Schuller et al v. Ocwen Loan Servicing, LLC

Filing 4

ORDER adopting the 2 Report and Recommendation. The 1 Motion to Withdraw Reference is granted with respect to Count One and denied as to Counts Two and Three. Counts Two & Three shall be litigated in and before the Bankruptcy Court. Count One is STAYED pending final judgment as to Counts Two & Three. The Clerk is directed to open a separate civil case for this action. Within 14 days after the civil case is opened, plaintiffs must file copies of pleadings, as set out. The Schullers are ordered to file a status report re: bankruptcy proceedings by 3/26/2014 and on or before the fourth Wednesday of each month. (CIVIL CASE NO. 14-89-WS-M). Signed by Chief Judge William H. Steele on 2/26/2014. (tgw)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION SCOTT DOUGLAS SCHULLER, et al., ) ) ) ) ) ) ) ) ) Plaintiffs, v. OCWEN LOAN SERVICING, LLC, Defendant. MISC. ACTION 14-0005-WS-M ORDER This matter comes before the Court on plaintiffs’ Motion for Withdrawal of Reference (doc. 1) and the Bankruptcy Court’s Report and Recommendation to the District Court (doc. 2). The Motion is ripe and the time fixed by this Court for objections to the Report and Recommendation has expired, with no party lodging any such objections. This case is postured as an Adversary Proceeding pending in the U.S. Bankruptcy Court for the Southern District of Alabama. Count One of the Complaint filed by plaintiffs, Scott D. Schuller and Cynthia M. Schuller, alleges that defendant, Ocwen Loan Servicing, LLC, violated the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”), in multiple specified ways. Meanwhile, Counts Two and Three allege that Ocwen violated the discharge injunction entered by the Bankruptcy Court, as well as the automatic stay prescribed by 11 U.S.C. § 362. In their Motion for Withdrawal of Reference, the Schullers express concern that the Bankruptcy Court lacks jurisdiction over their FDCPA claims, and maintain that withdrawal of the reference is appropriate under both the mandatory withdrawal and the discretionary withdrawal provisions of 28 U.S.C. § 157(d). In the Report and Recommendation, Bankruptcy Judge Shulman recommended as follows: (i) that this Court find the Bankruptcy Court lacks subject-matter jurisdiction over the Schullers’ FDCPA claim pursuant to 28 U.S.C. § 1334(b); (ii) that this Court grant mandatory withdrawal or, alternatively, permissive withdrawal of the reference as to Count One of the Adversary Proceeding pursuant to § 157(d); and (iii) that this Court stay Count One while the Bankruptcy Court proceeds to trial on Counts Two and Three, inasmuch as the Bankruptcy Court’s familiarity with the issues renders it the most efficient forum for those counts and resolution of those claims may benefit the parties by streamlining the triable issues remaining as to Count One in this District Court. After careful review of the file, including de novo review of the legal issues presented, and in the absence of objection by any party, the undersigned adopts the Report and Recommendation in its entirety. It is therefore ordered as follows: 1. The Motion for Withdrawal of Reference is granted with respect to Count One of the subject Adversary Proceeding, and that cause of action shall henceforth be litigated in this District Court; 2. The Motion for Withdrawal of Reference is denied as to Counts Two and Three of the Adversary Proceeding. The reference will remain in place as to those causes of action, which shall be litigated in and before the Bankruptcy Court; 3. The Clerk of Court is directed to open a separate civil case file for this action; 4. Within 14 days after the civil case file is opened in this District Court, plaintiffs must file in that civil action copies of all pleadings (including the Complaint and the Answer to Complaint) from the Adversary Proceeding in the Bankruptcy Court file, so that the District Court file will contain a full record of the claims and defenses joined herein; 5. The civil action in this District Court concerning Count One is stayed pending final judgment as to Counts Two and Three in the Bankruptcy Court; and 6. To keep the Court apprised of developments in the Bankruptcy Court, and to ensure that the stay in this case does not remain in place any longer than necessary, the Schullers are ordered to file, on or before the fourth Wednesday of each month, a written report reflecting the status of the bankruptcy proceedings. The first such report is due on or before March 26, 2014. DONE and ORDERED this 26th day of February, 2014. s/ WILLIAM H. STEELE CHIEF UNITED STATES DISTRICT JUDGE -2-

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