Kelly v. Power Home Solar, LLC et al

Filing 41

OPINION AND ORDER Lifting the Stay. Denying 13 Motion to Remand to State Court; denying as moot 17 Motion to Compel; denying as moot 17 Motion to Dismiss; denying as moot 18 Motion to Dismiss for Lack of Jurisdiction; denying as moot 19 Motion to Dismiss; denying as moot 36 Motion to Dismiss for Failure to State a Claim; denying as moot 37 Motion to Dismiss. Defendants may refile or file a new/updated motions no later than 3/14/2025. Plaintiff's response brief to any Motion to Dismiss is due by 3/24/2025 and Defendants' Reply is due by 3/31/2025. Signed by District Judge Algenon L Marbley on 3/5/2025. (cw)

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
STEVEN KELLY,
Plaintiff,
v.

POWER HOME SOLAR, LLC, et al.,
Defendants.

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Case No. 1:24-cv-00209
Judge Algenon L. Marbley
Magistrate Judge Elizabeth Preston
Deavers

OPINION & ORDER
This matter comes before this Court on Plaintiff Steven Kelly’s Motion to Remand (the
“Motion”) (ECF No. 13). For the reasons set forth below, Plaintiff’s Motion to Remand (ECF No.
13) is DENIED.
I.

BACKGROUND

On March 7, 2024, Plaintiff Steven Kelly, an Ohio resident, filed a complaint against a
solar power company, Power Home Solar, LLC, d/b/a, Pink Energy (“Pink Energy”); a not-forprofit financial cooperative, Digital Federal Credit Union (“DFCU”); a 25% owner in Pink Energy,
Trivest Partners, L.P. (“Trivest”); founder and CEO of Pink Energy, Jayson Waller; and alleged
“employee/supervisor” and “employee/manager” of Pink Energy Paul Grysiuk and Jake Hynes,
respectively. (ECF No. 3). The only Ohio resident defendants are Grysiuk and Hynes. On April
17, 2024, Defendant Trivest removed the action to this Court for related bankruptcy jurisdiction.

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(ECF No. 1). On May 15, 2024, Plaintiff filed an Amended Complaint before filing the Motion.
(ECF No. 12).1 Each party relies on the Amended Complaint in their briefing.
The

Amended

Complaint

includes

claims

for

contract

breach,

fraudulent

misrepresentation, negligent misrepresentation, negligent hiring and training, violation of the Ohio
Consumer Sales Practices Act, civil conspiracy, and alter ego. (Id.). The claims arise out of a sales
agreement and associated loan agreement for the sale and installation of a solar energy system.
Plaintiff alleges various wrongful actions in connection with the sale were committed by “Pink
Energy Group” which Plaintiff defines as “Defendant Pink Energy and/or Defendant Trivest,
and/or Defendant Waller, and/or Defendant Grysiuk, and/or Defendant Hynes.” (Id. ¶ 10). The
Amended Complaint alleges that the Pink Energy Group trained and encouraged employees to use
“hard sell tactics” in an attempt to sell their solar panel systems and loan products. (Id. ¶¶ 49–63).
Plaintiff alleges the tactics used were deceptive, the Pink Energy Group pushed misleading and
false information, and the Pink Energy Group trained and directed sales agents to use the deceptive
hard sell tactics. (Id. ¶¶ 52–53). These tactics included misrepresenting cash incentive and tax
credit opportunities, providing false information about cost offsets, and hiding financing fees. (Id.
¶¶ 49–63).
On April 17, 2024, Defendant Trivest removed the case to this Court for related bankruptcy
jurisdiction. (ECF No. 1). Trivest argues that this court has related bankruptcy jurisdiction because
Pink Energy is a debtor in ongoing bankruptcy proceedings. (Id.). An order from the United States
Bankruptcy Court for the Western District of North Carolina (the “Bankruptcy Court”) indicates
that Defendant Pink Energy is the debtor in a bankruptcy proceeding and the Bankruptcy Court

1

Plaintiff has since filed a Second Amended Complaint to correct the spelling of Jake Hyne’s name (spelled Jake
Hines in prior complaints). (ECF No. 35). For consistency purposes, this Court will reference the same complaint
from parties’ briefings on the Motion to Remand.

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granted a motion to modify the automatic stay. (ECF No. 1-2). The stay was modified to allow
cases against Pink Energy to proceed in United States District Court for the Southern District of
Ohio. (Id.). The Bankruptcy Court noted “the entry of judgment against [Pink Energy] in the
litigation in the United States District Court for the District of Ohio would not result in detriment
to the estate of the Debtor, as any such judgment creditor would not be seeking to recover from
assets in this bankruptcy estate, but instead would seek recovery from insurance coverage (to the
extent available), and/or from other non-debtor defendants in the litigation.” (Id.). Defendants
Trivest and Pink Energy filed briefs in opposition to the Motion. (ECF Nos. 24, 25). Defendant
DFCU filed a limited joinder in Pink Energy’s opposition. (ECF No. 26).
II.

