J&B REALTY ASSOCIATES, LLC v. HH&P MANUFACTURING, LLC

Filing 18

OPINION filed. Signed by Judge Mary L. Cooper on 12/7/2012. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
J&B REALTY ASSOCIATES, LLC,
Plaintiff,
v.
HH&P MANUFACTURING, LLC,
Defendant.

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CIVIL ACTION NO. 11-2885 (MLC)
O P I N I O N

THIS IS AN ACTION to recover damages for breach of a lease
(“Lease”).

(Dkt. entry no. 7, Am. Compl.)

The defendant — which

is named by the plaintiff as HH&P Manufacturing, LLC, trading as
HH&P Mfg, LLC, also known as Triad — is a limited liability
company.

(Id.)

THE COURT has been advised that two entities known as Triad
Group, Inc. (“TGI”) and H&P Industries, Inc. (“HPI”) have
petitioned for relief (“Bankruptcy Cases”) in the United States
Bankruptcy Court for the Eastern District of Wisconsin (“Wisconsin
Bankruptcy Court”).

(Dkt. entry no. 17, Suggestion Of Bankr.)

See Petition, In re Triad Group, Inc., No. 12-31923 (Bankr. E.D.
Wisc. Aug. 9, 2012), ECF No. 1; Petition, In re H&P Industries,
Inc., No. 12-31924 (Bankr. E.D. Wisc. Aug. 9, 2012), ECF No. 1.
HPI is TGI’s affiliate, and TGI is the ultimate owner of the
defendant.

See Statement Regarding Schedules & Statement Of

Financial Affairs & Reservation Of Rights, In re Triad Group,

Inc., No. 12-31923 (Bankr. E.D. Wisc. Aug. 23, 2012), ECF No. 7-1;
Statement Regarding Schedules & Statement Of Financial Affairs &
Reservation Of Rights, In re H&P Industries, Inc., No. 12-31924
(Bankr. E.D. Wisc. Aug. 23, 2012), ECF No. 6-1.

The individuals

controlling TGI, HPI, and the defendant appear to be the same:
David Haertle, Eric Haertle, and Donna Petroff.
at 2.)

(See Am. Compl.

See, e.g., List Of Equity Security Holders, In re Triad

Group, Inc., No. 12-31923 (Bankr. E.D. Wisc. Aug. 23, 2012), ECF
No. 7.

The plaintiff is listed as a creditor in the Bankruptcy

Cases.

See, e.g., List Of Creditors Holding 20 Largest Unsecured

Claims, In re Triad Group, Inc., No. 12-31923 (Bankr. E.D. Wisc.
Aug. 9, 2012), ECF No. 1.
AN ACTION is “related to” bankruptcy if the outcome of the
proceeding could conceivably have any effect on the estate being
administered in bankruptcy.

Nuveen Mun. Trust v. Withumsmith

Brown, P.C., 692 F.3d 283, 293-94 (3d Cir. 2012); see In re
Combustion Eng’g, 391 F.3d 190, 226 (3d Cir. 2004).

Furthermore,

an action is related to bankruptcy if the outcome could alter the
debtor’s rights, liabilities, options, or freedom of action —
either positively or negatively — and in any way impacts the
estate’s handling and administration; the entire action need not
be against the debtor or the debtor’s property only.
Resorts Int’l, 372 F.3d 154, 164 (3d Cir. 2004).

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See In re

PURSUANT TO 28 U.S.C. § (“Section”) 1412, a district court
“may transfer a case or proceeding under title 11 to a district
court for another district, in the interest of justice or for the
convenience of the parties”.

28 U.S.C. § 1412; see 28 U.S.C. §

1409(a) (stating “proceeding arising under title 11 or arising in
or related to a case under title 11 may be commenced in the
district court in which such case is pending”); Maritime Elec.
Co. v. United Jersey Bank, 959 F.2d 1194, 1212 (3d Cir. 1991)
(instructing that proper method for transferring related action
to bankruptcy court already hearing bankruptcy case is to change
venue from non-bankruptcy forum to bankruptcy forum under Section
1412, and then refer related action to bankruptcy court); Abrams
v. Gen. Nutrition Cos., No. 06-1820, 2006 WL 2739642, at *8
(D.N.J. Sept. 25, 2006) (finding Section 1412 applies to transfer
of action related to bankruptcy case).

