United States Bankruptcy Court Central District of California Judge Victoria Kaufman, Presiding Courtroom 301 Calendar San Fernando Valley Wednesday, September 9, 2020 301 Hearing Room 9:30 AM Mary Ann Irvine 1:18-12689 Chapter 13 #1.00 Motion for relief from stay [RP] CITIBANK, NA VS DEBTOR fr. 11/6/19; 11/6/19; 12/4/19; 1/8/20; 2/26/20; 4/15/20; 5/20/20; 6/24/20; 7/29/20 30 Docket Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1). Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property. The co-debtor stay of 11 U.S.C. § 1201(a) and § 1301(a) is terminated, modified or annulled as to the co-debtor, on the same terms and conditions as to the debtor. The 14-day stay prescribed by FRBP 4001(a)(3) is waived. Movant must submit the order within seven (7) days. Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified. Tentative Ruling: Party Information Debtor(s): Mary Ann Irvine Represented By Nathan A Berneman Movant(s): Citibank, N.A. Represented By Page 1 of 30 9/8/2020 12:56:36 PM
Transcript
United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
The co-debtor stay of 11 U.S.C. § 1201(a) and § 1301(a) is terminated, modified or annulled as to the co-debtor, on the same terms and conditions as to the debtor.The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Mary Ann Irvine Represented ByNathan A Berneman
Movant(s):
Citibank, N.A. Represented By
Page 1 of 309/8/2020 12:56:36 PM
United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMMary Ann IrvineCONT... Chapter 13
Randy StaceyAaron HardisonRaymond Jereza
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMMelissa Linda Nakamura1:20-11150 Chapter 7
#2.00 Motion for relief from stay [PP]
JPMORGAN CHASE BANK, N.A. VSDEBTOR
10Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to repossess and sell the property.
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Melissa Linda Nakamura Represented ByGregory M Shanfeld
Trustee(s):
David Keith Gottlieb (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMSusana Camacho1:20-11167 Chapter 7
#3.00 Motion for relief from stay [PP]
SANTANDER CONSUMER USA INCVSDEBTOR
13Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Susana Camacho Pro Se
Trustee(s):
David Keith Gottlieb (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMAlejandro Serrano1:20-11191 Chapter 7
#4.00 Motion for relief from stay [PP]
AMERICAN HONDA FINANCE CORPORATIONVSDEBTOR
17Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1) and (d)(2).
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Alejandro Serrano Represented ByR Grace Rodriguez
Trustee(s):
Diane C Weil (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMEdith Calix1:20-11246 Chapter 7
#5.00 Motion for relief from stay [PP]
CAB WEST, LLCVSDEBTOR
12Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Edith Calix Represented ByTerrence Fantauzzi
Trustee(s):
Amy L Goldman (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMHermann Muennichow1:17-10673 Chapter 7
#6.00 Motion for relief from stay [RP]
WILMINGTON SAVINGS FUND SOCIETY, FSBVSDEBTOR
fr. 8/19/20
73Docket
- NONE LISTED -
Tentative Ruling:
Party Information
Debtor(s):
Hermann Muennichow Represented ByStuart R Simone
Trustee(s):
David Seror (TR) Represented ByRichard Burstein
Page 7 of 309/8/2020 12:56:36 PM
United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1) and (d)(4).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
If recorded in compliance with applicable state laws governing notices of interests or liens in real property, the order is binding in any other case under this title purporting to affect the property filed not later than 2 years after the date of the entry of the order by the court, except that a debtor in a subsequent case under this title may move for relief from the order based upon changed circumstances or for good cause shown, after notice and hearing.
Any other request for relief is denied.