STANDARD OF REVIEW

Trivest removed this case pursuant to 28 U.S.C. §§ 1452 and 1334 because this is a case
“relating to” bankruptcy proceedings. (ECF No. 1). Generally, removal of “any claim or cause of
action in a civil action” is authorized under 28 U.S.C. § 1452 when a court has jurisdiction under
28 U.S.C. § 1334. In re HNRC Dissolution Co., 761 F. App'x 553, 559–60 (6th Cir. 2019). Pursuant
to § 1334(b), district courts have jurisdiction “of all civil proceedings arising under title 11, or
arising in or related to cases under title 11.” 28 U.S.C. § 1334(b). When determining jurisdiction
“the court need only ‘determine whether a matter is at least ‘related to’ the bankruptcy.’” In re
HNRC Dissolution Co., 761 F. App'x at 559–60 (quoting Mich. Emp't. Sec. Comm'n v. Wolverine
Radio Co. (In re Wolverine Radio Co.), 930 F.2d 1132, 1141 (6th Cir. 1991)).
The Sixth Circuit finds that “related to” jurisdiction is governed by an expansive definition
and requires this court to ask, “whether the outcome of that proceeding could conceivably have
any effect on the estate being administered in bankruptcy.” Id. (quoting Lindsey v. O'Brien, Tanski,
Tanzer and Young Health Care Providers of Conn. ( In re Dow Corning Corp.), 86 F.3d 482, 489
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(6th Cir. 1996). “In other words, there is ‘related to’ jurisdiction if the outcome of the proceeding
could conceivably ‘alter the debtor's rights, liabilities, options, or freedom of action (either
positively or negatively)’ or otherwise impact ‘the handling and administration of the bankrupt
estate.’ Id. at 560 (quoting In re Dow Corning Corp., 86 F.3d at 489).
III.

LAW & ANALYSIS

Trivest removes this case and argues this Court has jurisdiction on one ground: because the
case is “related to” bankruptcy proceedings pursuant to 28 U.S.C. §§ 1452 and 1334. (ECF No. 1).
Plaintiff argues that this Court has no jurisdiction and, if it did, this Court should abstain. (ECF
No. 1 at 2).
A. “Related to” Jurisdiction
First, as Defendants Trivest and Pink Energy have noted, Pink Energy is the debtor in the
pending bankruptcy case and is a named defendant here. (ECF Nos. 24 at 9; 25 at 4). Indeed, a
cause of action is “related to” a bankruptcy proceeding for purposes of jurisdiction if the cause of
action’s “outcome could alter the debtor's rights, liabilities, options, or freedom of action (either
positively or negatively) and which in any way impacts upon the handling and administration of
the bankrupt estate.” In re Dow Corning Corp., 86 F.3d at 489. Here, a debtor’s rights and
liabilities are directly impacted as the debtor is named and being directly sued. See e.g., Nemsa
Establishment, S.A. v. Viral Testing Sys. Corp., No. 95 CIV. 0277 (LAP), 1995 WL 489711, at *6
(S.D.N.Y. Aug. 15, 1995) (finding “there can be no dispute that there is jurisdiction over” the
claims against only the debtor including specific performance and breach of contract claims); In
re Chateaugay Corp., 213 B.R. 633, 639 n.6 (S.D.N.Y. 1997) (“Clearly, the claims against the
Debtors themselves . . . have a ‘conceivable effect’ on their estates. The issue is whether successor
liability claims against non-debtor . . . have such a ‘conceivable effect.’”).
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Plaintiff argues Defendant Trivest has failed to prove this case would impact the
bankruptcy estate. When addressing the abstention argument (discussed further below), Plaintiff
references the effect of the Bankruptcy Court’s Order (the “Order”) modifying automatic stay.
(ECF No. 13 at 13). The Order allowed the debtor to be a named defendant “in the United States
District Court for the District of Ohio, with the further limitation and restriction that any recovery
on any judgment against the Debtor would be limited to available insurance coverage, or recovery
from other non-debtor defendants.” (ECF No. 1-2 at 3). Plaintiff relies on this language to argue
that the Order means litigation would not impact the bankruptcy estate if Plaintiff only pursued
Pink Energy’s available insurance money. (ECF No. 13 at 13). Based on the Order, Plaintiff argues
this matter is unrelated to a bankruptcy proceeding because Plaintiff is not seeking liability from
Pink Energy other than to the extent of its insurance. (Id.).
While the Order limits the “recovery” on judgment against the debtor to available insurance
coverage, this Court’s judgment is not limited to available insurance coverage. (ECF No. 1-2 at 3).
The bankruptcy court granted relief so Plaintiff could “pursue applicable insurance monies.” (Id.).
Nothing in the Complaint, however, limits Plaintiff’s request for relief to available insurance.
Even if the judgment in this case would only impact Pink Energy’s insurance, this Court
notes that generally, a debtor’s interest in insurance policies is property of the debtor’s bankruptcy
estate under 11 U.S.C. § 541(a)(1). In re Dow Corning Corp., 86 F.3d at 495. For example, the
court in In re Dow Corning Corp. held that a finding of “related to” jurisdiction over claims against
both the debtor and non-debtors was supported by the debtors and non-debtors sharing joint
insurance. Id. The Sixth Circuit noted that the insurance policy at issue was covered under the
expansive definition of property of an estate under 11 U.S.C. § 541(a)(1). Id. The debtors and nondebtors argued that “related to” jurisdiction existed as to the claims against the non-debtors

