Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MFG. v. CALVIN KLEIN

May 20, 1998

555 M MANUFACTURING, INC., Plaintiff,
v.
CALVIN KLEIN, INC., et al., Defendants.



The opinion of the court was delivered by: ALESIA

MEMORANDUM OPINION AND ORDER

 Before the court is defendant Calvin Klein, Inc.'s motion for a stay of proceedings or, alternatively, for a more definite statement. For the reasons that follow, the court (1) denies defendant's motion for a stay of proceedings and (2) grants defendant's motion for a more definite statement.

 I. BACKGROUND

 On April 27, 1997, defendant Calvin Klein, Inc. ("CK") and defendant Decorative Home Accents, Inc. ("DHA") entered into a licensing agreement, pursuant to which DHA was granted the night to use CK's trademark. Paragraph 12.1 of that agreement provided that DHA would indemnify CK for "any and all losses, liability, damages, and expenses (including reasonable attorney's fees and expenses) which may arise in connection with [DHA's] performance of this Agreement and transactions arising therefrom." Def.'s Memo. Ex. 1, P 12.1. Paragraph 12.3 of that agreement provided that DHA would "maintain at all times ... a public liability insurance policy, including products liability coverage as well as contractual liability with respect to this Agreement." Id. at P 12.3.

 On August 6, 1997, plaintiff 555 M Manufacturing, Inc. ("555") filed suit against defendants CK and DHA d/b/a Calvin Klein Home, alleging breach of oral and written contracts. This court has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332, as there exists complete diversity between the parties and the amount in controversy exceeds $ 75,000.

 After 555 filed suit, DHA filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. Pursuant to section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a), DHA's filing of bankruptcy operated as an automatic stay of this proceeding insofar as 555 is seeking recovery against DHA. DHA did not request, and the Bankruptcy Court did not order, a stay of this proceeding against CK.

 In response to 555's complaint, defendant CK has filed a motion for a stay of proceedings or, alternatively, for a more definite statement. CK first requests this court to stay the proceedings against CK, arguing that such a stay should be granted pursuant to (1) section 362(a) of the Bankruptcy Code; (2) Federal Rule of Civil Procedure 19; or (3) this court's inherent power. In the event that this court declines to stay the proceedings, CK asks this court to order 555 to provide a more definite statement of its claim pursuant to Federal Rule of Civil Procedure 12(e).

 II. DISCUSSION

 A. CK's motion for a stay of proceedings

 CK has filed a motion for a stay of proceedings, arguing that such a stay should be granted pursuant to (1) section 362(a) of the Bankruptcy Code; (2) Federal Rule of Civil Procedure 19; and (3) the court's inherent power. For the reasons given below, the court finds (1) that CK has failed to establish that a stay is warranted under section 362(a) and (2) that the court cannot determine at this stage of the litigation whether a stay is warranted pursuant to Federal Rule of Civil Procedure 19 or the court's inherent power.

 1. Section 362(a) of the Bankruptcy Code

 CK first argues that the court should stay the case pursuant to section 362(a), the automatic stay provision of the Bankruptcy Code. 555 argues that the automatic stay provision should not extend to CK, a solvent co-defendant, because (1) CK does not have standing to raise this issue and (2) this case does not involve circumstances which would warrant the extension of the automatic stay provision.

 The automatic stay provision of section 362(a) provides for a nearly comprehensive stay of proceedings against the bankruptcy debtor. In re Fernstrom Storage & Van Co., 938 F.2d 731, 735 (7th Cir. 1991). The purposes of section 362 are

 
to protect the debtor from an uncontrollable scramble for its assets, to preclude one creditor from pursuing a remedy to the disadvantage of other creditors, and to provide the debtor and its executives with a reasonable respite from protracted litigation, during which they may ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.