Opinion

In re: Kimble

Court: District Court, S.D. Texas
Filed: Aug 10, 2023
Cited by: 0 cases
Authority: More cited than 32.0%

“The filing of a proof of claim ordinarily does not commence an adversary proceeding, even if priority is also claimed.”

How later courts described this case

“The filing of a proof of claim ordinarily does not commence an adversary proceeding, even if priority is also claimed.”
vacating bankruptcy court’s orders denying class certification and dismissing an adversary complaint and remanding for entry of more thorough findings of fact and conclusions of law
“Given the unequivocal language of Langenkamp . . . as to the effect of filing a proof of claim, I do not believe that a creditor can, for strategic reasons, reverse the result it triggered by filing a proof of claim by later withdrawing the claim.”

Written by the judges who cited it.

The opinion

UNITED STATES DISTRICT COURT August 10, 2023

SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

In re SEADRILL LIMITED, et al., §

Debtors. §

§ CIVIL ACTION NO. 4:22-CV-3267

COREY KIMBLE, et al., § ADVERSARY CASE NO. 21-3448

Appellants. §

MEMORANDUM OPINION AND ORDER

This is a bankruptcy appeal. The appellant, Corey Kimble (“Kimble”), is a former

employee of one of the debtors, Seadrill Americas, Inc.1 Kimble filed an adversary

complaint in which he, on behalf of a putative class, accused Seadrill of violating the

Worker Adjustment Retraining and Notification Act (“the WARN Act”). Because Kimble

also filed and then withdrew a class proof of claim in Seadrill’s bankruptcy, the bankruptcy

court granted Seadrill’s motion for judgment on the pleadings and dismissed Kimble’s

adversary proceeding with prejudice. Kimble is appealing that dismissal, and the Court

VACATES the bankruptcy court’s judgment and REMANDS to the bankruptcy court for

reconsideration in light of this opinion. See In re TWL Corp., 712 F.3d 886, 900–01 (5th

Cir. 2013) (vacating bankruptcy court’s orders denying class certification and dismissing

an adversary complaint and remanding for entry of more thorough findings of fact and

conclusions of law).

1 Seadrill Americas, Inc. is one of several affiliated debtors, and the Court will refer to them

collectively as “Seadrill.”

I. BACKGROUND

Seadrill filed a voluntary Chapter 11 bankruptcy petition on February 10, 2021.

(Dkt. 2-8 at pp. 1–25). The bankruptcy court entered an order setting June 14, 2021 as the

claims bar date. (Dkt. 2-8 at pp. 303–04, 314). On the claims bar date, Kimble filed two

documents. The first document was an adversary complaint in which Kimble sought to

represent a class of former employees of Seadrill who had allegedly been terminated in

violation of the WARN Act.2 (Dkt. 2-6 at pp. 1–32). The second document was a proof of

claim form that Kimble filed in Seadrill’s bankruptcy proceeding. (Dkt. 9 at p. 26).

Kimble’s proof of claim form listed the current creditor as “Corey Kimble as Class

Claimant[;]” listed the basis of the claim as “violations of the [WARN] Act[;]” and

included Kimble’s adversary complaint as supporting documentation. (Dkt. 9 at pp. 5–26).

Kimble filed a jury demand in his adversary proceeding, and the demand indicated

that he “d[id] not consent to having a jury trial conducted by a bankruptcy judge[.]” (Dkt.

2-6 at pp. 45–46). Seadrill moved to strike Kimble’s jury demand, arguing that there is no

right to a jury trial under the WARN Act and that, regardless, Kimble had waived any right

to a jury trial by filing his proof of claim in Seadrill’s bankruptcy. (Dkt. 2-6 at pp. 62–70).

On August 18, 2021, Kimble withdrew his proof of claim. (Dkt. 2-6 at p. 97). Kimble then

contended in his response to Seadrill’s motion to strike that the withdrawal of the proof of

claim “revived his right to a trial by jury[.]” (Dkt. 2-6 at p. 90). Two months later, on

2 “The WARN Act prohibits an employer from ordering a plant closing or mass layoff until the

end of a sixty-day period after the employer serves written notice of such an order to affected

employees.” Easom v. US Well Services, Inc., 37 F.4th 238, 241 (5th Cir. 2022) (quotation marks

and brackets omitted).