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because there was joint insurance and permitting several trials against the non-debtors, without the
debtor, may result in the non-debtors making claims for insurance before the debtor is able to make
any claims of its own. Id. The district court found no basis for jurisdiction over the non-debtors’
claims because no judgment had been entered against the non-debtors and the non-debtors did not
have any claims pending against the joint insurance policies. The Sixth Circuit found the district
court erred because an immediate impact of the estate is not a prerequisite to finding “related to”
jurisdiction. Id. The court then held “related to” jurisdiction over the non-debtors was supported
by the debtor’s interest in their insurance policies threatened by causes of action against non-debtor
defendants who were also co-insurers. Id.
The impact on a debtor’s insurance is far less attenuated as the debtor is named in the civil
proceeding. This Court need not look at whether the outcome of this case would result in other
parties having claims against the debtor’s insurance. Instead, this case involves a direct impact on
the debtor’s insurance. See e.g., Landry v. Exxon Pipeline Co., 260 B.R. 769, 784 (Bankr. M.D.
La. 2001) (“Most courts addressing whether “property of the estate” includes insurance policies
have held that an insurance policy owned by the debtor is property of the estate under 11 U.S.C. §
541.53.”). This Court thus finds that claims against the debtor, Pink Energy, are related to the
bankruptcy proceeding.
The next inquiry is whether the claims against the non-debtors are similarly “related to”
the bankruptcy proceeding. The cause of action “‘need not necessarily be against the debtor or
against the debtor's property’ to satisfy the requirements for ‘related to’ jurisdiction. In re Dow
Corning Corp., 86 F.3d at 489. For example, in In re Dow Corning Corp., the court found that the
district court had subject matter jurisdiction over claims pending against not only the Chapter 11
debtor but also the non-debtors when there was a possibility of contribution or indemnification

