Hagan v. E-Limidebt, Inc.

Filing 3

ORDER ADOPTING BANKRUPTCY COURT'S REPORT AND RECOMMENDATION to enter judgment in favor of Plaintiff against Defendant in the amount of $2,699.37; The Clerk of the Court shall enter Judgment; signed by Judge Robert J. Jonker (Judge Robert J. Jonker, ymc)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

In re:
BANKRUPTCY CASE NO. 10-09773
MARK BRIAN GIFFORD and
LEANNE GIFFORD,
Debtors.
_____________________________/
KELLY M. HAGAN,
Plaintiff,

ADVERSARY PROCEEDING NO. 11-80235

v.

DISTRICT COURT CASE NO. 1:11-CV-886

E-LIMIDEBT, INC.,

HON. ROBERT J. JONKER

Defendant.
_____________________________/
ORDER
This case comes before the Court on Report and Recommendation from the Bankruptcy
Court for the Western District of Michigan (docket # 1). Plaintiff, the Chapter 7 Trustee, filed a
complaint under 11 U.S.C. §§ 548 and 550 to recover allegedly fraudulent transfers by Debtors to
Defendant from April 2009 through November 2009 in the amount of $2,699.37. Complaint, Hagan
v. e-Limidebt, Inc. (In re Gifford), Adv. Pro. No. 11-80235 (Bankr. W.D. Mich. May 18, 2011), ECF
No. 4. Defendant failed to answer the complaint, and Plaintiff subsequently filed a motion for entry
of a default judgment against Defendant. Id. (ECF No. 8). The Bankruptcy Court held a hearing on
August 4, 2011, to address Plaintiff’s motion, but Defendant did not appear (docket # 1). The
Bankruptcy Court’s Report and Recommendation followed.

In its Report and Recommendation, the Bankruptcy Court concluded that default judgment
against Defendant was appropriate, and that the complaint constituted a core matter under 11 U.S.C.
§ 157(b)(2). Relying on the Supreme Court’s recent decision in Stern v. Marshall, ___ U.S. ___,
131 S. Ct. 2594 (2011), however, the Bankruptcy Court concluded it lacked the constitutional
authority to enter a final judgment in this matter and therefore submitted its Report and
Recommendation to this Court for the entry of judgment.
After reviewing the Bankruptcy Court’s Report and Recommendation and the record below,
the Court grants Plaintiff’s motion for default and enters a money judgment in favor of Plaintiff
against Defendant in the amount of $2,699.37 as recommended by the Bankruptcy Court. In entering
this Order, the Court does not reach the issue of whether Stern required the Bankruptcy Court to refer
the case to the Court for entry of judgment. It is undisputed the Court has jurisdiction to enter
judgment in this matter, and the Bankruptcy Court’s reference of the matter to the Court does not
constitute reversible error. Cf. In re Burkman Supply, Inc., 217 B.R. 223, 223 (W.D. Mich. 1998)
(“[T]he fact that the bankruptcy judge in this matter took the additional step and submitted this
matter to the Court by way of a report and recommendation does not constitute reversible error.”).
Therefore, in order to resolve this matter in an expeditious, efficient, and cost-effective manner, the
Court adopts the Bankruptcy Court’s recommendation to enter judgment in favor of Plaintiff, and
leaves the proper reach of Stern for another day, when the issue is actually contested by the parties.
IT IS SO ORDERED. The Clerk of Court shall enter Judgment.

Dated:

September 15, 2011

/s/ Robert J. Jonker
ROBERT J. JONKER
UNITED STATES DISTRICT JUDGE

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