Musselman v. Here Fishy Fishy Properties I, LLC et al

Filing 3

ORDER denying without prejudice 1 Motion to Withdraw Reference. Signed by Judge Roy B. Dalton, Jr. on 4/24/2015. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
In re: CHARLES LORNE,

Case No.
Bankr. Case. No.
Adv. Proc. No.

Debtor,

6:15-mc-19-Orl-37
6:12-bk-14689-CCJ
6:14-ap-151-CCJ

CARLA P. MUSSELMAN,
Plaintiff/Trustee,
v.
HERE FISHY FISHY PROPERTIES I, LLC;
HERE FISHY FISHY PROPERTIES II, LLC;
HERE FISHY FISHY PROPERTIES III, LLC;
and SHERLYN LORNE,
Defendants,
JPMORGAN CHASE BANK, N.A.,
Interested Party
ORDER
This cause is before the Court on the Motion by Defendants to Withdraw Reference
(Doc. 1), filed February 24, 2015. Upon consideration, the Court finds that the motion is
due to be denied without prejudice.
Pursuant to 28 U.S.C. § 157(d), Bankruptcy Rule 5011, and Local Bankruptcy
Rule 5011-1, Defendants move to withdraw reference of the underlying adversary
proceeding, in which the Trustee of Debtor Charles Lorne’s Chapter 7 bankruptcy estate
seeks to avoid several allegedly fraudulent transfers to Defendants. 1 (See Doc. 1-1, p. 2.)

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The Trustee recently amended her complaint, arguably mooting Defendants’
motion for withdrawal of reference, see In re: Lorne, No. 6:14-ap-151-CCJ, Doc. 31;
however, because the claims in the amended pleading are substantially similar to those
in its predecessor and Defendants have not retracted their concerns about proceeding in

In support, Defendants argue that they have not consented to a jury trial by the bankruptcy
court, nor have they filed a proof of claim in the Debtor’s Chapter 7 proceedings, and thus
they have a Seventh Amendment right to have the Trustee’s fraudulent-transfer claims
tried before a jury in an Article III court. (See id. at 2–3 (citing Granfinanciera, S.A. v.
Nordberg, 492 U.S. 33, 36 (1989) (holding that the Seventh Amendment entitles “a person
who has not submitted a claim against a bankruptcy estate [to] a right to a jury trial when
sued by the trustee in bankruptcy to recover an allegedly fraudulent monetary transfer”)).)
Under 28 U.S.C. § 157(d), if “a bankruptcy court has assumed jurisdiction” of an
adversary proceeding, “a district court may withdraw reference only for cause shown.”
In re Parklane/Atlanta Joint Venture, 927 F.2d 532, 536 (11th Cir. 1991). The statute does
not define “cause shown,” but the U.S. Court of Appeals for the Eleventh Circuit has
“found that it is not an empty requirement.” In re Simmons, 200 F.3d 738, 741
(11th Cir. 2000). District courts weighing whether cause exists “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.” Id. at 742 (citation and internal quotation marks omitted). “The
moving party bears the burden of demonstrating cause for withdrawal of the reference.”
In re Advanced Telecomm. Network, Inc., No. 6:13-cv-700-Orl-28, 2014 WL 2528844,
at *1 (M.D. Fla. June 4, 2014).
Here, the Court declines to withdraw the bankruptcy reference at this time. In short,
Defendants’ motion is premature; the Eleventh Circuit’s pragmatic “cause” considerations

the bankruptcy court, the Court will address the substance of Defendants’ motion for
withdrawal (Doc. 1).

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favor permitting the bankruptcy court to retain jurisdiction over the adversary proceeding
unless and until it proceeds to trial. While the Seventh Amendment right to an Article III
jury trial “can constitute cause for withdrawal of reference,” all “pretrial matters may still
appropriately be handled in the bankruptcy court.” Id.; see also In re Gunnallen Fin., Inc.,
No. 8:10-cv-2855-T-24, 2011 WL 398054, at *4 (M.D. Fla. Feb. 3, 2011) (“[E]ven if
withdrawal is appropriate, a district court can allow the bankruptcy court to retain
jurisdiction to address all pretrial matters, from discovery through dispositive motions.”).
Indeed, “allowing the bankruptcy court to resolve pretrial issues and enter findings of facts
and recommendations of law on dispositive issues is consistent with Congress’ intent to
let expert bankruptcy judges determine bankruptcy matters to the greatest extent
possible.” In re Fundamental Long Term Care, Inc., No. 8:14-cv-1800-EAK, 2014 WL
4452711, at *3 (M.D. Fla. Sept. 9, 2014) (citation and internal quotation marks omitted).
Accordingly, consistent with the procedure routinely utilized in the Middle District
of Florida and elsewhere, it is hereby ORDERED AND ADJUDGED that the Motion by
Defendants to Withdraw Reference (Doc. 1) is DENIED WITHOUT PREJUDICE. If the
adversary proceeding, 6:14-ap-151-CCJ, proceeds through dispositive motions,
Defendants may refile a motion for withdrawal of reference at that time.

DONE AND ORDERED in Chambers in Orlando, Florida, on April 24, 2015.

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Copies:
Counsel of Record
Judge Cynthia C. Jackson,
U.S. Bankruptcy Court for the Middle District of Florida

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