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liability. In re Dow Corning Corp., 86 F.3d at 494. In that case, the non-debtors removed claims
in which they were named defendants with the debtor. Id. at 486. When analyzing whether the
district court had subject matter jurisdiction over the claims pending against the non-debtor
defendants pursuant to 28 U.S.C. § 1334(b), the Sixth Circuit found that “[c]laims for
indemnification and contribution, whether asserted against or by [the debtor], obviously would
affect the size of the estate and the length of time the bankruptcy proceedings will be pending, as
well as [the debtor]'s ability to resolve its liabilities and proceed with reorganization.” In re Dow
Corning Corp., 86 F.3d at 494. The possibility of the debtor to be held liable to non-debtors for
contribution or indemnification claims “establish[ed] a conceivable impact on the estate in
bankruptcy.” Id. at 488, 486.
Plaintiff maintains that, in order to show how the case against non-debtors impact the
debtor’s bankruptcy proceedings, the non-debtor is required to show that the bankrupt company
must indemnify or contribute to the defense of the moving party. (ECF No. 13 at 11). In the case
sub judice, Defendants do not claim any indemnification or contribution obligations. (ECF Nos.
24 at 9–10; 25 at 4–5). But non-debtors need not make such a showing.
The decision in In re Dow Corning Corp, however, emphasizes that “when [a] plaintiff
alleges liability resulting from the joint conduct of the debtor and non-debtor defendants,
bankruptcy jurisdiction exists over all claims under section 1334.” In re Dow Corning Corp., 86
F.3d at 492 (citing In re Salem Mortgage Co., 783 F.2d 626, 634 (6th Cir.1986). The court noted
the significance of the extent to which parties are “intertwined” and relies on a Fifth Circuit
decision supporting this principle:
The plaintiff has filed one complaint against the defendants seeking liability for
their joint conduct. Success against any of the defendants will have a potential
effect on the estate. For example, if Dr. Wood and his wife are held liable but
Barham is not, the bankrupt estate may bear the entire burden of the judgment. If,
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on the other hand, Barham is found jointly liable, the estate may bear only a portion
of the judgment. Moreover, in filing the complaint, the plaintiff challenged the
combined actions of both the debtors and Barham, a non-debtor. Resolution of the
dispute will necessarily involve, therefore, consideration of Barham's involvement
in those actions. We find support in the Court of Appeals for the Sixth Circuit and
lower courts, which have held that when the plaintiff alleges liability resulting from
the joint conduct of the debtor and non-debtor defendants, bankruptcy jurisdiction
exists over all claims under section 1334.
Id. at 492 (quoting In re Wood, 825 F.2d 90, 93–94 (5th Cir.1987)). The Sixth Circuit explained
the importance of “[t]he degree of identity between a debtor and non-debtor codefendants.” In re
Dow Corning Corp., 86 F.3d at 492 (citing A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009 (4th
Cir.1986)). The court referenced these principles when examining the contribution and
indemnification liability and finding the district court had “related to” subject matter jurisdiction
over claims against codefendant non-debtors because the nature of the claims against the debtor
and non-debtor defendants were closely related. Id. at 493.
Both Plaintiff and Defendant discuss In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig.,
323 F. Supp. 2d 861, 870 (S.D. Ohio 2004), in which the court found the defendants’
indemnification and contribution claims could conceivably alter the bankruptcy estate. (ECF Nos.
13 at 11; 24 at 9; 25 at 6). Plaintiff’s argument relies on the indemnification and contribution
argument made by the non-debtors in the case. (ECF No. 13 at 11-12). Although the
indemnification and contribution arguments were a significant part of the court’s decision, before
reaching its finding, the court noted that jurisdiction exists when “the conduct of the non-debtor
defendants and . . . the debtor, was ‘indisputably intertwined’ and the theories of liability asserted
by the plaintiffs were “’necessarily interconnected with [the] Defendants' rights to contribution.’”
In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323 F. Supp. 2d at 870 (quoting In re
WorldCom, Inc. Securities Litig., 293 B.R. 308, 321 (S.D.N.Y.2003). The court held that a finding
of “related to” jurisdiction was supported because the allegations against the non-debtor
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defendants stemmed from the roles they played in the debtor’s operations to the extent that if the
debtor committed no wrong, the plaintiffs would need to prove their claims against the nondebtors. Id. at 871.
Similarly, in the case sub judice, the nature of the claims against the debtor defendant, Pink
Energy, and the non-debtor defendants are closely related and “indisputably intertwined.”
Plaintiff’s Amended Complaint names each defendant, but defines the non-debtor and debtor
defendants (except DFCU) as “Pink Energy Group.” (ECF No. 12 ¶ 10). Plaintiff alleges fourteen
causes of action: ten are against the Pink Energy Group and DFCU; one is against only DFCU;
one is a declaratory judgment involving Pink Energy and the Pink Energy Group; one is a
declaratory judgment involving Pink Energy and DFCU; and one is a declaratory judgment
involving Pink Energy and Defendant Waller. (Id. ¶¶ 91–231).
The first cause of action is against Pink Energy Group and DFCU for breach of contract.
(Id. ¶¶ 91–98). Plaintiff alleges that “[t]he Pink Energy Group has breached the terms of the Sales
Agreement by failing to deliver a solar system that meets industry standards; by failing to install
the system in a workmanlike manner; by failing to competently install and connect the various
components of the system, by failing to activate the system according to the Sales Agreement and
failing to maintain and or repair flaws in the system which occurred and continue to occur to the
present date.” (Id. ¶ 94). Plaintiff also alleges that, pursuant to the “Holder Rule” Notice in the
Loan Agreement, DCFU is subject to the same claims asserted against Pink Energy Group. (Id. ¶
98).
Similarly, the second cause of action is a fraudulent misrepresentation claim and alleges
“[t]he Pink Energy Group made false representations regarding facts material to the purchase,
installation, performance, and maintenance and repair of their solar system . . . .” (Id. ¶ 104).

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Plaintiff also alleges that “The Pink Energy Group possessed actual and/or constructive knowledge
of the falsity of their representations . . . . . [and] [t]he Pink Energy Group made the fraudulent and
false misrepresentations to matters of material fact . . . with the intent to mislead Plaintiff into
relying on such fraudulent and false misrepresentations.” (Id. ¶ ¶ 104–05). Plaintiff also states that
DFCU acted by and through Pink Energy and pursuant to the “Holder Rule” Notice in the Loan
Agreement, is subject to the same claims asserted against Pink Energy Group. (Id. ¶¶ 106, 113).
The third and fourth causes of action are against Pink Energy Group and DFCU. While the
claims focus on the actions of the Pink Energy Group, they allege that the Pink Energy Group
acted in a dual agency relationship with DFCU and/or acted by and through their agent, Pink
Energy, and further that, pursuant to the “Holder Rule” Notice in the Loan Agreement, is subject
to the same claims asserted against Pink Energy Group. (Id. ¶¶ 117–118, 124, 127, 129, 135).
The seventh, eighth, ninth, and eleventh causes of actions are also against Pink Energy
Group and DFCU and focus on the actions of the Pink Energy Group. (Id. ¶¶ 155 –80). These
causes of action also allege DFCU, pursuant to the “Holder Rule” Notice in the Loan Agreement,
is subject to the same claims asserted against Pink Energy Group. (Id. ¶¶ 163, 169, 184).
The tenth cause of action is regarding civil conspiracy and alleges defendant DFCU acted
in concert with the Pink Energy Group in facilitating fraudulent conduct. (Id. ¶ 190). The twelfth
cause of action is only against DFCU, but still alleges its actions were “an integral part of the Pink
Energy Group and [DFCU’]s fraudulent scheme.” (Id. ¶ 213). The thirteenth cause of action is to
hold Defendant Waller personally liable, For the fourteenth cause of action, Plaintiff alleges
specific actions of the Pink Energy Group and further alleges DFCU and Trivest acted in concert
with the Pink Energy Group. It also alleges that pursuant to the “Holder Rule” Notice in the Loan