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Aurora Frias Lee-Nelson Represented By
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMAurora Frias Lee-NelsonCONT... Chapter 7
Ronald D Tym
Trustee(s):
David Keith Gottlieb (TR) Represented ByD Edward HaysLaila Masud
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMAlvin Isidro1:17-10747 Chapter 13
#8.00 Motion for relief from stay [PP]
BMW BANK OF NORTH AMERICAVSDEBTOR
64Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Alvin Isidro Represented ByRobert M Aronson
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMLuis Trigueros1:16-12176 Chapter 13
#9.00 Motion for relief from stay [RP]
TOWD POINT MORTGAGE TRUST ASSET-BACKED SECURITIESVSDEBTOR
60Docket
Grant relief from stay pursuant to 11 U.S.C. § 362(d)(1).
Movant (and any successors or assigns) may proceed under applicable nonbankruptcy law to enforce its remedies to foreclose upon and obtain possession of the property.
The co-debtor stay of 11 U.S.C. § 1201(a) and § 1301(a) is terminated, modified or annulled as to the co-debtor, on the same terms and conditions as to the debtor.
This order is binding and effective despite any conversion of this bankruptcy case to a case under any other chapter of the Bankruptcy Code.
Upon entry of the order, for purposes of Cal. Civ. Code § 2923.5, the Debtor is a borrower as defined in Cal. Civ. Code § 2920.5(c)(2)(C).
The 14-day stay prescribed by FRBP 4001(a)(3) is waived.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Luis Trigueros Represented By
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMLuis TriguerosCONT... Chapter 13
Todd L TurociJaime A Cuevas Jr.
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
Page 12 of 309/8/2020 12:56:36 PM
United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMDavid Andrew Fremont and Carol Ann Majewski1:18-11456 Chapter 13
David Andrew Fremont Represented ByAllan S Williams
Joint Debtor(s):
Carol Ann Majewski Represented ByAllan S Williams
Movant(s):
Kinecta Federal Credit Union Represented ByErin M McCartney
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
Page 13 of 309/8/2020 12:56:36 PM
United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMYelena Chistyakova1:20-11420 Chapter 13
#11.00 Motion for relief from stay [RP]
ARKADY VAPNIKVSDEBTOR
10Docket
- NONE LISTED -
Tentative Ruling:
Party Information
Debtor(s):
Yelena Chistyakova Represented ByAlla Tenina
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
9:30 AMPaul Anthony Matulewicz1:20-11433 Chapter 13
#12.00 Motion in individual case for order imposing a stay or continuing the automatic stay as the court deems appropriate
11Docket
Grant.
Movant must submit the order within seven (7) days.
Note: No response has been filed. Accordingly, no court appearance by movant is required. Should an opposing party file a late opposition or appear at the hearing, the Court will determine whether further hearing is required and movant will be so notified.
Tentative Ruling:
Party Information
Debtor(s):
Paul Anthony Matulewicz Represented ByMatthew D. Resnik
Trustee(s):
Elizabeth (SV) F Rojas (TR) Pro Se
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
Nguyen, Trustee of Mother Nature Trust v. United Lender, LLC et alAdv#: 1:20-01070
#16.00 Status conference re removed proceeding
1Docket
The Court will not remand this matter.
I. BACKGROUND
A. The State Court Action
On January 15, 2020, Any Thy Song Nguyen, Trustee of Mother Nature Trust ("Plaintiff"), filed a complaint in state court against United Lender, LLC ("United"), Shawn Ahdoot, Albert A. Ahdoot, Megan E. Zucaro, Helping Others International, LLC ("Debtor"), Western Fidelity Associates, LLC ("Western Fidelity"), American Financial Center, Inc. ("American") and John B. Spear (collectively, "Defendants"). Notice of Removal, Exhibit 2.
