Pirani v. Baharia, No. 15-40538 (5th Cir. 2016)Annotate this Case
The adversary action comprises the claims, counterclaims, and affirmative defenses between two sides of a business scheme to buy, renovate, and operate a Days Inn. This appeal stems from the district court’s order affirming a bankruptcy court judgment rendered after trial in the adversary action. Appellant and his brother formed the plan to buy the hotel, and appellees are the investors that the brothers convinced to buy a fifty-percent stake in the scheme and the company that the three investors formed to hold their membership interest. The court concluded that appellant's res judicata argument fails where the release claim at issue was filed in the original action while summary judgment was still interlocutory. Thus, the claim was properly preserved through the severance order for later adjudication, and res judicata does not bar it. The court also concluded that the district court did not err in affirming the bankruptcy court judgment that appellant breached the settlement agreement. Further, the district court properly affirmed the bankruptcy court's dismissal of appellant's breach-of-guaranty claim against the investors, but not as to the company. The court affirmed in part and vacated in part, remanding for additional proceedings, including a determination of what percentage of the attorney’s fees were attributable to the breach-of-contract claim.