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Agreement, DFCU is subject to the same claims asserted against Pink Energy Group. (Id. ¶¶ 227,
228, 231).
In each cause of action involving Pink Energy Group, Plaintiff’s allegations mainly
reference actions of Pink Energy Group which demonstrates the extent the debtors and non-debtors
are indisputably intertwined. Although DFCU is not included in Pink Energy Group, as explained
above, the allegations are all linked to the actions of Pink Energy Group. Therefore, this court
finds that it has “related to” bankruptcy jurisdiction here.
B. Abstention
Plaintiff argues that if this Court finds it has jurisdiction because this is a case “relating to”
bankruptcy proceedings, this Court should nonetheless abstain from hearing the matter or
equitably remand this case to state court. (ECF No. 13 at 12–14).
1. Discretionary Abstention
This Court has discretion to abstain under 28 U.S.C. § 1334(c)(1) or to equitably remand
under 28 U.S.C. § 1452(b). Under Section 1334(c)(1), federal courts consider various factors
including: “1) the effect or lack of effect on the efficient administration of the estate if a
court abstains; 2) the extent to which state law issues predominate over bankruptcy issues; 3) the
difficulty or unsettled nature of the applicable state law; 4) the presence of a related proceeding
commenced in state court or other non-bankruptcy court; 5) the jurisdictional basis, if any, other
than 28 U.S.C. § 1334; 6) the degree of relatedness or remoteness of the proceeding to the main
bankruptcy case; 7) the substance rather than form of an asserted ‘core’ proceeding; 8) the
feasibility of severing state law claims from core bankruptcy matters to allow judgments to be
entered in state court with enforcement left to the bankruptcy court; 9) the burden of this court's
docket; 10) the likelihood that the commencement of the proceeding in bankruptcy court involves
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forum shopping by one of the parties; 11) the existence of a right to a jury trial; 12) the presence
in the proceeding of non-debtor parties; and 13) any unusual or other significant factors.” In re
Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323 F. Supp. 2d at 885 (quoting Mann v. Waste
Mgmt. of Ohio, Inc., 253 B.R. 211, 214 (N.D.Ohio 2000)).
The analysis under § 1334(c)(1) is largely the same as under § 1452(b). Section
1452(b) provides, “The court to which such claim or cause of action is removed may remand such
claim or cause of action on any equitable ground.” 28 U.S.C. § 1452(b). Courts consider: “1)
duplicative and uneconomical use of judicial resources in two forums; 2) prejudice to the
involuntarily removed parties; 3) forum non conveniens; 4) the state court's ability to handle a suit
involving questions of state law; 5) comity considerations; 6) lessened possibility of an
inconsistent result; and 7) the expertise of the court in which the matter was originally pending.” In
re Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323 F. Supp. 2d at 885 (quoting Mann, 253 B.R.
at 214–15).
Plaintiff argues this Court should abstain because Trivest have not asserted how this case
impacts the Pink Energy Bankruptcy and that the Bankruptcy Court for the Western District of
North Carolina decided this matter would not affect the bankruptcy estate so long as Plaintiff only
pursued Pink Energy’s insurance monies. (ECF No. 13 at 12–13). Plaintiff asserts he is not seeking
liability from Pink Energy other than from its insurance monies. As this Court has decided, this
case is related to the Pink Energy bankruptcy proceeding as insurance policies are part of the
bankruptcy estate. Further, while the Bankruptcy Court may have modified the stay and stated that
recovery of any judgment would be limited to insurance monies, this Court’s final judgment does
not have the same limitations based on Plaintiff’s request for relief.