On January 21, 2020, Plaintiff filed the operative first amended complaint (the "FAC"), asserting causes of action for: (A) wrongful foreclosure – fraud; (B) fraud and deceit – intentional misrepresentation; (C) negligence; (D) breach of contract; (E) relief based on rescission of contract; (F) quieting title; (G) cancellation of written instruments; (H) declaratory relief; and (I) unfair business practices. Notice of Removal, Exhibit 14. Plaintiff demanded a jury trial. Id. In the FAC, Plaintiff alleges—
Plaintiff was the seller of residential real property located at 6475 Marigayle Circle, Huntington Beach, CA 92648 (the "Huntington Property"). United is the purported holder of a first deed of trust against the Huntington Property; Shawn and Albert Ahdoot are principals and alter egos of United. Debtor was the buyer of the Huntington Property and the trustor or debtor under the first deed of trust encumbering the Huntington Property; Ms. Zucaro is a principal and alter ego of Debtor, as well as a licensed real estate broker.
Tentative Ruling:
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
San Fernando Valley
Wednesday, September 9, 2020 301 Hearing Room
1:30 PMHelping Others International, LLCCONT... Chapter 11Western Fidelity is the trustee under the first deed of trust, and recorded a Notice of Trustee’s Sale with a sale set for January 27, 2020. Mr. Spear is a licensed real estate broker and the "responsible broker" for Ms. Zucaro. Finally, American Financial is the purported holder of a third deed of trust against the Huntington Property. Defendants were agents of one another and co-conspirators.
In March 2019, Plaintiff received a call from Ms. Zucaro, who stated she was a real estate broker interested in buying the Huntington Property. Plaintiff told Ms. Zucaro she would sell the Huntington Property for $2.5 million. However, Ms. Zucaro stated she did not have sufficient funds for the purchase, but would pay $3 million if Plaintiff would carry a promissory note secured by a second deed of trust for one year, while Ms. Zucaro sold other properties. Ms. Zucaro also requested an additional $150,000 commission. Plaintiff sold the Huntington Property to Debtor on these terms and obtained a promissory note from Debtor, secured by a second priority deed of trust, in the amount of $1.2 million.
Subsequently, Debtor did not make any payments to Plaintiff. On July 1, 2019, Debtor obtained a loan from American secured by a third priority deed of trust in the amount of $75,000. On September 18, 2019, United caused Western Fidelity to record a Notice of Default and Election to Sell Under Deed of Trust. On December 20, 2019, United caused Western Fidelity to record a Notice of Trustee’s Sale, setting a foreclosure sale for January 27, 2020.
Since then, Plaintiff discovered that United sent a letter to Debtor noting that Debtor and Ms. Zucaro were current on United’s loan. Plaintiff also discovered that Defendants have engaged in similar fraudulent conduct related to other real property. As such, Plaintiff believes Defendants acted in concert to steal Plaintiff’s equity in the Huntington Property.
Id. On these allegations, Plaintiff seeks, among other relief, rescission of the sale agreement, a judgment that Defendants have no interest in the Huntington Property and monetary damages against Defendants. Id.
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
On March 4, 2020, United filed a cross-complaint against Debtor, Plaintiff, Ms. Zucaro, Mr. Spear and Tri Star Equity Group Corp. (the "Cross-Complaint"), asserting causes of action for: (A) judicial foreclosure of deed of trust; (B) specific performance of assignment of rents; (C) appointment of receiver pursuant to provision in deed of trust; (D) injunctive relief; (E) breach of contract; (F) negligent misrepresentation; (G) fraudulent concealment; (H) negligence; (I) negligent hiring/supervision; (J) conspiracy; and (K) unjust enrichment. Notice of Removal, Exhibit 75. United also demanded a jury trial. Id. In the Cross-Complaint, United alleges—
On April 3, 2019, Debtor submitted to United a request for a loan secured by the Huntington Property. On May 1, 2019, Debtor and United entered into a loan transaction through which United provided $1,957,000 in financing for the purchase and sale of the Huntington Property. Pursuant to the promissory note executed in connection with this transaction, Debtor was to make monthly payments on the first of each month, beginning on June 1, 2019.
