In re: Split Vein Coal Company, Inc v. Gilberton Coal Company, Inc.; Seedco NP, LLC, Gilberton Coal Company, Inc

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 11-2469
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In re: Split Vein Coal Company, Inc.,
Debtor
Split Vein Coal Company, Inc.
v.
Gilberton Coal Company, Inc.;
Seedco NP, LLC,
Gilberton Coal Company, Inc,
Appellant
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Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil No. 4-10-cv-01947)
District Judge: Honorable Yvette Kane
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Submitted Under Third Circuit LAR 34.1(a)
May 25, 2012
Before: RENDELL, FUENTES and HARDIMAN, Circuit Judges
(Opinion Filed: June 5, 2012)
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OPINION OF THE COURT
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RENDELL, Circuit Judge.
This case involves a Pennsylvania state-law conversion claim that was prosecuted
as an adversary proceeding in bankruptcy. After a two-day trial, the Bankruptcy Court
found, in a 29-page opinion, that defendant Gilberton Coal Company had converted
approximately 500,000 tons of culm, or coal refuse, that belonged to plaintiff-debtor Split
Vein Coal Company (but was stored on land owned by Gilberton) and ordered Gilberton
to pay Split Vein the $639,685 in profits it earned on the sale of that culm. Gilberton
moved the Bankruptcy Court to reconsider, and, when the Bankruptcy Court denied that
motion, appealed to the District Court. In a detailed, 20-page opinion, the District Court
affirmed the Bankruptcy Court’s judgment in all respects. Gilberton now appeals the
judgment of the District Court.1
Gilberton raises six issues on appeal: (1) whether the Bankruptcy and District
Courts erred in concluding it waived the argument that Split Vein rejected the parties’
contract, an unexpired lease, as a matter of law under 11 U.S.C. § 365(d)(4); (2) whether
the Bankruptcy and District Courts incorrectly interpreted Pennsylvania law regarding the
abandonment of culm; (3) whether the Bankruptcy Court erred in concluding that Split
Vein did not abandon the culm; (4) whether the Bankruptcy Court erred in concluding
that Split Vein did not abandon the parties’ contract; (5) whether Split Vein met its
burden of proving conversion of the culm; and (6) whether Gilberton’s conversion was
properly excusable as an act necessary to avoid a public disaster. The Bankruptcy and
1 The Bankruptcy Court and District Court exercised jurisdiction under 28 U.S.C.
§ 157(b) and § 158(a)(1), respectively, and under 28 U.S.C. § 1334. Our jurisdiction
arises under 28 U.S.C. § 158(d)(1).

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District Courts appropriately and adequately addressed each of those issues, and we have
little to add to their thorough and thoughtful analyses in this very fact-intensive case.
Only one point warrants further discussion. Gilberton argues in its reply brief, for
the first time, that, assuming the parties’ agreement was a license, rather than a lease,
Split Vein failed to assume it in bankruptcy as required under 11 U.S.C. § 365(b)(1). In
brief, its logic proceeds as follows: (1) if the parties’ contract was not a lease, it was an
executory contract; (2) § 365(b)(1) requires a party assuming an executory contract to
cure all defaults or breaches; (3) Split Vein had breached or defaulted under the contract
in numerous ways; (4) Split Vein failed to cure those breaches and defaults; (5) therefore,
Split Vein failed to assume the contract under § 365(b)(1); and (6) even if Split Vein did
not reject the contract, it should be estopped from arguing it assumed the contract and
precluded from obtaining any relief under it.
We will not consider this factually and legally complex question for the first time
on appeal, especially when asserted so belatedly in a reply brief. Gilberton could have,
and should have, raised this purportedly dispositive issue in the Bankruptcy Court before
the case went to trial. Instead, it waited until the reply brief of its appeal from the appeal
of the Bankruptcy Court’s decision, after Split Vein’s last opportunity to respond. These
circumstances do not warrant a departure from our ordinary practice of declining to
review issues that are not timely raised. See Gleason v. Norwest Mortg., Inc., 243 F.3d
130, 142 (3d Cir. 2001) (“Generally, barring exceptional circumstances . . . this Court
does not review issues raised for the first time at the appellate level. Although we have
discretion to review an argument not raised in the trial Court, we ordinarily refuse to do

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so.” (citations omitted)); Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 204 n.29
(3d Cir. 1990) (“As a general matter, the courts of appeals will not consider arguments
raised on appeal for the first time in a reply brief.”).
Accordingly, we will affirm the judgment of the District Court.

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