In Roy v. Garden Ridge, LP, Case No. A06-A-2065 (December 5, 2006), plaintiffs filed a personal injury suit against the defendant. The defendant subsequently filed a Chapter 11 Bankruptcy petition, staying the tort case. Defendant’s plan of reorganization was confirmed. Defendant then filed a motion for summary judgment in state court on the grounds that the confirmed plan discharged the plaintiffs’ tort claims. The trial court granted summary judgment and the plaintiffs appealed.
The Court of Appeals affirmed. Pursuant to 11 USC § 1141 and § 524(a), the plan discharged the tort claim and a discharge injunction was automatically issued. The plaintiffs argued that the discharge injunction should not be given effect because they were not provided notice of the bar date for filing claims, in violation of their due process rights. The court, however, held that Bankruptcy law preempted state law and the trial court could not dissolve the discharge injunction even if the plaintiffs’ due process rights were violated. The plaintiffs would have to pursue that remedy in Bankruptcy Court.
The court also held that the trial court had concurrent jurisdiction to determine whether the plaintiffs’ claims were within the cope of the discharge injunction. However, the plaintiffs did not dispute that their claim was within the scope of the injunction.