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Plaintiff also argues that this case involves state law claims, and “comity counsels in favor
of state-court resolution of state-law claims.” (ECF No. 13 at 13). Nonetheless, as Trivest has
argued, this Court is familiar “with the facts and legal issues in the near twenty Pink Energy/Waller
lawsuits Plaintiff’s counsel has brought in federal court, all being close to carbon copies.” (ECF
No. 25 at 6).
Based on Plaintiff’s arguments and consideration of the factors used to determine
abstention, this Court does not find discretionary abstention appropriate here.
2. Mandatory Abstention
Plaintiff argues generally for abstention under § 1334 but only provides support for
discretionary abstention. (ECF No. 13 at 12–14). Under § 1334, however, there is a provision for
mandatory abstention which applies when: (1) a timely motion is made; (2) the claim or cause of
action is based on state law; (3) the claim or cause of action is “related to” a bankruptcy case, but
did not “arise in” or “arise under” the bankruptcy case; (4) the action could not have been
commenced in federal court absent § 1334 jurisdiction; (5) the action is commenced in state forum
of appropriate jurisdiction; and (6) the action can be timely adjudicated in state court. 28 U.S.C.
§ 1334(c)(2); see also In re Dow Corning Corp., 86 F.3d at 497.
The party seeking mandatory abstention bears the burden of demonstrating that each
requirement is satisfied. In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323 F. Supp. 2d at
881. While Plaintiff references abstention under § 1334, neither party specifically addressed
mandatory abstention under § 1334(c)(2). Faced with an inadequate argument, this Court feels
constrained in applying the requirements under § 1334(c)(2). Out of an abundance of caution, this
Court has nonetheless examined each requirement based on the information provided in the
briefing and pleadings and has found that mandatory abstention would be improper.
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a. Timely Motion Requirement
As to the first requirement, this Court finds that a timely motion was not made for
abstention under § 1334(c)(2), as Plaintiff did not argue for mandatory abstention in the Motion.
See MA Equip. Leasing I LLC v. Tilton, No. 2:09-CV-880, 2010 WL 11538520, at *10 (S.D. Ohio
Aug. 19, 2010) (finding no timely motion was made thus argument of mandatory abstention was
waived when plaintiffs failed to properly raise their argument in their motion to remand and make
no reference to mandatory abstention).
b. State Law and “Related To” Bankruptcy Requirements
Turning to the second requirement, Plaintiff has not asserted any federal claims. With
respect to the third requirement, mandatory abstention does not apply to cases that “arise in” or
“arise under” a title 11 bankruptcy case. It applies if the cause of action is “related to” a bankruptcy
but could “exist outside of bankruptcy.” In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323
F. Supp. 2d at 874 (quoting In re Webb, 227 B.R. 494, 497 (Bankr.S.D.Ohio 1998). A cause of
action is “arising under title 11” when it is “created by or determined by a statutory provision
of title 11.” Id. (quoting Webb, 227 B.R. at 497). Causes of action are “arising in” title 11 when
those proceedings “by their very nature, could only arise in bankruptcy cases.” In re Wolverine
Radio Co., 930 F.2d at 1144. The claims here are for fraud, contract breach, negligence, violation
of the Ohio Consumer Sales Practices Act, civil conspiracy, and alter ego. (ECF No. 12). The
causes of action could exist outside of the bankruptcy. It was not “created by or determined by a
statutory provision of title 11” and “by [its] very nature” this case could arise outside of bankruptcy
cases.

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c. Absence of Other Jurisdiction Requirement
The fourth requirement is satisfied as this Court finds it does not have diversity jurisdiction
under 28 U.S.C. § 1332(a)(1) or federal question jurisdiction under 28 U.S.C. § 1331. CPC
Livestock, LLC v. Fifth Third Bank, Inc., 495 B.R. 332, 351 (W.D. Ky. 2013) (finding same after
examining whether parties were fraudulently joined).
While not addressed in the context of abstention, diversity jurisdiction was briefed by
Plaintiff and Defendant Pink Energy. (ECF Nos. 13 at 6–10; 24 at 4 –6). This case was removed
by Trivest on one ground, “related to” bankruptcy jurisdiction, but Plaintiff also maintained that
Trivest failed to argue sufficiently diversity jurisdiction in its removal. (ECF No. 13 at 6).
Defendant Trivest did not respond because diversity jurisdiction was not the ground for removal.
(ECF No. 25 at 2). Defendant Pink Energy responded that Defendants Grysiuk and Hynes were
fraudulently joined; thus, this Court has diversity jurisdiction. (ECF No 24 at 4 –6).
Diversity jurisdiction requires that each defendant be a citizen of a state different from that
of each plaintiff and requires and a claim for over $75,000. 28 U.S.C. § 1332(a)(1); see also
Roberts v. Mars Petcare US, Inc., 874 F.3d 953, 955 (6th Cir. 2017). “A fraudulently joined party
cannot defeat a court's subject matter jurisdiction.” Johnson v. DePuy Orthopaedics, Inc., No. 1:11
DP 21813, 2012 WL 13054734, at *2 (N.D. Ohio May 30, 2012). Fraudulent joinder occurs when
the non-removing party joins a party against whom there is no colorable cause of action.” Saginaw
Hous. Comm'n v. Bannum, Inc., 576 F.3d 620, 624 (6th Cir. 2009) (quoting Jerome–Duncan, Inc.
v. Auto–By–Tel, L.L.C., 176 F.3d 904, 907 (6th Cir.1999)). To prove fraudulent joinder, “the
removing party must present sufficient evidence that a plaintiff could not have established a cause
of action against non-diverse defendants under state law.” Coyne v. Am. Tobacco Co., 183 F.3d