October 11, 2021, Kimble filed a motion to withdraw the reference to the bankruptcy

court.3 (Dkt. 2-6 at pp. 99–105). In his motion to withdraw the reference, Kimble argued

that withdrawal of the reference to bankruptcy court was mandatory for two independent

reasons: (1) he had pled claims under the WARN Act; and (2) he “ha[d] demanded a trial

by jury” and had “not consent[ed] to a jury trial before the bankruptcy court[.]” (Dkt. 99–

105).

On October 26, 2021, the bankruptcy court entered an order confirming Seadrill’s

reorganization plan. (Dkt. 2-18 at pp. 131–263). The confirmation order contained

injunction and discharge language that took effect on February 22, 2022, the effective date

of the plan. (Dkt. 2-18 at pp. 165–68, 264). The injunction and discharge language provided

that Seadrill’s reorganization plan effectuated a “complete satisfaction, discharge, and

release . . . of Claims . . . , Interests, and Causes of Action of any nature whatsoever” and

enjoined “all Entities” from pursuing released claims. (Dkt. 2-18 at pp. 165–68).

On May 24, 2022, three months after Seadrill’s reorganization plan took effect, the

bankruptcy court held a hearing on several motions, including Kimble’s motion to

withdraw the reference to the bankruptcy court and Seadrill’s motion to strike the jury

3 Many federal district courts, including this one, have issued general orders of reference that refer

all bankruptcy cases and proceedings to the bankruptcy court. See In re American Community

Services, Inc., 86 B.R. 681, 684 (D. Utah 1988); In re All-Tex Staffing & Personnel, Inc., 599 B.R.

289, 301 (Bankr. S.D. Tex. 2019). 28 U.S.C. § 157(d) allows a district court to withdraw the

reference of a particular bankruptcy case or proceeding to the bankruptcy court and exercise its

original jurisdiction over the matter. In re American Community, 86 B.R. at 685. In this district,

motions to withdraw the reference are typically presented to the presiding bankruptcy judge for

recommendation before they are presented to the district court. Levine v. M&A Custom Home

Builder & Developer, LLC, 400 B.R. 200, 206 n.1 (S.D. Tex. 2008). The statutes and caselaw have

set out standards that courts use to determine when withdrawal is appropriate. Id. at 202–03.

demand in Kimble’s adversary proceeding. (Dkt. 2-7 at pp. 45–117). During the hearing,

the bankruptcy court expressed concern that Kimble, by filing and withdrawing his proof

of claim in the manner in which he did, had waived his right to a jury trial in his adversary

proceeding under Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), and its progeny4

and had perhaps closed off other avenues of possible recovery under the language of

Seadrill’s reorganization plan. The bankruptcy court first noted in its discussion with

Seadrill’s counsel that it was construing Kimble’s adversary complaint as an informal proof

of claim,5 even though Kimble had timely filed both his adversary complaint and his proof

of claim:

And also I’ve always wondered if you withdraw a proof of claim—because

the proof of claim actually takes precedent over any informal proof of claim,

which is what the lawsuit is. And forget for a second whether or not that

lawsuit could be filed at all—and you haven’t really objected to that, and

maybe there’s no reason to object to it. But the proof of claim takes precedent

over an informal proof of claim. I think that’s black letter law.

So if the proof of claim has been withdrawn, does that now mean there’s just

nothing there? And is the lawsuit—because of the withdrawal of that claim,

4 In Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), and Langenkamp v. Culp, 498 U.S. 42

(1990), the Supreme Court analyzed whether bankruptcy creditors were entitled to jury trials in

avoidance actions brought by bankruptcy trustees. In Granfinanciera, the creditors had not filed

proofs of claim in the bankruptcy and were accordingly entitled to a jury trial. Granfinanciera,

492 U.S. at 36–37, 58–59 & n.14. In Langenkamp, on the other hand, the creditors had filed proofs

of claim in the bankruptcy and were accordingly not entitled to a jury trial. Langenkamp, 498 U.S.

at 44–45 (“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. . . . As such, there is no Seventh Amendment right to a

jury trial.”) (quotation marks omitted).