Debtor defaulted on the promissory note, which is due and payable in full, in the total sum of $2,234,390.66. Debtor has refused to cure its defaults. In addition, United believes that Debtor is using the Huntington Property as an unlicensed halfway house or sober living facility. United believes the other cross-defendants have conspired with Debtor to defraud United by inflating the sale price and using United’s loan to enrich themselves.
Id. On these allegations, United seeks, among other things, sale of the Huntington Property, enforcement of its deed of trust as a first priority deed of trust, specific performance of the deed of trust and a monetary judgment in the amount of $2,234,390.66, plus interest, late charges, fees and costs. Id.
On August 20, 2020, United filed a motion to amend the Cross-Complaint [doc. 18], requesting leave to assert claims for: (A) quiet title; (B) declaratory relief; (C) equitable lien by subrogation; and (D) tort of another. If the Court grants the request to amend the Cross-Complaint, the Cross-Complaint will seek, among other things, a judgment that United’s lien is valid, a sale of the Huntington Property and monetary
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
On June 5, 2020, Plaintiff filed a notice that the state court set trial for August 27, 2021, with a settlement conference set for July 23, 2021. Notice of Removal, Exhibit 122. Although the parties have filed several pleadings in state court, prior to removal, the state court entered only two substantive orders: (A) an order on a request to enter a temporary restraining order enjoining the scheduled foreclosure sale of the Huntington Property; and (B) an order on a motion requesting a preliminary injunction enjoining the foreclosure sale. Notice of Removal, Exhibits 24, 25, 51, 52. The remaining motions and applications were pending at the time United removed this action to this Court.
B. Debtor’s Bankruptcy Case and the Removal
On June 29, 2020, Debtor filed its chapter 11 petition. On July 17, 2020, United removed this action to this Court. On July 24, 2020, the Court issued the OSC [doc. 5]. On August 6, 2020, the Court entered an order appointing a chapter 11 trustee (the "Trustee") [Bankruptcy Docket, doc. 47]. [FN1].
On August 14, 2020, Plaintiff filed a brief requesting remand of this action and a statement of non-consent to entry of a final order or judgment by this Court ("Plaintiff’s Brief") [doc. 16]. Plaintiff argues that the factors applicable to equitable remand weigh in favor of remanding this matter; Plaintiff especially emphasizes her demand for a jury trial. In addition, Plaintiff asserts that United waived its right to removal of this action based on a provision in the promissory note executed by United and Debtor. Finally, Plaintiff argues that United waived its right to removal by filing pleadings before the state court.
On August 26, 2020, the Trustee filed a brief opposing remand (the "Trustee’s Brief") [doc. 24]. In the Trustee’s Brief, the Trustee states that he is attempting to work with the other parties to reach a compromise and settlement. The Trustee also argues that the Court should not remand this matter because the Huntington Property is the primary asset of the estate, and the outcome of this adversary proceeding is critical to administration of the estate. On August 26, 2002, United also filed a brief opposing remand (the "United Brief") [doc. 25]. In the United Brief, United asserts that the contractual provision referenced by Plaintiff does not mandate remand, and that United has not otherwise waived its right to removal. United also asserts that the
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
factors applicable to equitable remand weigh against remanding this action.
On August 26, 2020, American filed a brief [doc. 26] stating that it does not object to the removal of this action, but requests that the Court keep this case "until final resolution on the merits" to avoid further delay. Previously, American had filed a demand for jury trial and a statement of non-consent to a jury trial by this Court [doc. 14]. On August 26, 2020, Plaintiff, United and American filed a status report [doc. 27], in which the parties note that Plaintiff is evaluating a settlement proposal made by the Trustee.
II. ANALYSIS
A. Subject Matter Jurisdiction
Removal of state court actions to federal district court is governed by 28 U.S.C. §§ 1441 – 1455. Removal and remand of actions related to bankruptcy cases is governed by § 1452.
(a) A party may remove any claim or cause of action in a civil action . . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title.
