Opinions of the United 2008 Decisions States Court of Appeals for the Third Circuit

12-24-2008

In Re: Brockaway Precedential or Non-Precedential: Non-Precedential

Docket No. 07-2858

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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

___________

No. 07-2858 ___________

IN RE: BROCKAWAY PRESSED METAL, INC., Debtor

EYNON ASSOCIATES, INC., Appellant

v.

LASALLE BANK NATIONAL ASSOCIATION; GENERAL MOTORS CORPORATION; BORGWARNER TORQ TRANSFER SYSTEMS, INC.; DELPHI CORPORATION

____________________________________

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 07-cv-00563) District Judge: Honorable Terrence F. McVerry _________________________

Submitted Pursuant to Third Circuit LAR 34.1(a) on December 8, 2008

Before: MCKEE, SMITH AND ROTH, Circuit Judges

(Opinion filed: December 24, 2008) ___________

OPINION ___________

McKee, J.

Eynon Associates, Inc. appeals the district court’s order affirming the bankruptcy

court’s denial of Eynon’s claim to funds held by LaSalle Bank. For the reasons that

follow, we will affirm.

Inasmuch as we write primarily for the parties who are familiar with this case, we

need not repeat the procedural or factual history except insofar as may be helpful to our

brief discussion.

Eynon argues that it is entitled to the disputed escrow funds pursuant to its contract

for sales commissions with the debtor, Brockway Pressed Metals, Inc. According to

Eynon, the disputed funds are impressed with either an express or constructive trust for

that portion of Brockway’s receivables equal to the commissions Eynon earned on

products that it sold and delivered to certain of Brockway’s customers.

In a Memorandum Opinion dated March 30, 2007, Hon. Thomas P. Agresti,

explained why Eynon had not established the existence of a trust. In affirming the

bankruptcy court’s order denying relief, the district court agreed that Eynon “faile d to

demonstrate two of the four required elements [of a trust] - intent to create a trust and the

existence of an identifiable res.” App. 6. The district court concluded that “the series of

2 commission agreements between the parties do not constitute ‘trust’ documents.” App. 7.

The court rejected Eynon’s reliance on Williams v. Finlaw, Mueller & Co.,

(Pa.

1928), concluding, counsel was “skating close to the bounds of their duty of candor. . .,”

by misstating the holding of Williams. . .”. The bankruptcy court believed that Williams

counseled against finding a trust had been created, and the district court concluded that

“[t]he Bankruptcy Court’s analysis of Williams, was correct.” App. 4.

The district court also correctly affirmed the bankruptcy court’s rejection of the

theory of a “constructive trust” because “no unjust enrichment had occurred.”

(citing

Yohe v. Yohe,

(Pa. 1976)). Thus, establishing a trust over the

disputed funds “would have the effect of giving Eynon preferential treatment in the

bankruptcy proceeding.” App. 5.

We can add little to the thorough and thoughtful discussion of the bankruptcy

court, or the district court’s explanation of why the bankruptcy court properly rejected

Eynon’s claim for relief.

Accordingly, we will affirm substantially for the reasons set forth by the

bankruptcy court and the district court.

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