5 “In order to prevent the harsh result that can occur when a creditor misses a claims bar date, the

courts have developed the doctrine of the ‘informal proof of claim[.]’” In re Scott, 227 B.R. 832,

833–34 (Bankr. S.D. Ind. 1998). Under that doctrine, “courts have deemed something other than

a proof of claim to be an ‘informal proof of claim’ which may be amended.” Id. (quoting 9 Collier

on Bankruptcy, paragraph 3001.06(1)).

is that lawsuit somehow estopped from proceeding because there’s no claim

against the debtor?

Dkt. 2-7 at p. 83.

The bankruptcy court then explained to Kimble’s counsel:

I’m worried about in your effort to escape me that you’ve really done

something to your clients because of the plan language. And I’m trying to

figure out the meaning of where you file a proof of claim, you then withdraw

it, and the effect of not having a proof of claim on file does to your lawsuit.

. . .

The hard thing is where the proof of claim is the lawsuit, and the proof of

claim is withdrawn after the lawsuit is filed, and done—and again, I’m not

complaining. I mean, I’m sure I did it, too, in my days of standing where you

are now, is when you’re trying to pick your forum, you know, you make

those decisions. I got all that.

This is not a bad faith/good faith issue. I’m just trying to work my way

through what the outcome is. Because, again, I’m bothered by the fact that

when you start walking through this, even if I accept your premise all the

way up to the filing of the adversary, you’ve walked down a really dangerous

path in terms of what the effects are.

And I just—I’m worried about that, because quite frankly, if your clients are

owed money, I want them to be paid. And again, I’m worried that you’ve

somehow affected their ability to recover by a shortsighted view of we really

don’t want to be in front of [the bankruptcy court], we want to be in front of

a district court, you know, because it’s a different mindset. I got all of that.

But I’m troubled by it, just because I’m trying to understand what it means.

But—I mean, you understand the waiver argument that came out of

Granfinanciera, right? I mean, it’s—you understand the waiver argument

that came out of Granfinanciera, right? That’s—no question about what that

says?

Dkt. 2-7 at pp. 85, 87–88.

Kimble’s counsel told the bankruptcy court that he understood the Granfinanciera

waiver argument and would “have to give that some careful thought.” (Dkt. 2-7 at p. 88).

The bankruptcy court took the matters under advisement and offered to reserve its

rulings until the parties had had an opportunity to confer and attempt to resolve the

outstanding issues. (Dkt. 2-7 at pp. 113–17). The parties filed two stipulations over the next

two months. On June 28, 2022, the parties jointly filed a stipulation in which Kimble

expressly waived his right to a jury trial in the adversary proceeding:

Kimble hereby irrevocably waives his right to trial by jury on the [WARN

Act claim that Kimble brought in his adversary proceeding] in all forums and

withdraws his Jury Demand with prejudice.

Dkt. 2-7 at pp. 123–25.

On July 22, 2022, the parties jointly filed a stipulation abating Kimble’s motion to

withdraw the reference6 until the parties could brief and argue a motion to dismiss Kimble’s

adversary proceeding under Federal Rule of Civil Procedure 12 that Seadrill intended to

file. (Dkt. 2-7 at pp. 137–39).

After the parties filed their stipulations, Seadrill filed a motion for judgment on the

pleadings under Rule 12(c). (Dkt. 2-7 at pp. 147–61). Seadrill’s argument for dismissal of

Kimble’s adversary proceeding was effectively summarized in the motion’s closing

paragraph:

Kimble filed the Proof of Claim and Complaint seeking to recover on the

same claims. [Kimble] then relinquished his right to recover on those claims

by withdrawing the Proof of Claim and failing to file a valid request for

administrative payment. [Seadrill’s confirmed reorganization plan]

discharged the claims asserted in [the] Complaint and the discharge has a

final, preclusive effect. Kimble is not entitled to recover on his claim and is

6 The July 22, 2022 stipulation acknowledged that one of Kimble’s two asserted grounds for

withdrawal—his jury demand—was rendered moot by his prior express waiver of his right to a

jury trial. (Dkt. 2-7 at p. 139). The stipulation preserved Kimble’s other argument for withdrawal,

which was that withdrawal was mandatory because Kimble had pled claims under the WARN Act.

