In Re Deborah Ann Vinson

Filing 29

ORDER AND REASONS denying 24 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Carl Barbier on 4/23/2019. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
STIRLINGS, LLC, ET AL

CIVIL ACTION

VERSUS

No. 18-5512

DEBORAH ANN VINSON

SECTION: “J”(1)
ORDER AND REASONS

Before the Court is a Motion to Dismiss the Entire Action from Federal
Jurisdiction (Rec. Doc. 24), filed by Defendant-Appellant, Deborah Ann Vinson.
Vinson’s motion seeks to dismiss an adversarial proceeding for lack of subject matter
jurisdiction. 1

Plaintiffs-Appellees,

Stirlings,

LLC

and

Kathleen

Robinson

(collectively, “Stirlings”) filed an opposition (Rec. Doc. 25), to which Vinson replied.
(Rec. Doc. 28). Considering the Motion, the record, and the law, the Court finds the
Motion should be DENIED.
FACTS AND PROCEDURAL BACKGROUND
This adversarial proceeding arose out of a never-executed agreement between
Vinson and Stirlings to sell a house at 2503 St. Charles Avenue, New Orleans,
Louisiana 70130 (the “Property”). The underlying facts of the adversarial proceeding
were summarized by the Bankruptcy Court:
On May 20, 2016, Stirlings and Vinson executed a Louisiana Residential
Agreement to Buy or Sell (purchase agreement) regarding the property.
Vinson agreed to sell and Stirlings agreed to buy the property for the
sum of $2,100,000. In conjunction with the purchase agreement,
Stirlings paid Vinson a $105,000 deposit. The sale of the property was
never consummated, and Stirlings filed suit in Louisiana state court
seeking the return of the deposit. On November 17, 2016 Vinson filed a
1

(Rec. Doc. 1-2 at 1-2).

petition for relief under Chapter 11 of the United States Bankruptcy
Code. Stirlings and Robinson filed this adversary proceeding seeking the
return of the deposit plus stipulated damages and attorney’s fees . . . . 2
On December 12 and 13, 2017, a trial was held before the Bankruptcy Court to
determine who owned the $105,000 deposit. On May 22, 2018, the Bankruptcy Court
concluded that Stirlings was entitled to the deposit. 3 Vinson filed a notice of appeal
on May 31, 2018. 4 While the adversary proceeding was on appeal, on October 23,
2018, the Bankruptcy Court dismissed the main bankruptcy proceeding which had
given rise to the Bankruptcy Court’s jurisdiction over the adversarial proceeding. 5 In
so doing, the Bankruptcy Court observed:
[A]lthough the court is dismissing the main bankruptcy case, the court
is specifically not dismissing the adversary proceeding . . . which is
currently on appeal in the United States District Court for the Eastern
District of Louisiana. First, this court does not have jurisdiction to
dismiss an appeal pending in district court; second, pursuant to In re
Qurner, 7 F.3d 1199 (5th Cir. 1993), the court finds that considerations
of economy, convenience and fairness weigh against dismissal of the
adversary. The matter has already been tried to judgment, and the
appeal has already been briefed in the district court. Dismissing the
adversary at this point would constitute a waste of judicial resources,
and the parties’ resources. 6
Vinson filed the instant motion, arguing that the adversary proceeding should have
been dismissed in its entirety along with the main bankruptcy proceeding. As a
consequence of the Bankruptcy Court closing the Chapter 11, Vinson argues “that
this Court lacks jurisdiction over this matter in its entirety.” 7

(Rec. Doc. 1-2 at 2-3).
(Rec. Doc. 1-2 at 14).
4 (Rec. Doc. 1).
5 In re Deborah Ann Vinson, No. 16-12818 (Bankr. E.D. La. Oct. 22, 2018) (ECF No. 182).
6 Id.
7 (Rec. Doc. 24-1 at 4).
2
3

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DISCUSSION
Bankruptcy courts and, indeed, all “[f]ederal courts are courts of limited
jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)
(“They possess only that power authorized by Constitution and statute.”). “Where a
federal court rules in a matter over which it does not have jurisdiction, its decisions,
opinions and orders are without effect.” Matter of Majestic Energy Corp., 835 F.2d 87,
89 (5th Cir. 1988). By statute, district courts “have original and exclusive jurisdiction
of all cases under title 11” and “original but not exclusive jurisdiction of all civil
proceedings arising under title 11, or arising in or related to cases under title 11.” 28
U.S.C. § 1334.
Vinson does not argue that this Court does not have jurisdiction over its appeal
pursuant to 28 U.S.C. § 158(a)(1), which authorizes appellate review of judgments
entered by bankruptcy courts consistent with 28 U.S.C. § 157. 8 Nor does Vinson
contend the Bankruptcy Court lacked jurisdiction when the adversary proceeding
began. 9 Rather, Vinson argues that “now that the Bankruptcy Proceeding underlying
the Adversary Proceeding has been dismissed, this Court no longer enjoys any
exclusive nor original jurisdiction over the adversary proceeding and should utilize
its discretion to dismiss the appeal.” 10

