Dooley et al v. M B Industries L L C et al

Filing 33

MEMORANDUM ORDER denying as premature 28 Renewed MOTION to Withdraw Reference filed by David M Dooley, Sr. Signed by Chief Judge S Maurice Hicks, Jr on 6/4/2018. (crt,McDonnell, D)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
DAVID M. DOOLEY, SR., ET AL.

CIVIL ACTION NO. 16-0110

VERSUS

JUDGE S. MAURICE HICKS, JR.

MB INDUSTRIES, L.L.C., ET AL.

MAGISTRATE JUDGE HAYES

MEMORANDUM ORDER
Before the Court is Petitioners David M. Dooley, Sr., individually and as Trustee
for the BD 2008 Family Trust No. 1, Brenda Dooley, individually and as Trustee for the
DMD 2008 Family Trust No. 1, David M. Dooley, Jr., and Chris Vallot’s (collectively the
“Dooley Parties”) “Renewed Motion to Withdraw Reference” (Record Document 28) reurging their previous Motion to Withdraw Reference (Record Document 1). Defendants
Carmel Enterprises, LLC, Carmel Foods, LLC, Carmel Group, Inc., X-Treme Doors, LLC,
Frederick J. Gossen, Jr. (“Gossen”), Hallwood Financial Limited, Hallwood Modular
Buildings, LLC, Gert Lessing (“Lessing”), and Anthony Gumbiner (“Gumbiner”)
(collectively the “Defendants”) have opposed the Motion. See Record Document 31. For
the reasons contained herein, the Dooley Parties’ Motion is DENIED.
PROCEDURAL BACKGROUND
On March 1, 2018, the Court denied the Dooley Parties’ initial Motion to Withdraw
Reference, finding the Dooley Parties had waived their right to a jury trial for their
rescission claims because said claims would “necessarily require the resolution” of the
Dooley Parties’ claims against the debtor, MBI Industries, LLC, and were “integral to the
restructuring of the debtor-creditor relationship.” See Record Document 25 at 27. Later in
the ruling the Court, addressing the Dooley Parties’ argument that they properly
requested a jury trial for the Defendants’ counterclaims, stated, “[i]f it is determined at a
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later date that Defendants’ counterclaims require a jury trial, then the Dooley Parties may
seek withdrawal at that time; but for now, the Court finds it more appropriate for the matter
to remain in Bankruptcy Court.” Id. at 28.
On April 19, 2018, the Dooley Parties filed the instant “Renewed Motion to
Withdraw Reference” re-urging their initial motion since “all pretrial matters [relating to the
counterclaims] have been completed.” Record Document 28-1 at 2. The Dooley Parties
argue that since the constitutional right to a jury trial has been invoked with respect to the
Defendants’ counterclaims, their motion to withdraw should be granted. See id. at 4. The
Defendants opposed the motion on April 30, 2018, arguing primarily that the Dooley
Parties’ renewed motion is premature. See Record Document 31 at 7.
LAW AND ANALYSIS
The Dooley Parties argue the Court in its Memorandum Ruling reserved them the
right to “re-file the motion [to withdraw the reference] after the Bankruptcy Court
completed preliminary matters relating to the counterclaims filed against [the Dooley
Parties].” Record Document 28-1 at 1-2. However, the Dooley Parties misconstrued the
Court’s pronouncement in its Memorandum Ruling. The Court stated, ““[i]f it is determined
at a later date that Defendants’ counterclaims require a jury trial, then the Dooley Parties
may seek withdrawal at that time….” Record Document 25 at 28. It is clear from the
Court’s ruling that a precondition for the Dooley Parties re-urging their Motion to Withdraw
Reference is that the Bankruptcy Court determine that the Dooley Parties have a right to
a jury trial first. Any other interpretation of the Court’s statement is illogical. The Court did
not instruct the Dooley Parties to re-urge their motion once “all pretrial matters [relating
to the counterclaims] have been completed.” The Dooley Parties’ argument is incorrect.

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If the Bankruptcy Court determines that the Dooley Parties have a right to jury trial
on the counterclaims, then the Dooley Parties may re-file their motion to withdraw
reference. As Defendants assert, “[a] bankruptcy court is an appropriate tribunal for
determining whether there is a right to a trial by jury of issues for which a jury trial is
demanded.” Am. Universal Ins. Co. v. Pugh, 821 F.2d 1352, 1355 (9th Cir. 1987); In re
Energy Res. Co., Inc., 49 B.R. 278, 281 (Bankr. D. Mass. 1985); In re Washington Mfg.
Co., 133 B.R. 113, 116 (M.D. Tenn. 1991); In re Envisionet Computer Servs., Inc., 276
B.R. 1, 6 (D. Me. 2002); In re Commercial Maint. & Repair, Inc., 2007 WL 2815211, *3
(N.D. Ohio 2007) (reasoning that the right to a jury trial is not itself a jury question;
therefore, the bankruptcy court could determine this issue itself); see also In re Wolfe, 68
B.R. 80, 88 (Bankr. N.D. Tex. 1986), approved sub nom. M & E Contractors, Inc. v.
Kugler-Morris Gen. Contractors, Inc., 67 B.R. 260 (N.D. Tex. 1986), citing Hayutin v.
Grynberg, 52 B.R. 657, 660 (Bankr. D. Colo. 1985) (“Regardless of whether this court has
the authority to hear jury trials, it still possesses the power to determine whether there is
a right to trial by jury.”). It is clear that the Bankruptcy Court has not determined whether
the Dooley Parties are entitled to a jury trial since the Dooley Parties bring this argument
before this Court, and not the Bankruptcy Court. Until the Bankruptcy Court determines
the Dooley Parties are entitled to a jury trial regarding Defendants’ counterclaims, the
Dooley Parties’ renewed motion is premature.
CONCLUSION
According to the Court’s Memorandum Ruling issued March 1, 2018, the Dooley
Parties cannot re-urge their Motion to Withdraw Reference until the Bankruptcy Court
determines they are entitled to a jury trial regarding the Defendants’ counterclaims. See

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Record Document 25 at 28. The Dooley Parties have failed to bring this issue before the
Bankruptcy Court. Therefore, the Dooley Parties’ “Renewed Motion to Withdraw
Reference” (Record Document 28) is DENIED as premature.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 4th day of June, 2018.

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