(Dkt. 2-7 at p. 139).

enjoined from continuing to prosecute the Complaint. The Complaint should

immediately be dismissed with prejudice.

Dkt. 2-7 at p. 161.

Kimble responded to Seadrill’s Rule 12 motion with five arguments: (1) Seadrill

was “judicially estopped” from claiming that “Kimble’s claims [we]re impaired by the

company’s bankruptcy proceeding” because Seadrill had previously represented to the

bankruptcy court that a different adversary proceeding “w[as] not impaired” by the

company’s bankruptcy proceeding and “could have been filed in the district court[;]” (2)

dismissal was inappropriate because Kimble had modeled his litigation strategy on that of

the plaintiff in In re TWL Corp., 712 F.3d 886 (5th Cir. 2013); (3) the injunction and

discharge language contained in Seadrill’s reorganization plan did not bar Kimble’s

WARN Act claims because “the filing of legal actions within the bankruptcy court do[es]

not violate . . . orders of a bankruptcy court[;]” (4) Seadrill had waived the affirmative

defense of res judicata; and (5) in the alternative, Kimble’s adversary complaint qualified

as an informal proof of claim that had not been withdrawn. (Dkt. 2-7 at pp. 165–75;

emphasis in Kimble’s briefing).

The bankruptcy court held a hearing on Seadrill’s motion for judgment on the

pleadings. (Dkt. 9 at pp. 28–44). After hearing the parties’ arguments, the bankruptcy court

granted Seadrill’s motion and dismissed Kimble’s adversary proceeding with prejudice,

agreeing with Seadrill that Kimble had lost his right to recover on his WARN Act claims

by withdrawing his proof of claim:

The issue then becomes how do you treat the actions that happened in the

adversary. Adversary was filed. There was then an attempt—or there was a

withdrawal of the proof of claim. The issue is what did that mean. Now,

clearly, it was not following another case. It was a deliberate attempt to divest

this Court of jurisdiction by being able to assert a jury trial right. That’s the

only reason it was done.

. . .

Here, you have an adversary on file. You then have the withdrawal of the

proof of claim that is based upon the adversary. It can only mean one thing.

Again, I also get to consider the purpose for which it was filed. The discharge

injunction says what it says. There isn’t a genuine dispute about what it

means, what the effective date means, how this process all works.

For those reasons, and those are my findings and conclusions on the record

pursuant to Bankruptcy Rule 7052, the motion for judgment on the pleadings

is granted.

Dkt. 9 at pp. 42–43.

The bankruptcy court signed an order memorializing its bench ruling, but neither

the bench ruling nor the signed order cited any legal authority. (Dkt. 2-7 at p. 197). Kimble

filed this appeal. (Dkt. 2-7 at p. 203).

II. BANKRUPTCY APPEALS AND RULE 12(c)

Federal district courts have jurisdiction to hear appeals from the final judgments of

bankruptcy judges. 28 U.S.C. § 158(a). An appeal to a district court from the bankruptcy

court “shall be taken in the same manner as appeals in civil proceedings generally are taken

to the courts of appeals from the district courts[.]” 28 U.S.C. § 158(c)(2). This Court

reviews the bankruptcy court’s legal conclusions de novo but may only disregard a fact

finding made by the bankruptcy court if that fact finding is clearly erroneous. In re Perry,

345 F.3d 303, 309 (5th Cir. 2003).

In this case, the bankruptcy judge granted Seadrill’s motion for judgment on the

pleadings under Federal Rule of Civil Procedure 12(c). (Dkt. 2-7 at p. 197). The standard

for dismissal under Rule 12(c) is the same as that for dismissal for failure to state a claim

under Federal Rule of Civil Procedure 12(b)(6). Johnson v. Johnson, 385 F.3d 503, 529

(5th Cir. 2004). A complaint can be dismissed under Rule 12(b)(6) if the factual allegations

it contains, taken as true, do not state a claim that is plausible on its face. Amacker v.

