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plans. Significantly, no one, including Perdido Key

Realty,

the

debtor,

or

WCI,

referenced

the

Confidentiality Agreement or intimated that the Confidentiality Agreement was relevant to the confirmation process. At the conclusion of the hearing, the Court confirmed the plan and approved the sale of the Lost Key Property to WCI. In the written order, the Court made a specific finding that WCI was a “good faith purchaser of the debtor’s property through the Purchase Agreement pursuant to Section 363(m) of the Bankruptcy Code” (the “Confirmation Order”) (Doc. No. 287). The debtor and WCI promptly closed on the sale of the Property for $25 million resulting in a 100 percent payment to the debtor’s creditors and a substantial distribution to equity holders.

Much later, on June 1, 2004, Wright sued WCI in Escambia County Circuit Court alleging that WCI breached the Confidentiality Agreement by purchasing the Property from the debtor through the

plan. Wright recently has amended his complaint

include a claim for unjust enrichment. seeking only monetary damages and is not undo the sale.

Wright seeking

to is to

WCI now claims shock at this belated litigation contending that, pursuant to the legal theory of res judicata, the Confirmation Order barred Wright from suing WCI for additional monies in connection with the purchase of the Property. WCI moved to reopen the case, which was granted,3 and then filed

this adversary proceeding. declaratory judgment that the

WCI now seeks a Confirmation Order

bars

the

continuation

of

the

state

court

lawsuit

filed

by Wright and that Wright waived may have against WCI by failing prior to confirmation of the liquidation.

whatever rights he to raise his claims debtor’s plan of

Wright, in response, argues that res judicata does not apply. Wright argues that the Court never considered WCI’s liability under the Confidentiality Agreement in entering the Confirmation Order and that his claims simply are not relevant to the approval of the sale of the Property. Wright never sought to stop the sale. He just seeks monetary damages from WCI for violating the terms of the Confidentiality Agreement, an agreement between only WCI and Wright.

Both WCI and Wright now seek summary judgment as a matter of law (Doc. Nos. 114 and 124). Pursuant to Federal Rule of Civil Procedure 56,

3 The Order Granting Motion to Reopen Chapter 11 Case was entered on June 30, 2004 (Doc. No. 357 in the Main Case).

3

which is applicable under the Federal Rule of Bankruptcy Procedure 7056, a court may grant summary judgment where “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56. The moving party has the burden of establishing the right to summary judgment. Fitzpatrick v. Schlitz (In re Schlitz), 97 B.R. 671, 672 (Bankr. N.D. Ga. 1986). In determining entitlement to summary judgment, a court must view all evidence and make all reasonable inferences in favor of the party opposing the motion. Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (citing Dibrell Bros. Int’l S.A. v. Banca Nazionale Del Lavoro, 38

F.3d 1571, 1578

(11th Cir.

material

factual

dispute

1994)).

Therefore, a

precludes

summary

judgment. Anderson v. Liberty Lobby, Inc., 477 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

U.S. As

summarized above, facts for the Court’s

the parties submitted stipulated consideration in connection with

their

Motions.

No

material

factual

disputes

exist,

and

the one remaining legal summary judgment.

issue

is

ripe

for

resolution

on

The sole legal issue is whether, pursuant to the principles of res judicata, the Confirmation Order and its holding that WCI was a good faith purchaser of the Property bars Wright from suing WCI in Florida state court for breach of the Confidentiality Agreement and for unjust enrichment. The Eleventh Circuit Court of Appeals has issued three significant opinions, two in the last year, which addressed the issue of when a confirmation order entered in a bankruptcy case bars non-debtor parties from later proceeding with litigation in non-bankruptcy forums, Daewoo Motor America, Inc. v. General Motors Corp., 459 F.3d 1249 (11th Cir. 2006), Eastman Kodak Company v. Atlanta Retail, Inc. (In re Atlanta Retail, Inc.), 456 F.3d 1277 (11th Cir. 2006), and Kaiser Aerospace and Electronics Corp. v. Teledyne Industries, Inc. (In re Piper Aircraft Corp.), 244 F.3d 1289 (11th Cir. 2001). In each of these cases, the appellate court focused on the individual and unique facts involved to determine if the earlier and later actions “involved the same nucleus of operative fact, or [are] based upon the same factual predicate.” Piper Air, 244 F.3d at 1297.

Although the crux of the legal test is the same in each of these three cases, i.e., that an identity of “operative facts” bars later litigation on the same facts, the legal theory varies. In Daewoo, the case raised issues of international comity, which are not

relevant here. Atlanta Retail,

However, the Eleventh

in both Piper Air and Circuit Court of Appeals

applied a the effect

traditional res judicata of a bankruptcy court’s

analysis addressing confirmation order.

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