Boyd v. HSBC Bank Nevada, N.A.

Filing 4

ORDER ADOPTING REPORT AND RECOMMENDATION 1 ; 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. 11-7322
MICHAEL PATRICK MCINERNEY
and JEANIE ANN MCINERNEY,
Debtors.
_____________________________/
JAMES W. BOYD,
ADVERSARY PROCEEDING NO. 12-80083
Plaintiff,
CASE NO. 1:12-cv-999
v.
HON. ROBERT J. JONKER
HSBC BANK NEVADA, N.A.,
Defendant.
__________________________________/
ORDER
This case comes before the Court on Report and Recommendation from the Bankruptcy
Court for the Western District of Michigan (Docket # 1-1). Plaintiff James W. Boyd
(“Plaintiff”), the Trustee in this matter, filed a complaint to avoid a lien conveyed by Debtors
Michael and Jeanie McInerney (“Debtors”) to Defendant HSBC Bank Nevada, N.A.
(“Defendant”), pursuant to 11 U.S.C. §§ 544(a) and 547. Defendant failed to answer the
complaint, and Plaintiff subsequently filed a motion for entry of a default judgment against
Defendant. The Bankruptcy Court held a hearing on August 17, 2012 to address Plaintiff’s
motion, but Defendant did not appear. 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). (Docket # 1-1, at 1.) 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. (Id.)
After reviewing the Bankruptcy Court’s Report and Recommendation and the record
below, the Court grants Plaintiff’s motion for default and voids Defendant’s security interest in
the 2008 Yamaha Motorcycle, VIN #JYAVP27EX8A000426, as recommended by the
Bankruptcy Court. (Id.) While the Court acknowledges the uncertainty Stern created regarding
the constitutional authority of bankruptcy courts to enter final judgment in certain proceedings,
the Court does not believe Stern affects the Bankruptcy Court’s authority to enter a default
judgment in this action. However, 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.

IT IS SO ORDERED. The Clerk of Court shall enter Judgment.

Dated:

October 18, 2012

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