanchi to compel arbitration or initiate a law suit against Saint Vincents on the basis of Sonnax Factors 7 (whether litigation in another forum would prejudice the interest of other creditors) and 12 (the impact of the stay on the parties and balance of harms). (Appellant's Br., Ex. E at 51-53.)

The Bankruptcy Court made no ruling as to whether or not Narumanchi could proceed against Saint Vincents before the NLRB, as Saint Vincents conceded that such an action was excepted from the automatic stay provisions. (Id. at 46, 53.) The Bankruptcy Court entered its order denying the lift stay motion on September 20, 2011. (Id., Ex. A.) Appellant timely filed his notice of appeal on September 26, 2011. (Bankr. Doc. 2037.)

II.Discussion

A.Standard of Review

This Court has jurisdiction to hear appeals from decisions of a bankruptcy court pursuant to 28 U.S.C. ยง 158(a), which provides in relevant part that "[t]he district courts of the United States shall have jurisdiction to hear appeals . . . from final judgments, orders, and decrees; . . . [and,] with leave of ...


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