(b) The court to which such claim or cause of action is removed my remand such claim or cause of action on any equitable ground. . . .
28 U.S.C. § 1452. As set forth in § 1452, removal to a bankruptcy court requires that the court have jurisdiction of such claim or cause of action under 28 U.S.C. § 1334. 28 U.S.C. § 1334(b), with regard to bankruptcy cases and proceedings, provides that:
Except as provided by subsection (e)(2) and notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.
1. Arising Under Jurisdiction
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
"A matter arises under the Bankruptcy Code if its existence depends on a substantive provision of bankruptcy law, that is, if it involves a cause of action created or determined by a statutory provision of the Bankruptcy Code." In re Ray, 624 F.3d 1124, 1131 (9th Cir. 2010).
2. Arising In Jurisdiction
"A proceeding ‘arises in’ a case under the Bankruptcy Code if it is an administrative matter unique to the bankruptcy process that has no independent existence outside of bankruptcy and could not be brought in another forum, but whose cause of action is not expressly rooted in the Bankruptcy Code." Id.
Matters that "arise under or in Title 11 are deemed to be ‘core’ proceedings . . . ." In re Harris Pine Mills, 44 F.3d 1431, 1435 (9th Cir. 1995). Title 28, United States Code, section 157(b)(2) sets out a non-exclusive list of core proceedings, including "matters concerning the administration of the estate," "allowance or disallowance of claims," "objections to discharges," "motions to terminate, annul, or modify the automatic stay," and "confirmation of plans." Bankruptcy courts have the authority to hear and enter final judgments in "all core proceedings arising under title 11, or arising in a case under title 11 . . . ." 28 U.S.C. § 157(b)(1); Stern v. Marshall, 564 U.S. 462, 475-76, 131 S.Ct. 2594, 2604, 180 L.Ed.2d 475 (2011).
3. Related to Jurisdiction
Bankruptcy courts also have jurisdiction over proceedings that are "related to" a bankruptcy case. 28 U.S.C. § 1334(b); In re Pegasus Gold Corp., 394 F.3d 1189, 1193 (9th Cir. 2005). A proceeding is "related to" a bankruptcy case if:
[T]he outcome of the proceeding could conceivably have any effect on the estate being administered in bankruptcy. Thus, the proceeding need not necessarily be against the debtor or against the debtor's property. An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.
Pegasus Gold Corp., 394 F.3d at 1193 (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984) (emphasis omitted)).
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
Here, none of the parties contend that this Court lacks subject matter jurisdiction over this proceeding. Under the authorities above, and in reviewing the FAC and the Cross-Complaint, the Court has "related to" jurisdiction over this matter. Both the FAC and the Cross-Complaint assert several causes of action against Debtor. In addition, because Plaintiff requests rescission of the sale agreement through which Plaintiff sold the Huntington Property to Debtor, resolution of this proceeding impacts whether the Huntington Property will remain property of the estate. Consequently, this Court has subject matter jurisdiction over this action.
B. Waiver of Right to Remove
In Plaintiff’s Brief, Plaintiff contends that United waived its right to remove this proceeding by filing pleadings in state court. Plaintiff cites Yusefzadeh v. Nelson, Mullins, Riley & Scarborough, LLP, 365 F.3d 1244 (11th Cir. 2004), as support for her proposition. However, Yusefzadeh applied to removals under 28 U.S.C. § 1446(a), not 28 U.S.C. § 1452(a). Yusefzadeh, 365 F.3d at 1246. The Yusefzadehcourt referenced 28 U.S.C. § 1447(c) to note that parties may argue that the removing party waived its right to remove an action in connection with a request to remand. Id.
