MANHART v. LITITZ MUTUAL INSURANCE COMPANY
Filing
8
DECISION AND ORDER ON DEFENDANTS MOTIONTO WITHDRAW ADVERSARY PROCEEDING denying 1 Motion to Withdraw Reference By JUDGE D. BROCK HORNBY. (clp)
Case 1:20-mc-00087-DBH Document 8 Filed 06/04/20 Page 1 of 3
PageID #: 160
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
IN RE:
GEORGE C. MITCHELL
DONNA M. MITCHELL,
AND
DEBTORS
_____________________________________
ANTHONY J. MANHART,
CHAPTER 7 TRUSTEE,
PLAINTIFF
V.
LITITZ MUTUAL INSURANCE
COMPANY,
DEFENDANT
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
CHAPTER 7
CASE NO. 1:19-bk-10167 MAF
ADVERSARY PROCEEDING
CASE NO. 20-01001
CIVIL NO. 1:20-MC-87-DBH
DECISION AND ORDER ON DEFENDANT’S MOTION
TO WITHDRAW ADVERSARY PROCEEDING
Under this District’s Local Rule 83.6(a), all cases and civil proceedings
arising under Title 11 are automatically referred to the bankruptcy court. The
defendant has moved to withdraw the reference of this adversary proceeding—a
contest over whether there is insurance coverage with respect to a 2018
residential fire in Pennsylvania, a non-core proceeding—under 28 U.S.C.
§ 157(d) and Federal Rule of Bankruptcy Procedure 5011(a). The Chapter 7
trustee for the debtors objects to the motion to withdraw. I heard oral argument
by telephone on June 3, 2020. I DENY the motion.
Case 1:20-mc-00087-DBH Document 8 Filed 06/04/20 Page 2 of 3
PageID #: 161
Under section 157(d), withdrawal of the reference is discretionary, and the
party seeking withdrawal bears the burden of demonstrating cause. Turner v.
Boyle, 425 B.R. 20, 23-24 (D. Me. 2010).
Factors to consider are: judicial
economy; uniformity of bankruptcy administration; reducing forum shopping
and confusion; conserving debtor and creditor resources; expediting the
bankruptcy process; and demand for a jury trial. Id. at 24. In this case, the
defendant insurance company has demanded a jury trial and has not consented
to the bankruptcy court conducting a jury trial. Def.’s Mot. at 5, 7 (ECF No. 1).
The bankruptcy court cannot conduct a jury trial unless the parties consent. 28
U.S.C. § 157(e). (The defendant’s motion to withdraw is timely.)
In its motion, the defendant says that judicial economy, uniformity of
bankruptcy administration, reducing confusion, and the jury demand all call for
removal of the reference. Mot. at 5-6. In its reply, it adds efficiency and speedy
determination of the dispute as factors supporting withdrawal. Reply at 2-3 (ECF
No. 5). I am not persuaded. I do not see how withdrawing the reference will
further any of those goals here.
This District’s bankruptcy judges are very
capable and run a tight ship. Unlike Article III judges, they are not distracted
by the demands of a criminal docket. This is not a complicated case where
“educat[ing] two different judges,” Reply at 3, need affect judicial or party
resources. As for the jury demand, insurance coverage disputes seldom reach a
jury, in part because disputes usually involve judicial interpretation of contract
language and because insurance companies often are wary of jury attitudes. If
this case ever reaches the stage of jury trial, there will be time enough to
withdraw the reference. At the moment, all civil jury trials are suspended in this
2
Case 1:20-mc-00087-DBH Document 8 Filed 06/04/20 Page 3 of 3
PageID #: 162
District due to the COVID-19 pandemic, and I do not know when they will
resume.
As Judge Torresen has observed, consideration of the section 157(d) goals
is affected by two limits on bankruptcy judges’ powers. First,
if the Bankruptcy Court lacks the authority to enter a final
judgment and would only be able to issue proposed findings
of fact and conclusions of law for the district court to review
de novo [as in a non-core proceeding like this insurance
coverage dispute], withdrawing the reference obviates the
need for an extra step of judicial review. Even where this
concern is implicated, district courts sometimes determine that
it would be useful to have the bankruptcy judge’s report and
recommended decision or that other factors override any
inefficiencies. Second, if one of the parties has a right to and
demands a jury trial before an Article III judge, withdrawing
the reference allows the same judge to preside over both
pretrial matters and the trial itself. Even where this concern
is implicated, district courts sometimes determine that it would
be more efficient to have the bankruptcy judge manage the
proceedings until the case is ready for trial, a procedure that
presents no Seventh Amendment problems.
In re Montreal Me. & Atlantic Ry. Ltd., No. 1:15–mc–22–NT, 2015 WL 3604335,
at *8 (D. Me. June 8, 2015) (emphasis added); accord Growe v. Bilodard, Inc.,
325 B.R. 490, 492 (D. Me. 2005) (in a case where jury trial is demanded, court
can deny motion to withdraw until case is ready for trial).
I conclude that the Turner v. Boyle factors are best promoted by leaving
the adversary proceeding in the bankruptcy court at this time.
The Motion to Withdraw the Reference is DENIED
WITHOUT PREJUDICE
to its
renewal when the case is ready for jury trial.
SO ORDERED.
DATED THIS 4TH DAY OF JUNE, 2020
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE
3
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?