In general, the forum

where the bankruptcy case is pending is the proper venue for all
actions related to that bankruptcy case.

Abrams, 2006 WL

2739642, at *9; see Hohl v. Bastian, 279 B.R. 165, 177 (W.D. Pa.
2002); Krystal Cadillac-Oldsmobile-GMC Truck, v. Gen. Motors
Corp., 232 B.R. 622, 627 (E.D. Pa. 1999).
THIS ACTION is related to the Bankruptcy Cases because the
business activities of TGI, HPI, and the defendant are
intertwined, and thus an outcome here will affect the estates

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being administered.

Also, a review of the Bankruptcy Cases

reveals that they are being actively litigated.

Thus, the

interests of justice and the convenience of the parties favor a
transfer of venue, as the Wisconsin Bankruptcy Court is in a
better position to determine how and to what extent the
plaintiff’s claims will affect (1) the bankruptcy estates at
issue, (2) the efficient administration of those estates, and (3)
asset distribution.

See 28 U.S.C. § 1412; Abrams, 2006 WL

2739642, at *9; Hohl, 279 B.R. at 178.
WHETHER the Lease contains a clause stating that any action
concerning the Lease may be litigated in New Jersey (“Forum
Clause”) is of no moment.

The parties may be precluded from

considering a transfer of venue due to the Forum Clause, but the
Court is not.

See Creekridge Capital v. La. Hosp. Ctr., 410 B.R.

623, 630-31 (D. Minn. 2009) (transferring action to Louisiana
where bankruptcy case was pending, even though guaranty agreement
set proper venue in Minnesota); Indep. Stationers v. Vaughn, No.
99-127, 2000 WL 1449854, at *7-8 (S.D. Ind. Jan. 3, 2000)
(transferring action to Oklahoma, even though agreement set
proper venue in Indiana).
THE COURT intends to transfer this action to the Eastern
District of Wisconsin immediately, as time is of the essence in

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view of the active Bankruptcy Cases.

For good cause appearing,

the Court will issue an appropriate order.1

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated:

December 7, 2012

1

The transferee district court should refer this action to
the Wisconsin Bankruptcy Court. See 28 U.S.C. § 157(a) (stating
“district court may provide that any or all cases under title 11
and any or all proceedings arising under title 11 or arising in
or related to a case under title 11 shall be referred to the
bankruptcy judges for the district”); Maritime Elec. Co., 959
F.2d at 1212. The extent of the Wisconsin Bankruptcy Court’s
authority over this action depends on whether it is (1) a “core
proceeding” or (2) a “non-core proceeding” otherwise related to a
case under title 11. 28 U.S.C. § 157(b)(1)-(4); see 28 U.S.C. §
157(b)(1) (stating bankruptcy court may enter order or judgment
in core proceeding); 28 U.S.C. § 157(c)(1) (stating bankruptcy
court submits proposed findings of fact and conclusions of law to
district court in non-core proceedings, and final order will be
entered by district court after considering same); see also
Mullarkey v. Tamboer (In re Mullarkey), 536 F.3d 215, 220-21 (3d
Cir. 2008) (discussing bankruptcy court’s authority). The
Wisconsin Bankruptcy Court will determine whether this action is
a core proceeding or related-to proceeding. See 28 U.S.C. §
157(b)(3); Certain Underwriters at Lloyd’s of London v. Otlowski,
No. 08-3998, 2009 WL 234957, at *2 (D.N.J. Jan. 29, 2009)
(stating “Section 157(b)(3) calls for the bankruptcy judge to
make the initial decision on whether a case is a core proceeding,
and its language is not ambiguous”); E. W. Trade Partners v.
Sobel WP (In re E. W. Trade Partners), No. 06-1812, 2007 WL
1213393, at *3-4 (D.N.J. Apr. 23, 2007) (same).
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