Section 1447(c) explicitly applies to removals under 28 U.S.C. § 1446(a). 28 U.S.C. § 1447(c) ("A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a).") (emphasis added). Plaintiff has not set forth any authority applying a waiver bar to a removal under § 1452(a). See Shared Network Users Grp., Inc. v. WorldCom Techs., Inc., 309 B.R. 446, 449 (E.D. Pa. 2004) ("Section 1452(b)…has its own provision for preventing dilatory or otherwise unfair conduct on the part of the removing party. While § 1446 has the 30 day rule, § 1452 permits the court to remand on ‘any equitable ground.’ Thus, § 1452 takes care of the problem of abusive tactics by a removing party in a way different from § 1446.").
In addition, as noted by United, a party "may have the right to remove to federal court where, after it is apparent that the case is removable, the defendant takes actions in state court that manifest his or her intent to have the matter adjudicated there, and to abandon his or her right to a federal forum." Resolution Tr. Corp. v. Bayside Developers, 43 F.3d 1230, 1240 (9th Cir. 1994) (emphasis added).
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United States Bankruptcy CourtCentral District of California
Judge Victoria Kaufman, PresidingCourtroom 301 Calendar
We have made clear that we will not "charge defendants with notice of removability until [they have] received a paper that gives them enough information to remove." Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1141 (9th Cir. 2013) (quoting Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th Cir. 2006) ). "[A]s long as the complaint or ‘an amended pleading, motion, order or other paper’ does not reveal that the case is removable," a defendant, in effect, "may remove at any time." Rea v. Michaels Stores Inc., 742 F.3d 1234, 1238 (9th Cir. 2014) (per curiam) (quoting 28 U.S.C. § 1446(b)(3)).
Kenny v. Wal-Mart Stores, Inc., 881 F.3d 786, 791 (9th Cir. 2018). In Kenny, for instance, the Ninth Circuit Court of Appeals held that the operative complaint was "indeterminate as to the amount in controversy" and, as a result, the right to remove was not apparent. Id., at 790.
Here, the right to removal under 28 U.S.C. § 1452(a) does not arise until a bankruptcy case is commenced. As such, United could not have waived its rights prior to Debtor’s filing of a bankruptcy petition, on June 29, 2020. United removed this proceeding approximately two weeks after the petition date. In those two weeks, the state court docket reflects that United filed only two responsive pleadings; United did not take any other action during that time. As such, to the extent waiver may be used as a bar to removal under 28 U.S.C. § 1452(a), United did not waive its right to remove under the circumstances present in this case.
C. Forum Selection Clause
Plaintiff also asserts that United contractually waived its right to removal because the promissory note executed by Debtor and United includes the following provision—
Choice of Venue. If there is a lawsuit, Borrower agrees, upon Lender’s request, to submit to the jurisdiction of the courts of Clark County, State of Nevada.
Notice of Removal, Exhibit 74. However, Plaintiff is neither the borrower nor the lender; as such, Plaintiff does not have standing to enforce any provision in a contract to which she is not a party. Plaintiff has not otherwise stated a legal basis that would
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allow Plaintiff to enforce a provision in the promissory note. Moreover, the referenced provision explicitly hinges on a request by United; here, United (as well as the Trustee) has requested that this Court adjudicate this proceeding. Thus, United did not contractually waive a right to removal.
D. Equitable Remand
"Bankruptcy courts have broad discretion to remand cases over which they otherwise have jurisdiction on any equitable ground." In re Enron Corp., 296 B.R. 505, 508 (C.D. Cal. 2003). 28 U.S.C. § 1452(b) provides, in pertinent part: "The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground." "‘[E]ven where federal jurisdiction attaches in actions ‘related to’ bankruptcy proceedings, Congress has explicitly provided for courts to find that those matters are more properly adjudicated in state court.’" Parke v. Cardsystem Solutions, Inc., 2006 WL 2917604 (N.D. Cal. October 11, 2006) (quoting Williams v. Shell Oil Co., 169 B.R. 684, 690 (S.D. Cal. 1994)).