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488, 493 (6th Cir.1999). “However, if there is a colorable basis for predicting that a plaintiff may
recover against non-diverse defendants, this Court must remand the action to state court.” Id.
Pink Energy argues Plaintiff fails to plead a colorable claim against Grysiuk and Hynes..
(ECF No. 24 at 4 –6). Pink Energy maintains that this is demonstrated by Plaintiff’s failure to
allege wrongful acts by Grysiuk or Hynes separate and distinct from the Pink Energy Group’s acts
and fails to seek relief directly from them. (ECF No. 24 at 6). Various of these wrongdoings were
allegedly committed by the Pink Energy Group, which is defined as “Defendant Pink Energy
and/or Defendant Trivest, and/or Defendant Waller, and/or Defendant Grysiuk, and/or Defendant
[Hynes].” (ECF No. 12 ¶ 10). Indeed, Plaintiff groups the non-diverse defendants with other
defendants, as the Pink Energy Group and the added “and/or” nature of the definition of Pink
Energy Group dilutes the relevance of those claims. As Pink Energy explained in their opposition,
“[w]here identical wrongful acts were collectively alleged against individual and corporate
defendants, they were deemed inadequate to state a claim against the individual [] leading to a
denial of a request for remand.” Johnson, 2012 WL 13054734, at *4 (citing Novelli, 2012 WL
949675 *4 -*5 (S.D. Tex. March 19, 2012)).
In Johnson, the plaintiffs characterized the non-diverse defendant as engaged in commerce
for a product at issue that was implanted into plaintiff by a physician. 2012 WL 13054734, at *3.
The non-diverse defendant was described as being involved with advertising, promoting, labeling,
selling, distributing, marketing “and/or” supplying the product to the plaintiff’s treating physician.
Id. The plaintiff then alleged actions of the non-diverse defendants in conjunction with the diverse
defendants, including selling the defective product, failing to warn of the product, and warranting
that the product was safe. Id. at *4. The court noted that the complaint was twenty-one pages with
ninety-one numbered paragraphs but the non-diverse defendant was only mentioned four times.

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Id. at *4. The court found the allegations against the non-diverse defendant failed to distinguish
between the diverse and non-diverse defendants’ conduct and the plaintiff, thus, failed to establish
a colorable basis for liability. Id. at *5.
While generic references are insufficient, this Court finds Plaintiff has used more than
generic references to and offered more than labels and conclusions. See Johnson, 2012 WL
13054734. (finding “[p]laintiffs have failed to establish a colorable basis for liability” when “no
more than labels and conclusions” were provided in the complaint). Unlike in Johnson, the nondiverse defendants here are mentioned several times that suggests more than labels and
conclusions. Their acts are mentioned alongside the acts of Pink Energy Group, but the non-diverse
defendants are specifically referenced within some of those allegations and offered more than mere
conclusions. For example, some paragraphs only reference conduct of the Pink Energy Group.
Other paragraphs reference “the Pink Energy Group, including specifically,” Grysiuk and Hynes.
(ECF No. 12 ¶¶ 25, 41, 49, 50, 51, 52, 53, 56, 161, 203). Other paragraphs mention conduct of
Grysiuk and Hynes without mention to the Pink Energy Group’s conduct. (ECF No 12 ¶¶ 29, 30,
57, 107, 119).
Plaintiff has established the basis for a colorable cause of action with respect to the nondiverse defendants. (ECF No. 13 at 8–9). When arguing this, Plaintiff relies on McKinney v. CVS
CaremarkCorp., S.D.Ohio No. 2:13-cv-00863, McKinney v. CVS Caremark Corp., No. 2:13-CV00863, 2014 WL 171838 (S.D. Ohio Jan. 13, 2014), report and recommendation adopted, No.
2:13-CV-863, 2014 WL 1608489 (S.D. Ohio Apr. 22, 2014). In McKinney, the plaintiff sought
accommodation for her disability from her employer. Id. at *4. The non-diverse defendant was a
human resources officer who held a telephone conference with the plaintiff and suggested the
plaintiff go on leave in response to the accommodation request. Id. The non-diverse defendant then

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asked the plaintiff whether she could meet the requirements of her job and stated that plaintiff
would have to step down if she could not meet the requirements. The court found that it could not
say with certainty that the plaintiff failed to state a colorable claim against the non-diverse
defendant. The court noted that “a supervisor or manager may be held jointly and/or severally
liable with her employer for her own discriminatory conduct” and that the non-diverse defendant
“participated in the decision-making process with respect to plaintiff's request for an
accommodation.” Id.
As in McKinney, this Court cannot say with certainty that Plaintiff failed to state a colorable
claim. The Amended Complaint essentially alleges that Grysiuk and Hynes learned (ECF No. 12
¶ 29), used (Id. ¶¶ 30, 50, 52), taught/trained (Id. ¶¶ 41, 49, 53 107, 119, 161), and directed use
of (Id. ¶¶ 25, 53, 56, 57) the alleged hard-sell tactics that give rise to Plaintiff’s complaint. Plaintiff
also alleges that Grysiuk and Hynes were “intimately involved in facilitating and directing sales
agents, including the sales agent that had contact with Plaintiff, to push and use the misleading,
fraudulent, and deceptive sales tactics.” (Id. ¶ 57). Also, the sales person’s contact with Plaintiff
was allegedly at the directive of Grysiuk and Hynes. (Id.). As Pink Energy argued in its opposition,
this is a mere conclusion. Even so, Plaintiff leads to the conclusion by alleging how Grysiuk and
Hynes learned of the hard-sell tactics (Id. ¶ 29), and the techniques used “such as providing cash
incentives and erroneous promises and threats regarding the Federal Tax Credit in an attempt to
create an urgency to purchase in Plaintiff, stating that such incentives may not be available if
Plaintiff did not sign that day.” (Id. ¶ 50).
The colorable basis for a claim is further demonstrated as Plaintiff alleges Grysiuk and
Hynes “pushed misleading and false information that their solar panel systems would completely
or largely offset as customers energy usage need and completely or largely eliminate a customer’s

