GILLILAND v. FIFTH THIRD MORTGAGE COMPANY et al

Filing 17

ORDER - Appellant Michael Gilliland's 1 motion for withdrawal of the reference, is DENIED and this action is DISMISSED. In addition, Appellant Michael Gilliland's 9 Motion for Mandatory Stay of All Bankruptcy Proceedings is DENIED as MOOT. (See Order.) Signed by Judge Larry J. McKinney on 12/14/2016. Copy sent to Appellant via US Mail. (LDH)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

MICHAEL GILLILAND,
Appellant,
vs.
FIFTH THIRD MORTGAGE COMPANY,
FIFTH THIRD BANK,
GREGORY PURVIS, and
SPANGLER, JENNINGS AND
DOUGHERTY,
Appellees.

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No. 1:16-cv-02755-LJM-DKL

ORDER
Appellant Michael Gilliland (“Gilliland”) has moved for an order withdrawing the
reference of his bankruptcy proceeding from the Bankruptcy Court. Citing 28 U.S.C. §
157(d), Gilliland argues that the adversary proceeding that he has filed in the Bankruptcy
Court necessarily invokes both core and non-core proceedings and relies on both Title
11 and other laws of the United States, namely the Fair Credit Reporting Act (“FCRA”);
therefore, the reference must be withdrawn. Dkt. No. 1. Gilliland further argues that this
Court should stay the Bankruptcy Court proceeding until this Court rules on his adversary
proceeding. Dkt. No. 9.
Appellees Fifth Third Mortgage Company, Fifth Third Bank (collectively, “Fifth
Third”), Gregory Purvis and Spangler, Jennings and Dougherty (collectively, “Law Firm
Defendants;” all defendants, collectively, “Appellees”), argue that withdraw of the
reference is not proper because the adversary proceeding raises only core issues – the

propriety of Fifth Third’s mortgage – and Gilliland fails to state any cognizable claim under
the FCRA or any other non-title 11 law.
DISCUSSION
“A motion for withdrawal of a case or proceeding shall be heard by a district judge.”
Fed. R. Bankr. P. 5011(a). Withdraw is mandatory if the court determines that resolution
of the proceeding requires consideration of both provisions of the Bankruptcy Code and
provisions of other federal laws. 28 U.S.C. § 157(d). However, § 157(d) must be
interpreted narrowly “so that it is not utilized as an ‘escape hatch through which most
bankruptcy matters [could] be removed to a district court.’” In re Laventhol & Horwath,
139 B.R. 109, 114-15 (S.D.N.Y. 1992). See also In re Coe-Truman Techs., Inc., 214 B.R.
183 (N.D. Ill. 1997); In re E&S Facilities, Inc., 181 B.R. 369, 372 (S.D. Ind. 1995), aff’d,
96 F.3d 949 (7th Cir. 1996). In other words, withdraw is proper only where the claim
presents complicated issues of first impression require significant interpretation of federal
law or presents substantial and material conflicts between the Bankruptcy Code and nonbankruptcy laws. See In re Auto Specialties Mfg. Co., 134 B.R. 227, 228 (W.D. Mich.
1990).

To decide whether or not withdrawal of the reference is proper, the Court may

consider the following factors: (1) whether withdrawal would promote judicial economy
or uniformity and efficiency in bankruptcy administration; (2) whether it would reduce
forum shopping; (3) whether it would cause delay and costs to the parties; (4) whether a
particular court has familiarity with the case; (5) whether the parties have demanded a
jury trial; and (6) whether a core or non-core proceeding is involved. See In re Comdisco
Ventures, Inc., Nos. 04-C-2007, 04-C-2393, 01-24795, 2004 WL 1375353, at *2 (N.D. Ill.
June 18, 2004); EPA v. Envtl. Waste Control, Inc., 131 B.R. 410, 418 (N.D. Ind. 1991);

Abrams v. DLA Piper (US) LLP, No. 2:12-cv-19, 2012 WL 1714591 (N.D. Ind. May 15,
2012). As the moving party, Gilliland bears the burden of proof. See Salin Bank & Trust
Co. v. Seybold, No. 1:08-cv-70, 2009 WL 377983 (N.D. Ind. Feb. 12, 2009).
Gilliland’s motion to withdraw reference falls short of the evidence necessary to
withdraw the reference of his adversary proceeding. Gilliland fails to provide any factual
basis from which the Court can conclude that his allegations with regard to the foreclosure
on his property and/or his the handling of those proceedings are outside of traditional core
proceedings in a bankruptcy. In fact, the allegations all relate to the validity of Fifth Third’s
mortgage lien on the subject property, which cannot be characterized as anything other
than a determination of the validity, extent or priority of a lien.

See 28 U.S.C. §

157(b)(2)(K) (defining “core proceeding” to include “determinations of the validity, extent,
or priority of liens”). Further, Gilliland’s allegations that Appellees violated the FCRA have
no factual foundation; therefore, there is no federal statutory claim that is intertwined with
or that presents substantially novel questions to substantiate withdrawal of the reference.
Because the issues presented in Gilliland’s adversary proceedings are “core” issues, and
challenge prior proceedings in the Bankruptcy Court, the Bankruptcy Court is in the best
position to quickly adjudicate his claims. Withdrawal of the adversary proceedings would
only complicate the case and would not be in the best interests of judicial economy or the
parties.
CONCLUSION
For these reasons, Appellant Michael Gilliland’s motion for withdrawal of the
reference, Dkt. No. 1, is DENIED and this action is DISMISSED. In addition, Appellant

Michael Gilliland’s Motion for Mandatory Stay of All Bankruptcy Proceedings, Dkt. No. 9,
is DENIED as MOOT.
IT IS SO ORDERED this 14th day of December, 2016.

________________________________
LARRY J. McKINNEY, JUDGE
United States District Court
Southern District of Indiana

Distribution:
MICHAEL GILLILAND
3448 West Old Brownsville Road
Liberty, IN 47353
Mark S. Gray
DOYLE & FOUTTY PC
[e-mail]
Kurt V. Laker
DOYLE LEGAL CORPORATION, P.C.
[e-mail]
Gregory A. Purvis
SPANGLER JENNINGS & DOUGHERTY PC
[e-mail]