Courts generally consider up to fourteen factors in deciding whether to remand a case to state court. Enron, 296 B.R. at 508. Factors courts should consider in deciding whether to remand are:
(1) the effect or lack thereof on the efficient administration of the estate if the Court recommends [remand or] abstention;
(2) extent to which state law issues predominate over bankruptcy issues;(3) difficult or unsettled nature of applicable law;(4) presence of related proceeding commenced in state court or other
nonbankruptcy proceeding;(5) jurisdictional basis, if any, other than [section] 1334;(6) degree of relatedness or remoteness of proceeding to main bankruptcy case;(7) the substance rather than the form of an asserted core proceeding;(8) the feasibility of severing state law claims from core bankruptcy matters to
allow judgments to be entered in state court with enforcement left to the bankruptcy court;
(9) the burden on the bankruptcy court's docket; (10) the likelihood that the commencement of the proceeding in bankruptcy court
involves forum shopping by one of the parties; (11) the existence of a right to a jury trial;
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(12) the presence in the proceeding of nondebtor parties; (13) comity; and (14) the possibility of prejudice to other parties in the action.
Id., 508 n.2; see also In re Cytodyn of New Mexico, Inc., 374 B.R. 733, 738 (Bankr. C.D. Cal. 2007).
Here, the factors weigh against remand. First, the impact of this proceeding on administration of the estate is significant. The proceeding will impact whether one of Debtor’s critical scheduled assets remains property of the estate, as well as the amount of secured claims encumbering the Huntington Property (and asserted as claims against the estate in general). The Complaint, the Cross-Complaint and United’s proposed first amended cross-complaint indicate a high degree of relatedness to the main bankruptcy case. In addition, the causes of action in these pleadings do not appear to be difficult or unsettled.
Moreover, the FAC, the Cross-Complaint and the proposed first amended cross-complaint appear to include both core and noncore claims. Given the intertwining allegations related to all the claims, severing core and noncore claims would not be feasible. Further, while there are nondebtor parties involved, most parties either have not responded to the OSC, or have explicitly consented to entry of a final order and/or a jury trial by this Court. American, the only party other than Plaintiff to file a statement not consenting to a jury trial, subsequently requested the Court keep this case "until final resolution on the merits."
In addition, the state court set trial for August 27, 2021, i.e., approximately one year from this hearing. Rather than prejudice all parties by delaying administration of Debtor’s bankruptcy case by (at least) one year, and in comparing this Court’s calendar to the state court’s trial date, this Court will be able to more quickly adjudicate this matter; in turn, this will allow the Trustee to proceed promptly to administration and distribution of the estate. In light of the parties’ comments regarding settlement discussions, a discharge of the OSC also will allow the parties to take advantage of this Court’s mediation panel by arranging a global mediation of the issues related to both this adversary proceeding and Debtor’s bankruptcy case. Finally, the record does not reflect that United is forum shopping.
Although Plaintiff has not consented to entry of a final order or judgment by this
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Court, or to a jury trial held by this Court, these concerns are only two factors in assessing whether to remand an action. If the parties eventually require trial, and continue to object to trial being conducted by this Court, the parties may move to withdraw the reference and set trial before the United States District Court (the "District Court"). If Plaintiff does not consent to entry of a final order or judgment by this Court, and the District Court does not withdraw the reference, this Court will issue a report and recommendation to the District Court. Based on the above, the Court will not remand this action to state court.
III. CONCLUSION
The Court will not remand this matter to state court.
The Trustee did not participate in the joint status report submitted by Plaintiff, United and American. The Court will continue this status conference to 1:30 p.m. on October 7, 2020. No later than September 23, 2020, all non-defaulted parties must file and serve a joint status report.
The Trustee must submit an order within seven (7) days.
FOOTNOTES
1. On August 27, 2020, the Court held a hearing on a motion, filed by the Trustee, to convert this case to a chapter 7 case. At that time, the Court issued a ruling granting the motion, and this case has been converted to a chapter 7 case.