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monthly electric bill.” (Id. ¶ 52). The Amended Complaint also details that Grysiuk and Hynes
“trained and directed their sales agents to use deceptive sales tactics to sell loan products.” Plaintiff
then details the sales tactics as not disclosing large financing fee and hiding the fees in total costs.
(Id. ¶ 53).

Grysiuk and Hynes also allegedly directed agents to mislead customers about total

costs by speaking about low monthly payments but failing to disclose the requirement of making
a large cash payment about a year from the sale of the solar panel system. (Id. ¶ 56). Only after
alleging these activities does Plaintiff conclude that Grysiuk and Hynes were “intimately involved”
in directing using the hard-sell tactics and it was at their directive that the sales person used these
tactics when contacting Plaintiff. (Id. ¶ 57).
The ultimate question in deciding whether a party is fraudulently joined is “whether there
exists a ‘colorable basis for predicting that plaintiff may recover against non-diverse defendants.’”
Johnson v. DePuy Orthopaedics, Inc., No. 1:11 DP 21813, 2012 WL 13054734, at *2 (N.D. Ohio
May 30, 2012) (quoting Coyne, 183 F.3d at 493). This Court finds Plaintiff has met this standard
through each of the specific references to Grysiuk and Hynes’s conduct. The non-diverse
defendants have not been fraudulently joined. This Court therefore does not have diversity
jurisdiction.
d. State Forum of Appropriate Jurisdiction Requirement
As to the fifth requirement, this Court can deduce that it is met. The action be commenced
in state forum of appropriate jurisdiction and a state court is one of “appropriate jurisdiction,” if it
has subject-matter jurisdiction. In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig., 323 F. Supp.
2d at 880. The complaint was originally filed is the Hamilton County Court of Common Pleas.
(ECF No. 12 ¶ 1). In the Amended Complaint, plaintiff asserts that jurisdiction and venue is proper
in that court. (Id. ¶ 12). The Hamilton County Court of Common Pleas indisputably has subject

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matter jurisdiction over these state law claims. In re Nat'l Century Fin. Enterprises, Inc., Inv. Litig.,
323 F. Supp. 2d 861, 880 (S.D. Ohio 2004)
e. Timely Adjudication Requirement
The sixth requirement, however, remains at issue. No evidence on whether this case can be
timely adjudicated in state court was provided. This is especially detrimental to any request for
mandatory abstention because the party seeking mandatory abstention bears the burden of
demonstrating that each requirement is satisfied. In re Nat'l Century Fin. Enterprises, Inc., Inv.
Litig., 323 F. Supp. 2d at 881. The only argument Plaintiff provided to address any impact on
adjudication is that “Trivest has failed to raise any reason in the case pending in Ohio state court
that its interest would be affected by not litigating in Federal Court.” Plaintiff also argue that it has
“a right to a trial by jury” and assert that if this case is removed to the North Carolina Bankruptcy
Court, Plaintiff would lose its jury trial rights and incur travel and counsel expenses. (ECF No. 13
at 13). This is irrelevant as this case would not be before the North Carolina Bankruptcy Court.
The evidence on the record provides no indication that this case can be timely adjudicated in state
court.
Based on the information presented to this Court, there is insufficient evidence on whether
this case can be timely adjudicated in state court. It is also unlikely that a timely motion for
mandatory abstention has even been made for this Court to consider. As a result, the requirements
for mandatory abstention are not met. Mandatory abstention is improper here.
IV.

CONCLUSION

For the reasons set forth above, Plaintiff’s Motion to Remand (ECF No. 13) is DENIED.
The Defendants’ motions to dismiss the First Amended Complaint (ECF Nos. 17, 18, 19) are
DENIED as moot. This Court granted a motion to stay briefing on motions to dismiss Plaintiff’s
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complaint pending the resolution for the Motion to Remand. (ECF No. 31). Thus, the stay is
LIFTED. To allow Defendants a chance to make any desired updates, the current motions to
dismiss are DENIED as moot (ECF Nos. 36, 37). Defendants may refile or file a new/updated
motion by no later than March 14, 2025. Plaintiff’s response brief to any Motion to Dismiss is
due by March 24, 2025, and Defendants’ reply is due by March 31, 2025.
IT IS SO ORDERED.

ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATE: March 5, 2025

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