Case No. 01-33243, Adv. Proc. No. 02-3031United States Bankruptcy Court, E.D. Tennessee
May 14, 2002
Robert M. Bailey, Esq., BAILEY, ROBERTS BAILEY, PLLC, Knoxville, Tennessee, John A. Walker, Jr., Esq., WALKER WALKER, P.C., Knoxville, Tennessee, Attorneys for Plaintiff.
HARRY S. MATTICE, JR., ESQ., UNITED STATES ATTORNEY, Pamela G. Steele, Esq., Howard H. Baker, Jr., Knoxville, Tennessee, S. SHEA LUNA, ESQ., UNITED STATES DEPARTMENT OF ENERGY, Office of Chief Counsel, Oak Ridge, Tennessee, Attorneys for Defendant.
MEMORANDUM ON DEFENDANT’S MOTION TO DISMISS
RICHARD STAIR, JR., Bankruptcy Judge
Before the court is the Defendant’s Motion to Dismiss, filed on March 15, 2002, requesting dismissal of the Plaintiff’s breach of contract Complaint on jurisdictional and sovereign immunity grounds.
Section 106 of the Bankruptcy Code provides for a limited waiver of governmental immunity. See 11 U.S.C.A. § 106 (West Supp. 2001). The Plaintiff contends that immunity has been waived in this adversary proceeding pursuant to § 106(a), which provides in material part that the court may determine controversies relating to turnover of property by governmental entities. See 11 U.S.C.A. § 542(a), (b) (West 1993) (mandating turnover of property of the estate, including debts). This argument fails, however, because § 542 is a basis for abrogation of sovereign immunity only in situations where the purported debt has already been reduced to judgment. See William Ross, Inc. v. Biehn Constr., Inc. (In re William Ross, Inc.), 199 B.R. 551, 554
(Bankr.W.D.Pa. 1996); see also Tri County Home Health Servs., Inc. v. United States Dep’t of Health Human Servs. (In re Tri County Home Health Servs., Inc.), 230 B.R. 106, 112 n. 2 (Bankr.W.D.Tenn. 1999) (“[A]s a matter of law, [disputed contract] funds cannot be subject to turnover.”).
The present Complaint seeks solely a judgment for heretofore unliquidated damages. Accordingly, § 542 is not yet implicated in this proceeding and cannot be a basis for waiver of the Defendant’s sovereign immunity. See id. The Plaintiff suggests no other avenue by which waiver has occurred.[1]
For the above reasons, the Plaintiff’s Complaint filed February 8, 2002, will be dismissed. An appropriate order will be entered.
BY THE COURT
ORDER
For the reasons stated in the Memorandum on Defendant’s Motion to Dismiss filed this date, the court directs that the Defendant’s Motion to Dismiss filed on March 15, 2002, is GRANTED. The Plaintiff’s Complaint filed February 8, 2002, is DISMISSED.
SO ORDERED.