Renaissance Asset Mgmt., LLC, 657 F.3d 252, 254 (5th Cir. 2011). As the Fifth Circuit has

further clarified:

A claim has facial plausibility when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged. This includes the basic requirement that the

facts plausibly establish each required element for each legal claim.

However, a complaint is insufficient if it offers only labels and conclusions,

or a formulaic recitation of the elements of a cause of action.

Coleman v. Sweetin, 745 F.3d 756, 763–64 (5th Cir. 2014) (quotation marks

and citations omitted).

When considering a motion to dismiss under Rule 12(b)(6), the Court’s review is

limited to the complaint; any documents attached to the complaint; any documents attached

to the motion to dismiss that are central to the claim and referenced by the complaint; and

matters subject to judicial notice under Federal Rule of Evidence 201. Allen v. Vertafore,

Inc., 28 F.4th 613, 616 (5th Cir. 2022); George v. SI Group, Inc., 36 F.4th 611, 619 (5th

Cir. 2022). Motions to dismiss under Rule 12(b)(6) are viewed with disfavor and are rarely

granted. Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011).

III. ANALYSIS

On appeal, Kimble raises the same arguments that he raised before the bankruptcy

court. At this juncture, the Court need only discuss some of those arguments. To summarize

its discussion below, the Court does not agree with Kimble’s contention that Seadrill was

judicially estopped from arguing that Kimble’s withdrawal of his proof of claim barred his

recovery. The Court further disagrees with Kimble’s contention that Seadrill waived the

ability to argue res judicata. Moreover, the Court concludes, as did the bankruptcy court,

that Kimble submitted to the bankruptcy court’s jurisdiction by filing a proof of claim.

However, it is unclear to the Court why Kimble’s withdrawal of his proof of claim

mandated, as a matter of law, dismissal with prejudice of his adversary proceeding.

—Judicial estoppel

Kimble first contends that the Court should reverse the bankruptcy court because

“Seadrill is judicially estopped from claiming that Kimble’s claims were impaired by its

bankruptcy petition.” (Dkt. 6 at p. 16). The Court disagrees.

i. The judicial estoppel doctrine

Judicial estoppel “is an equitable doctrine invoked by a court at its discretion” for

the purpose of “protect[ing] the integrity of the judicial process.” New Hampshire v.

Maine, 532 U.S. 742, 749-50, 121 S. Ct. 1808, 149 L. Ed. 2d 968 (2001) (internal quotation

marks omitted). “[T]he Supreme Court has refused to establish inflexible prerequisites or

an exhaustive formula for determining the applicability of judicial estoppel . . . .” Reed v.

City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (en banc) (internal quotation marks

omitted); see also Wright & Miller, Preclusion of Inconsistent Positions—Judicial

Estoppel, 18B Fed. Prac. & Proc. Juris. § 4477 (2d ed. 2015) (“[Courts focus on] whether

allowing a party to take seemingly inconsistent positions in separate actions would enable

the party to gain an unfair advantage.”); 18 James Wm. Moore et al., Moore’s Federal

Practice § 134.31 at 73 (3d ed. 2011) (“[The doctrine] should be applied flexibly, with an

intent to achieve substantial justice.”).

In determining whether to apply the judicial estoppel doctrine, courts may consider

whether: “(1) the party against whom judicial estoppel is sought has asserted a legal

position which is plainly inconsistent with a prior position; (2) a court accepted the prior

position; and (3) the party did not act inadvertently.” Reed, 650 F.3d at 574. However,

“[b]ecause judicial estoppel is equitable in nature, trial courts are not required to apply it

in every instance that they determine its elements have been met.” United States ex rel.

Long v. GSDMIdea City, L.L.C., 798 F.3d 265, 271 (5th Cir. 2015) (emphasis removed).

