Guffy v. Brown et al

Filing 15

MEMORANDUM AND ORDER the Motions to Withdraw the Reference [Docs. # 2, # 3, # 4, and # 5] are GRANTED and the reference of this case to the United States Bankruptcy Court is WITHDRAWN. It is furtherORDERED that by February 10, 2016, Motions to Dismi ss currently pending in the Bankruptcy Court shall be refiled in this case using the District Court caption and case number. By February 17, 2016, the Plan Agent shall refile her Responses using the District Court caption and case number. Any repli es must be filed by February 24, 2016. It is furtherORDERED that counsel shall appear before the Court on March 8, 2016, at 1:30 p.m. for a status and scheduling conference.( Dispositive Motion Filing due by 2/10/2016., Responses due by 2/17/2016., Replies due by 2/24/2016, Scheduling Conference set for 3/8/2016 at 01:30 PM in Courtroom 9F before Judge Nancy F. Atlas)(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
In re:
BROWN MEDICAL CENTER, INC.,
Debtor.

§
§
§
§
-------------------------------------------------§
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ELIZABETH M. GUFFY, Plan Agent, §
Plaintiff,
§
§
v.
§
§
MARSHALL DAVIS BROWN, JR.,
§
et al.,
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Defendants.
§

February 03, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. 16-0084

Bankruptcy Adversary No. 15-3229

MEMORANDUM AND ORDER
Elizabeth Guffy, the Plan Agent for under the confirmed Chapter 11 Plan of
Liquidation in the Brown Medical Center, Inc. bankruptcy, filed this adversary
proceeding seeking to avoid certain attorney fee payments as fraudulent transfers.
This matter is before the Court on the Motions to Withdraw the Reference filed by
Adversary Defendants Robert S. Hoffman, Law Office of Robert S. Hoffman, PLLC,
Jedediah D. Moffett, and Jedediah D. Moffett PLLC (“Hoffman Defendants”) [Doc.
# 2], Marshall Davis Brown, Jr., Pavlas Borwn & York LLP, and Pavlas & Brown
LLP (“MD Brown Defendants”) [Doc. # 3], Joseph Indelicato, Jr. and the Law Offices
of Joseph Indelicato, Jr., P.C. (“Indelicato Defendants”) [Doc. # 4], and Claudia
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Canales and Claudia Canales, P.C. (“Canales Defendants”) [Doc. # 5]. All parties in
the Adversary Proceeding agree that the reference must be withdrawn for trial, but the
Bankruptcy Plan Agent, Elizabeth M. Guffy, argues that the case should be handled
in the Bankruptcy Court for all pretrial matters.
United States Bankruptcy Judge Jeff Bohm issued a Report and
Recommendation [Doc. # 1]. Judge Bohm recommends that the Court grant the
Motions to Withdraw the Reference, then refer the adversary case back to him for all
pretrial matters. Timely objections to the recommendation that the adversary be
referred to Judge Bohm for pretrial matters were filed by the Hoffman Defendants
[Doc. # 11], the MD Brown Defendants [Doc. # 12], the Indelicato Defendants [Doc.
# 13], and the Canales Defendants [Doc. # 14]. No party objects to the withdrawal of
the reference.
By General Order 2012-6, all eligible cases and proceedings in the United
States District Court for the Southern District of Texas are automatically referred to
the bankruptcy courts pursuant to 28 U.S.C. § 157(a). “The district court may
withdraw, in whole or in part, any case or proceeding referred under [§ 157], on its
own motion or on timely motion of any party, for cause shown.” 28 U.S.C. § 157(d).
When determining whether cause exists to withdraw the reference from a
bankruptcy court, the “district court should consider the goals of promoting

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uniformity in bankruptcy administration, reducing forum shopping and confusion,
fostering the economical use of the debtors’ and creditors’ resources, and expediting
the bankruptcy process.” Holland Am. Ins. Co. v. Roy, 777 F.2d 992, 999 (5th Cir.
1985). Other factors include whether the underlying lawsuit is core or non-core, and
whether a party has demanded a jury. See id.
In this case, the six Holland America factors weigh in favor of withdrawal of
the reference. It is uncontested that the adversary includes both core claims and noncore claims. There is no allegation that Defendants are engaging in forum shopping,
and Defendants have demanded a trial by jury. The Court finds that the remaining
three factors, which relate primarily to judicial economy, equally favor withdrawal of
the reference. This district court is capable of ensuring that uniformity in bankruptcy
administration and economical use of the parties’ resources is achieved. This district
court will preside over a related adversary proceeding, Civil Action No. H-16-0043,
and can quickly become familiar with the factual and legal issues that are involved in
these adversary proceedings. This district court can rule promptly on pending
motions, and can thereby avoid the duplicative work that would occur if the motions
are decided by the bankruptcy court followed by an appeal to this court. This district
court utilizes a procedure that allows quick resolution of discovery disputes, which
will be discussed with the parties at the initial scheduling conference. The Court will

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handle this adversary proceeding in a manner which promotes uniformity in
bankruptcy administration, economical use of the parties’ resources, and an efficient
bankruptcy process.
Having reviewed the Motions to Withdraw the Reference, the Bankruptcy
Court’s Report and Recommendation, Defendants’ Objections, and applicable legal
authorities, the Court concludes that there is good cause to withdraw the reference of
this adversary proceeding.
The District Court has discretion to refer cases to the Bankruptcy Court. See
Matter of Hipp, Inc., 895 F.2d 1503, 1514 (5th Cir. 1990). The Court exercises its
discretion to retain the case on its active docket rather than refer it to the Bankruptcy
Court for pretrial matters. This will allow the Court to maintain an active role in the
case and to gain familiarity with the issues that will be presented for trial.
Additionally, this will allow the Court to ensure the efficient use of the resources of
the parties and the Court. Accordingly, it is hereby
ORDERED that the Motions to Withdraw the Reference [Docs. # 2, # 3, # 4,
and # 5] are GRANTED and the reference of this case to the United States
Bankruptcy Court is WITHDRAWN. It is further
ORDERED that by February 10, 2016, Motions to Dismiss currently pending
in the Bankruptcy Court shall be refiled in this case using the District Court caption

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and case number. By February 17, 2016, the Plan Agent shall refile her Responses
using the District Court caption and case number. Any replies must be filed by
February 24, 2016. It is further
ORDERED that counsel shall appear before the Court on March 8, 2016, at
1:30 p.m. for a status and scheduling conference.
SIGNED at Houston, Texas, this 3rd of February, 2016.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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