McArthur Dairy, Inc. v. Rodriguez
Docket: No. 97-399
Court: District Court of Appeal of Florida; July 8, 1998; Florida; State Appellate Court
In October 1993, McArthur Dairy filed a lawsuit against R.P.D.A. Inc. and its principal stockholder, Fernando Rodriguez, alleging non-payment for goods and claiming Rodriguez's role as a guarantor for the corporation's debts. R.P.D.A. later sought Chapter 11 bankruptcy protection, with McArthur acting as an unsecured creditor and member of the Official Unsecured Creditors Committee. In state court, McArthur obtained a severance of its case to proceed solely against Rodriguez, culminating in a Final Judgment by Consent against him for $29,628.48 in December 1994. In February 1995, a settlement was reached between R.P.D.A., Rodriguez, and the Unsecured Creditors Committee, which included a General Release favoring Rodriguez, later approved by the Bankruptcy Court. In April 1995, Rodriguez moved to dismiss the state judgment, arguing the General Release absolved him of individual liability to McArthur. The circuit court agreed and dismissed the judgment based on this interpretation. However, the appellate court disagreed, stating that the Final Judgment by Consent remained valid and that the General Release pertained only to claims the Unsecured Creditors Committee had against Rodriguez. The court emphasized that the Bankruptcy Court did not vacate any existing judgments against Rodriguez, thus reversing the circuit court's decision and instructing it to reinstate the Final Judgment in favor of McArthur. The appellate court noted that it was unnecessary to address whether a Bankruptcy Court can release non-debtor third parties, as opinions among federal courts on this issue are divided.