In fact, Vinson asks in the alternative that this Court exercise its appellate jurisdiction and
consider its appeal on the merits.
9 (Rec. Doc. 24-1 at 9).
10 (Rec. Doc. 24-1 at 9).
8

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While this position is not without reason, it is contrary to law. 11 For it is
undisputed that if the adversary proceeding were still before the Bankruptcy Court,
and not yet appealed, then the closure of the main bankruptcy proceeding would not
have made the dismissal of the adversary proceeding a matter of course. Matter of
Querner, 7 F.3d 1199, 1201 (5th Cir. 1993) (“[N]othing in the statute governing
bankruptcy jurisdiction mandates automatic dismissal of related proceedings upon
termination of the underlying bankruptcy case.”). In fact, the “decision to retain
jurisdiction over related proceedings rests within the sound discretion of the
bankruptcy court.” Id. Of course, that dismissal of related proceedings is not
automatic does not mean jurisdiction should be retained—“as a general rule the
dismissal or closing of a bankruptcy case should result in the dismissal of related
proceedings.” Id. An adversary proceeding should not be dismissed only if retaining
the case in the federal system is warranted after consideration of four factors:
economy, convenience, fairness, and comity. Id. at 1202. These are same four factors
considered by federal district courts in deciding whether to retain jurisdiction over
pendent state law claims after federal claims are dismissed. Id.
Given their origin, this Court is comfortable applying the factors to determine
whether the adversary proceeding—now on appeal—should be dismissed. 12 Applying

“It might make sense . . . to conclude that jurisdiction over the [adversary proceeding] ceased when
the underlying bankruptcy case was dismissed. But Congress has not so defined bankruptcy
jurisdiction.” In re Carraher, 971 F.2d 327, 328 (9th Cir. 1992).
12 Vinson argues the Court should not even consider the factors because, unlike in Matter of Querner,
the Bankruptcy Court did not elect to retain jurisdiction. This is true but without meaningful
consequence. In Matter of Querner, the bankruptcy court closed the chapter 13 and then nearly a
month later entered an order granting a motion to retain jurisdiction for a limited purpose. Matter of
Querner, 7 F.3d at 1200. Here, there Bankruptcy Court conducted a two-day trial, then rendered a
judgment; then Vinson appealed the judgment; then the chapter 11 was dismissed. Presumably, this
11

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them, the Court concludes dismissal would be improper. First, it is much more
economical that this case remain in federal court. The bankruptcy court already
conducted a two-day trial. The matter is on appeal before this Court. The parties have
filed their briefs. It would be a great waste of time and judicial resources to dismiss
this case now. “[W]hen a case has proceeded through one court system and is almost
finished with there, the interest in judicial economy argues powerfully for keeping
the case in that court system to the end rather than starting from scratch in a
different system.” Chapman v. Currie Motors, Inc., 65 F.3d 78, 81 (7th Cir. 1995) (J.
Posner). Nor would it be convenient for the state court to repeat what has already
been done below. Nor would it be fair. A result has been reached in the first instance—
the Court agrees with Appellees that dismissing would “provide Vinson with the
opportunity to secure a ‘redo’ of the trial in this matter and potentially secure an
entirely different ruling.” 13 Finally, Vinson suggests that adopting the Bankruptcy
Court’s conclusion regarding jurisdiction would “further prohibit comity between the
Bankruptcy Court and the District Court.” 14 To borrow a phrase from the Fifth
Circuit: “Such Cheek!” Adam Joseph Resources v. CNA Metals Ltd., 17-20685, 2019
WL 1345409, at *9 (5th Cir. Mar. 26, 2019).

Court could remand to the Bankruptcy Court for it to determine whether it would elect to retain
jurisdiction, but it’s already made clear that it would not dismiss the proceeding. Matter of Querner is
distinguishable but only because application of its factors compel an opposite result—in part because
the case has proceeded into the appeal stage.
13
(Rec. Doc. 25 at 11).
14
(Rec. Doc. 24-1 at 8).

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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that the Motion to Dismiss the Entire Action from
Federal Jurisdiction (Rec. Doc. 24) is DENIED.
New Orleans, Louisiana, this 23rd day of April, 2019.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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