In Re: Progressive Plumbing, Inc.

Filing 8

ORDER: The Evergreen Corporation's Motion for Withdrawal of the Reference and for Transfer of Venue 1 is DENIED without prejudice. The Clerk is directed to close this case and terminate any pending motions as moot. Signed by Judge James S. Moody, Jr on 3/1/2016. (LN)

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION

In re:

Chapter 11
Case No: 6:15-bk-7275-KSJ

PROGRESSIVE PLUMBING, INC.,
PROGRESSIVE SERVICES, LLC,
and GRACIOUS LIVING DESIGN
CENTER, INC.,
Debtors.
________________________________/
PROGRESSIVE PLUMBING, INC.
Plaintiff/Debtor
v.

Case No: 5:16-cv-59-Oc-30PRL

THE EVERGREEN CORPORATION
and ALLIED WORLD SPECIALTY
INSURANCE COMPANY,
Defendants.
________________________________/

ORDER
THIS CAUSE comes before the Court upon Defendant The Evergreen
Corporation’s (“Evergreen”) Motion for Withdrawal of the Reference and for Transfer of
Venue (Doc. 1), Allied World Specialty Insurance Company’s (“Allied”) response (Doc.

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3), and Evergreen’s reply (Doc. 6). 1 The Court, having reviewed the motion, response, and
reply, and being otherwise fully advised in the premises, concludes that Evergreen’s
motion should be denied.
On October 23, 2015, Progressive Plumbing, Inc. (“Progressive”) initiated this
adversary proceeding against Evergreen and Allied by filing a one-count complaint for
declaratory relief seeking a declaration that no sums are due to Evergreen under a
performance bond issued by Allied as Progressive’s surety. This proceeding arises out of
a hotel construction project in Atlanta, Georgia, for which Evergreen served as general
contractor. Progressive served as a subcontractor to Evergreen and Allied served as
Progressive’s performance bond surety.
Allied answered the complaint in the adversary proceeding and filed a one-count
cross-claim against Evergreen seeking declaratory judgment to determine the amounts due
and owing under the performance bond. Evergreen has not filed a proof of claim in the
bankruptcy case and is not seeking recovery from the estate. Rather, Evergreen sued Allied
in Georgia state court to recover under the performance bond. Evergreen currently seeks
an order withdrawing the reference for the adversary proceeding and transfer of the matter
to the Northern District of Georgia. 2 (Doc. 1).
Under 28 U.S.C. § 157(d), “the district court may withdraw, in whole or in part, any
case or proceeding referred [to the bankruptcy court], on its own motion or on timely
motion of any party, for cause shown.” Although Congress has not defined “cause” in the

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Plaintiff/Debtor Progressive Plumbing, Inc. did not file a response.
Alternatively, Evergreen seeks to compel arbitration of this matter. (Doc. 7).

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context of § 157(d), the Eleventh Circuit has remarked that it is not “an empty
requirement.” See In re Simmons, 200 F.3d 738, 741 (11th Cir. 2000) (citing In re
Parklane/Atlanta Joint Venture, 927 F.2d 532, 536 (11th Cir. 1991)). In determining
whether sufficient cause exists, “a district court should consider such goals as advancing
uniformity in bankruptcy administration, decreasing forum shopping and confusion,
promoting the economical use of the parties’ resources, and facilitating the bankruptcy
process.” In re Parklane, 927 F.2d at 536, n.5. Additional factors that a district court may
consider in determining whether cause exists for withdrawal of the reference include
whether the claim is core or non-core; efficient use of judicial resources; the presence of a
jury demand; and the prevention of delay. In re Hvide Marine towing, Inc., 248 B.R. 841,
844 (M.D. Fla. 2000).
Upon due consideration of the relevant factors, the Court concludes that withdrawal
of the reference at this time is not warranted. 3 Permitting the adversary proceeding to
remain in the bankruptcy court for disposition of pretrial matters, including any dispositive
motions, advances the uniformity of the bankruptcy administration, decreases the
likelihood of confusion, promotes the economical use of the parties’ resources by limiting
the bulk of the action to a single forum, and facilitates the efficient administration of
Progressive’s estate.

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The Court recognizes that Evergreen has filed a cross-claim against Allied in the adversary proceeding to
pursue monetary damages under the performance bond and that Evergreen does not consent to a jury trial in the
bankruptcy court. (Doc. 1 at 7-8). But withdrawal of the reference on the basis of Evergreen’s demand for a jury trial
is premature. The bankruptcy court is empowered to manage the pretrial matters of the case until it is ready for trial.
See In re Fundamental Long Term Care, Inc., Case No. 8:14-cv-1800-EAK, 2014 WL 4452711, at *3 (M.D. Fla. Sept.
9, 2014). If and when the case is ready for trial, Evergreen may renew its request for withdrawal of the reference.

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For the first time, the parties also raise the issue of arbitration and Evergreen has
filed a motion seeking to compel arbitration as an alternative to transfer. (Docs. 3, 6, 7).
Since withdrawal of the reference has been denied, it is not appropriate for the Court to
determine whether the parties should first pursue their claims through arbitration and leaves
that matter for the bankruptcy court to resolve.
Accordingly, it is therefore ORDERED AND ADJUDGED that:
1. The Evergreen Corporation’s (“Evergreen”) Motion for Withdrawal of the
Reference and for Transfer of Venue (Doc. 1) is DENIED without prejudice.
2. The Clerk is directed to close this case and terminate any pending motions as
moot.
DONE and ORDERED in Tampa, Florida, this 1st day of March, 2016.

Copies furnished to:
Counsel/Parties of Record

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