The Estate of Juanita Amelia Jackson v. Sandnes et al

Filing 124

ORDER: The Jackson Estate's Motion to Stay Proceedings 109 is GRANTED. The Clerk is directed to STAY and ADMINISTRATIVELY CLOSE THIS CASE. The parties are directed to file a status report on June 30, 2014, and every 90 days thereafter. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 4/8/2014. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THE ESTATE OF JUANITA AMELIA
JACKSON, by and through CATHY
JACKSON-PLATTS, Personal
Representative,
Plaintiff,
v.

Case No. 8:13-cv-1133-T-33MAP

MICHAEL SANDNES, et al.,
Defendants.
/
ORDER
This matter comes before the Court pursuant to Plaintiff
the

Estate

of

Juanita

Amelia

Jackson’s

Motion

to

Stay

Proceedings (Doc. # 109), which was filed on March 13, 2014.
Defendants Alan M. Grochal, Michael Sandnes, and Tydings &
Rosenberg, LLC filed a response in opposition to the Motion
(Doc. # 114) on March 26, 2014. In addition, on March 31,
2014, Defendants GTCR Golder Rauner, LLC, GTCR Partners VI,
L.P., and General Electric Capital Corporation filed responses
to the Motion. (Doc. ## 119, 120). For the reasons that
follow, the Court grants the Motion.
Discussion
On

December

5,

2011,

the

Jackson

Estate

filed

an

involuntary chapter 7 bankruptcy case naming Fundamental Long
Term Care, Inc. as the debtor. See case 8:11-bk-22258-MGW.

Judge

Williamson

has

presided

over

that

case

since

its

inception and has addressed numerous complex issues in that
case as well as in myriad related adversary proceedings,
including 8:13-ap-893-MGW. In a recent order, Judge Williamson
explained:
[T]he Estate of Jackson obtained a $110 million
judgment against THI and THMI.
The Estate of
Jackson then added the Debtor’s name to the
judgment
in
post-judgment
proceedings
supplementary.
After adding the Debtor to its
judgment against THI and THMI, the Estate filed
this involuntary case. The day before the order
for relief was entered, the Estate of Nunziata
obtained a $200 million judgment against THMI. One
month later, the Estate of Webb obtained a $900
million judgment against THI and THMI.
So more
than $1 billion in judgments were entered against
THI and THMI around the time this bankruptcy case
was filed.
(8:13-ap-893-MGW at Doc. # 204 at 13).

Judge Williamson’s

discussion illustrates how the Jackson Estate’s claims are a
single piece of a larger puzzle.
This Court and the bankruptcy court have been entering
Orders on these related cases simultaneously.
Order,

this

Court

dismissed

the

Jackson

In one such

Estate’s

claims

against Defendants Michael Sandnes, Alan M. Grochal, and
Tydings & Rosenberg, LLP for lack of jurisdiction based on the
application of the Barton Doctrine. (Doc. # 93). The Supreme
Court in Barton v. Barbour, 104 U.S. 126, 127 (1881), stated

2

that “it is a general rule that before suit is brought against
a receiver[,] leave of the court by which he was appointed
must be obtained.”
jurisdiction

over

This Court determined that it lacked
Sandnes

and

Grochal

(both

receivers

appointed by a Maryland court) as well as Tydings (counsel for
the receivers) because the Jackson Estate failed to seek leave
of the Maryland court prior to asserting claims against these
entities in this Court. (Doc. # 93 at 9-12).
This Court has also issued an Order dismissing without
prejudice claims against other defendants in this case with
leave to amend. (Doc. # 94).

The Jackson Estate sought a 90-

day extension of time in which to file the amended complaint.
(Doc. # 95).

In an Order dated March 13, 2014, the Court

granted a limited extension of time for the Jackson Estate to
file the amended complaint and noted:
[The Jackson Estate] mentions multiple bankruptcy
proceedings in Tampa as well as appellate
proceedings in Maryland, which it contends bear on
the issues presented in this case. The Court has
determined that it is not appropriate to allow the
Jackson Estate 90 additional days to file an
Amended Complaint.
However, the Court would
consider a Motion to Stay this action, based on
those proceedings, if raised in a timely manner.
(Doc. # 101 at 4).
At this juncture, the Jackson Estate requests that this
action be stayed pending resolution of appellate proceedings
3

in

Maryland

and

resolution

of

certain

issues

in

aforementioned bankruptcy proceedings. (Doc. # 109).

the
For

instance, in the Motion to Stay Proceedings, the Jackson
Estate asserts that a stay is warranted because “a pending
appeal in the Maryland Court of Special Appeals bears directly
on the issues presented in this case.

The appeal relates to

the validity of the Maryland receivership that forms the basis
of this action. Oral argument was held on March 6, 2014 and
the parties await a decision by the appellate court.” (Doc. #
109 at 4).
The Jackson Estate also highlights the overlapping nature
of the claims asserted in the bankruptcy court and the
“embarrassment of conflicting rulings” which may arise if this
Court and the bankruptcy court continue to address the merits
of these intertwined cases simultaneously. (Id. at 3) (citing
Gov’t of Virgin Island v. Neadle, 861 F. Supp. 1054, 1055
(M.D. Fla. 1994)).

The Jackson Estate requests a stay of

these proceedings “until the adversarial proceeding reaches a
stage where the risk of inconsistent rulings is no longer
present.”

(Doc. # 109 at 3-4).

The Court exercises its discretion to stay this case
until such time as the aforementioned Maryland appellate
proceedings and bankruptcy proceedings have been resolved.
4

See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)(“[T]he
power to stay proceedings is incidental to the power inherent
in every court to control the disposition of the causes on its
docket with economy of time and effort for itself, for
counsel, and for litigants.”); I.A. Durbin, Inc. v. Jefferson
Nat’l Bank, 793 F.2d 1541, 1552 (11th Cir. 1986)(“Trial courts
are afforded broad discretion in determining whether to stay
. . . litigation in order to avoid duplicating proceedings
already pending in another federal court.”).1
accordingly

stays

the

case

as

requested

in

The Court
the

Jackson

Estate’s Motion pending resolution of the Maryland court
proceedings and the bankruptcy proceedings.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
(1)

The Jackson Estate’s Motion to Stay Proceedings (Doc. #
109) is GRANTED.

(2)

The Clerk is directed to STAY and ADMINISTRATIVELY CLOSE
1

The Court recognizes that on February 3, 2014, it
entered an Order (Doc. # 93), inter alia, denying without
prejudice a Motion to Stay filed by the Ventas Defendants
(Doc. # 68). However, since the entry of that Order, this
Court, the bankruptcy court, and the Maryland court have
issued countless orders which alter the legal landscape of
these interrelated proceedings.
Much has changed since
February 3, 2014, and the Jackson Estate has now persuaded
this Court that an Order staying this case is the most prudent
course of action.
5