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WRS, Inc. v. Plaza Entertainment

April 4, 2005

WRS, INC., D/B/A WRS MOTION PICTURE LABORATORIES, A CORPORATION, APPELLANT
v.
PLAZA ENTERTAINMENT, INC., A CORPORATION; ERIC PARKINSON, AN INDIVIDUAL; CHARLES VON BERNUTH; JOHN HERKLOTZ, AN INDIVIDUAL



On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 00-cv-02041) District Judge: Honorable William L. Standish

The opinion of the court was delivered by: Sloviter, Circuit Judge.

PRECEDENTIAL

Argued October 7, 2004

Before: SLOVITER, VAN ANTWERPEN, and COWEN, Circuit Judges.

OPINION OF THE COURT

WRS, Inc. appeals from an order of the District Court entered September 15, 2003 denying its Motion to Reopen. The District Court held that the case had already been dismissed without prejudice and that WRS must file a new action against defendants to pursue the claims asserted in its original complaint. It appears that both parties and the District Court were proceeding on the assumption that the original case had been dismissed. That assumption, although not unreasonable, was erroneous. Therefore, we must dismiss the appeal from the order of the District Court denying the Motion to Reopen.

I.

WRS, through counsel Thomas E. Reilly, filed a complaint on October 13, 2000 in the United States District Court for the Western District of Pennsylvania against Plaza Entertainment, Inc. ("Plaza"), Eric Parkinson, Charles von Bernuth, and John Herklotz, invoking federal jurisdiction on the basis of diversity of citizenship. WRS alleged that Plaza had failed to pay WRS for duplicating various film and video titles and that the individual defendants were liable on their guaranties of Plaza's obligations to WRS for the duplication services. The complaint sought money damages, declaratory relief, and "foreclosure of its security interest in the property of Plaza," including Plaza's right to exploit the titles at issue. Parkinson, von Bernuth, and Herklotz filed answers to the complaint; Plaza answered and filed a counterclaim.

Thereafter, on August 24, 2001, WRS filed a Chapter 11 bankruptcy proceeding in the United States Bankruptcy Court for the Western District of Pennsylvania. It appears that no counsel was appointed for WRS in the bankruptcy proceeding and Reilly filed a motion to withdraw as WRS' counsel in this case on December 13, 2001, explaining that he did so because under 11 U.S.C. § 327(a), a Chapter 11 debtor must have court approval to hire professionals, including attorneys.

The District Court granted Reilly's motion to withdraw on February 14, 2002, and entered the following order:

1. Plaintiff WRS, Inc. d/b/a/ WRS Motion Picture Laboratories, is in bankruptcy and is not represented by counsel in the above-captioned action. It appears that no further action may be taken by the court at this time. The Clerk shall accordingly mark the above-captioned case as closed. Nothing contained in this order shall be considered a dismissal or disposition of this action, and should further proceedings therein become necessary or desirable, any party may initiate the same in the same manner as if this order had not been entered.

2. In the event that counsel does not enter an appearance for plaintiff on or before March 15, 2002, the above-captioned action will be dismissed without prejudice.

App. at 4-5 (emphasis added).

After receiving permission to withdraw, Reilly withdrew his appearance on behalf of WRS; no other counsel entered an appearance on behalf of WRS on or before March 15, 2002. No action was taken in this case until August 20, 2003, when Reilly filed a Motion to Reopen the case. *fn1 The District Court denied WRS' Motion to Reopen by Memorandum Order dated September 15, 2003. In that order, the District Court stated that the "case was dismissed without prejudice [and] [t]herefore, if WRS wishes to pursue the claims asserted in its October 13, 2000 complaint, WRS must file a new ...


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