Rather, courts should determine if applying judicial estoppel is appropriate after

considering the specific facts of each case and the doctrine’s purposes of “protect[ing] the

integrity of the judicial process,” preventing litigants from “playing fast and loose with the

courts,” and avoiding unfair results and unseemliness. Id. at 271–72; see also Reed, 650

F.3d at 574; In re Coastal Plains, Inc., 179 F.3d 197, 205–06 (5th Cir. 1999). “The doctrine

is generally applied where intentional self-contradiction is being used as a means of

obtaining unfair advantage in a forum provided for suitors seeking justice.” In re Coastal

Plains, 179 F.3d at 206 (quotation marks omitted). Notably, “the doctrine is intended to

protect the judicial system, rather than the litigants[.]” Id. at 205 (emphasis in In re Coastal

Plains).

ii. Kimble’s contentions

Kimble argues that Seadrill has asserted positions in this case that are inconsistent

with positions that it took in a different adversary proceeding, Fields v. Seadrill Americas,

Inc., Southern District of Texas bankruptcy case number 21-3445. Specifically, in Fields,

Seadrill jointly moved with the plaintiff to withdraw the reference of that matter to the

bankruptcy court; in their joint motion, the parties explained to the bankruptcy court that:

Plaintiff filed the instant adversarial proceeding against [Seadrill] on June

14, 2021, alleging that [Seadrill is] liable to Plaintiff for damages under Title

VII and 42 U.S.C. § 1981. Because Plaintiff has a right to a jury trial as to

certain claims and has demanded the same, Fifth Circuit precedent requires

that the reference be withdrawn. Additionally, Plaintiff’s claims are for

conduct that allegedly occurred after the bankruptcy petition was filed.

Furthermore, Plaintiff’s claims were not required to have been brought

before [the bankruptcy court], but rather, could have been properly asserted

in the United States District Court for the Southern District of Texas[.]

Finally, the Plaintiff and [Seadrill] have agreed that justice would be served

by a transfer to the District Court.

Dkt. 2-22 at p. 7.

Kimble contends that, having previously taken the stance that transfer of the Fields

case to the district court was appropriate because the Fields plaintiff was suing for alleged

post-bankruptcy-petition conduct, Seadrill cannot now stand by its assertion that the

bankruptcy court properly dismissed Kimble’s claims, which are also based on alleged

post-bankruptcy-petition conduct. (Dkt. 6 at pp. 15–16).

iii. Analysis

The Court disagrees with Kimble. The Court will not apply the doctrine of judicial

estoppel under these circumstances,7 and the bankruptcy court did not abuse its discretion

in refusing to do so. There is at least one potentially crucial factual difference between this

case and Fields, and on account of that distinction there is “no genuine inconsistency”

7 “[A] court, even an appellate court, may raise [judicial] estoppel on its own motion in an

appropriate case.” Matter of Cassidy, 892 F.2d 637, 641 (7th Cir. 1990).

between Seadrill’s position in Fields and its position here. See DK Joint Venture 1 v.

Weyand, 649 F.3d 310, 318 (5th Cir. 2011) (declining to apply judicial estoppel to a party

who moved to compel arbitration in one case and resisted arbitration in another case

because the facts of the cases differed on the issue of whether the parties resisting

arbitration were signatories to the contracts containing the arbitration provisions).

To reiterate, Seadrill’s argument for dismissal of Kimble’s adversary proceeding, as

summarized in its motion for judgment on the pleadings, was this:

Kimble filed the Proof of Claim and Complaint seeking to recover on the

same claims. [Kimble] then relinquished his right to recover on those claims

by withdrawing the Proof of Claim and failing to file a valid request for

administrative payment. [Seadrill’s confirmed reorganization plan]

discharged the claims asserted in [the] Complaint and the discharge has a

final, preclusive effect. Kimble is not entitled to recover on his claim and is

enjoined from continuing to prosecute the Complaint. The Complaint should

immediately be dismissed with prejudice.

Dkt. 2-7 at p. 161.

Seadrill represents in its brief that the Fields plaintiff, by contrast, has not withdrawn

his proof of claim; and Kimble does not contest that representation. (Dkt. 11 at p. 16). In

other words, Seadrill fundamentally based its argument for dismissal of Kimble’s

adversary proceeding on a fact—Kimble’s withdrawal of his proof of claim after the June

14, 2021 claims bar date—that is not present in the Fields case. Considering this possibly

critical factual distinction between the two cases, there is “no genuine inconsistency”

between Seadrill’s position in Fields and its position here, and the Court will neither apply

the doctrine of judicial estoppel nor reverse the bankruptcy court for refusing to do so. Id.

—Res judicata

Kimble also contends that Seadrill waived its res judicata defense by failing to plead

it. On this record, the Court disagrees. As Seadrill points out, Fifth Circuit caselaw allows

courts to raise the res judicata issue sua sponte in two sets of circumstances, either one of

which is sufficient: (1) where the two actions involved in the res judicata analysis were

brought before the same court; and (2) where all of the relevant facts are contained in the

record and all are uncontroverted. Mowbray v. Cameron County, Texas, 274 F.3d 269, 281

(5th Cir. 2001). Here, the bankruptcy court presided over all of the relevant proceedings

and based its decision on uncontroverted procedural facts that were contained in the record

before it. Accordingly, the bankruptcy court was empowered to raise the res judicata issue

despite Seadrill’s failure to plead it.

—The bankruptcy court’s jurisdiction

At oral argument before the bankruptcy court, Kimble’s counsel stated that “the

formal proof of claim that was withdrawn is a legal nullity.” (Dkt. 2-7 at p. 89). To the

extent that Kimble asserts that the withdrawal of his proof of claim removed his adversary

proceeding from the reach of the bankruptcy court’s equity jurisdiction, the Court

disagrees.

By filing a proof of claim, Kimble triggered the process of allowance and

disallowance of claims and, as a result, submitted to the bankruptcy court’s equity

jurisdiction. Langenkamp v. Culp, 498 U.S. 42, 44–45 (1990); see also In re Covia

Holdings Corp., No. 20-3345, 2022 WL 2975078, at *3 (Bankr. S.D. Tex. July 7, 2022),

adopted, 2022 WL 2972276 (S.D. Tex. July 27, 2022) (“[W]hen a litigant files a proof of

claim, it submits the resolution of all matters related to the resolution of that proof of claim

to the [bankruptcy court’s] equitable power and transforms what was a legal dispute into

an equitable proceeding.”). Withdrawing the proof of claim did not revoke that

jurisdictional election. See In re GYPC, Inc., No. 17-31030, 2021 WL 5016129, at *3

(Bankr. S.D. Ohio Oct. 25, 2021) (“Cummings’ choice to submit to this court’s equitable

jurisdiction cannot be undone.”); Seven Counties Services, Inc. v. NextGen Healthcare

Information Systems, Inc., No 3:14-CV-330, 2014 WL 3941789, at *2 (W.D. Ky. Aug. 12,

2014) (“A creditor may retain its right to a jury trial only if the Proof of Claim is withdrawn

prior to the filing of an adversary proceeding against it. . . . Despite its attempt to un-ring

the bell, NextGen has consented to bankruptcy court jurisdiction and has no ground to

procure withdrawal of the reference by this court.”); In re Kimball Hill, Inc., 480 B.R. 894,

904 (Bankr. N.D. Ill. 2012) (“As Wisenbaker did file proofs of claim against certain of the

Debtors, it is within the court’s authority to consider the Second Amended Complaint in

resolving the liability of those claims. Wisenbaker may not withdraw those claims merely

to defeat this court’s authority.”) (citation omitted); In re EXDS, Inc., 301 B.R. 436, 440

(Bankr. D. Del. 2003) (“Given the unequivocal language of Langenkamp . . . as to the

effect of filing a proof of claim, I do not believe that a creditor can, for strategic reasons,

reverse the result it triggered by filing a proof of claim by later withdrawing the claim.”).

The bankruptcy court had jurisdiction over Kimble’s adversary proceeding

notwithstanding Kimble’s withdrawal of his proof of claim.

—Construction of Kimble’s adversary complaint as an informal proof of

claim

All that said, it is unclear to the Court why Kimble’s withdrawal of his proof of

claim mandated, as a matter of law, dismissal with prejudice of his adversary proceeding.

At the hearing on Seadrill’s motion to strike Kimble’s jury demand, the bankruptcy court

noted that it was construing Kimble’s adversary complaint as an informal proof of claim,

even though Kimble had timely filed both his adversary complaint and his proof of claim.

This construction of the complaint evidently formed the cornerstone of the bankruptcy

court’s analysis: