In re: Sue Ellen Walters

Filing 26

MEMORANDUM OPINION AND ORDER: that the decision of the Bankruptcy Court granting Appellee's Motion to Remand this action to the Circuit Court of Raleigh County, West Virginia pursuant to 28 USC 1452(b) be Affirmed. Signed by Judge Irene C. Berger on 10/2/2013. (cc: attys; any unrepresented party) (cds)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BECKLEY DIVISION

IN RE:

SUE ELLEN WALTERS,
Debtor.

QUICKEN LOANS, INC., et al.,
Appellants,
v.

CIVIL ACTION NO. 5:12-cv-01174

SUE ELLEN WALTERS,
Appellee;

QUICKEN LOANS INC.,
Cross Claimant,
v.
KIRK RIFFE,
Cross Defendant.

MEMORANDUM OPINION AND ORDER
This is an appeal from a decision of the United States Bankruptcy Court for the Southern
District of West Virginia granting Plaintiff, Sue Ellen Walters’ Motion to Remand. The Court
disposes with oral argument because the facts and legal arguments are adequately presented in the
briefs and in the record, and the decisional process would not be significantly aided by oral
argument. See Fed.R.Bankr.P. 8012.
Bankruptcy Court is affirmed.

For the reasons stated herein, the decision of the

PROCEDURAL HISTORY
On September 24, 2009, Plaintiff/Appellee, Sue Ellen Walters (“Ms. Walters”), filed a
voluntary Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Southern
District of West Virginia. In re: Sue Ellen Walters, Civil Action No. 5:09-bk-50313. On February
2, 2010, the Bankruptcy Court entered an order granting Ms. Walters a discharge under 11 U.S.C.
§ 727. (Id.) On March 9, 2010, the Court entered a “Final Decree Closing Case” finding that Ms.
Walters’ estate has been fully administered and ordering that her Chapter 7 case be closed. (Id.)
On July 19, 2011, July 22, 2011, and September 1, 2011, Ms. Walters filed “Motion[s] to
Reopen Case to Amend the Value of Scheduled Real Property, to Amend Exemptions and to
Include Predatory Lending Lawsuit as an Asset.” (Id. at Documents 18, 19, and 26.) In support,
Ms. Walters stated that she discovered that the value of her real estate at the time of the filing of her
Chapter 7 bankruptcy was “incorrectly overstated” at $136,000 and that she had retained counsel
“to file a predatory lending case against Quicken Loans, Countrywide Mortgage and Bank of
America.” (Id.) She contends that the claim existed when she filed for bankruptcy and “could
produce assets for the estate.” (Id.) On September 7, 2011, the Bankruptcy Court granted her
motion to reopen and permitted her to file amended schedules. (Id. at Document 27.)
On September 20, 2011, Ms. Walters filed amended schedules (Amended Schedule BPersonal Property and Amended Schedule C- Property Claimed as Exempt) which included real
property valued at $65,000 (previously valued at $136,000), a “predatory lending claim against
Bank of America” with an “unknown” value and an exemption of $22,500.00 pursuant to W.Va.
Code § 38-10-4(e). (Id. at Document 29.)

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On October 24, 2011, Ms. Walters filed an adversary proceeding in Bankruptcy Court
against Quicken Loans and BAC Homes Loans Servicing, LP n/k/a Bank of America, N.A. (“Bank
of America”). Walters v. Quicken Loans Inc., et al., Civil Action No. 5:11-ap-5025; (Id. at
Document 30.) In her Complaint, Ms. Walters alleges that in 2007, Quicken Loans offered her a
home mortgage loan based upon an inflated appraisal which it arranged for and relied upon. (Id.)
Based upon the foregoing, Ms. Walters asserted claims of (I) unconscionable inducement; (II)
illegal loan; (III) fraud; and (IV) illegal debt collection – misrepresentation. (Id.) She also
requested various forms of relief, including actual and punitive damages and attorney’s fees, and
she sought declaratory judgment that the practices engaged in by Quicken Loans are
unconscionable and illegal and that the loan is unconscionable. (Id.)
On November 29, 2011, Robert L. Johns, Chapter 7 Trustee of Ms. Walters’ bankruptcy
estate, filed an Objection to her Claim of Exempt Property. (Id. at Document 31.) The Trustee
stated that he believes the action would exceed Ms. Walters’ available exemptions, and thus,
objected to her valuation of the property and any claim that the action is fully exempted. (Id.) He
further objected to any claim above the exemption provided by W.Va. Code § 38-10-4. (Id.) The
objection was subsequently resolved when the Trustee and Ms. Walters reached an agreement that
any monetary damages from the lawsuit in excess of the amount of her exemptions, $22,500,
would become property of the bankruptcy estate. (Id. at Document 37.)1

1 “[T]he parties agreed to stipulate as follows: (a) Debtor is obligated to inform the Trustee of the status of the Action
at reasonable intervals; (b) if the disposition of the Action results in monetary award greater than the Debtor’s
available exemptions of twenty-two thousand five hundred dollars ($22,500.00), the remaining award will be the
property of the bankruptcy estate; and (c) if the claims are within the Debtor’s available exemptions, the Trustee will
withdraw his objection.” (Id.)

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On December 13, 2011, Ms. Walters voluntarily dismissed the adversary proceeding
against Quicken Loans and Bank of America that was pending in the Bankruptcy Court. The case
was then closed on December 28, 2011.
On December 21, 2011, Ms. Walters filed a Complaint in the Circuit Court of Raleigh
County, West Virginia, against Quicken Loans, Bank of America, and Kirk Riffe, the appraiser
who valued Ms. Walters’ home at an allegedly inflated price in connection with the 2007 loan.
Walters v. Quicken Loans Inc, et al., Civil Action No. 11-C-1123-K. Ms. Walters alleges six
counts: (I) unconscionable inducement against Quicken Loans; (II) illegal loan in violation of
West Virginia Code § 31-17-8(m)(8) against Quicken Loans; (III) fraud against Quicken Loans;
and (IV) negligence against Kirk Riffe; (V) acceptance of fee contingent on predetermined
conclusion in violation of West Virginia Code § 30-38-12(8) against Kirk Riffe; and (VI) illegal
debt collection – misrepresentation in violation of West Virginia Code §46A-2-127(d) against
Bank of America. (“Compl.”) (Document 1-1.)

Ms. Walters’ requested relief includes:

declaratory judgment that the loan is unconscionable and unenforceable, actual damages,
reasonable attorney’s fees and other such relief that the Court may deem equitable and just. (Id.)
On January 27, 2012, Appellant/Defendant, Quicken Loans, Inc. (“Quicken Loans”),
removed Ms. Walters’ case from the Circuit Court of Raleigh County, West Virginia, to the United
States Bankruptcy Court for the Southern District of West Virginia pursuant to 28 U.S.C. §§ 157,
1334, 1446, and 1452, as well as Federal Rule of Bankruptcy Procedure 9027, Southern District of
West Virginia Local Rule of Civil Procedure 83.13, and Local Rule 9027-1. (“Notice of
Removal”) (Document 4-2.)2 In support, Quicken Loans asserts that this civil action arises in and

2 28 U.S.C. § 1452(a) provides in pertinent part: “A party may remove any claim or cause of action in a civil action
. . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such

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is related to Ms. Walters’ bankruptcy case and is a core bankruptcy proceeding. (Id. at 1.) Quicken
Loans contends that Ms. Walters’ state court action “arises in” her Bankruptcy Case and is a core
bankruptcy proceeding because it seeks to have the Court invalidate her home mortgage loan
“which was listed [as] a secure claim held by Bank of America in Plaintiff’s bankruptcy
schedules.” (Id. at 5-7.) Quicken Loan also asserts that Ms. Walters’ state court action is “related
to” her bankruptcy case because she seeks to recover monetary damages which may increase the
assets available to the Trustee of her bankruptcy estate. (Id. at 7.)
On February 3, 2012, Ms. Walters filed a Motion to Remand the case to the Circuit Court
of Raleigh County pursuant to 28 U.S.C. §1452(b).3 (Document 4-3.) In support, Ms. Walters
asserts that the outcome of her Chapter 7 bankruptcy is not dependent on the outcome of the state
court action concerning her home loan. (Id. at 2-3.) She explains that she has already filed
amendments to her bankruptcy schedules and has agreed that any damages she receives as a result
of her predatory lending claim, in excess of her exemption, will be part of her bankruptcy estate.
(Id. at 3.) Ms. Walters also states that “[she] desires to proceed in her claims in state court and
exercise her right to a jury in that court.” (Id.) Ms. Walters notes that pursuant to 28 U.S.C.
§1452(b), the Court may remand this case on any equitable ground. (Id.)
On February 16, 2012, Quicken Loans filed its Response in Opposition to the Motion to
Remand. (Document 4-4.) First, Quicken Loans argues that the motion should be denied because

claim or cause of action under section 1334 of this title.”
28 U.S.C. § 1334(b) provides in pertinent part: “the district courts shall have original but not exclusive jurisdiction of
all civil proceedings arising under title 11, or arising in or related to cases under title 11.”
3 28 U.S.C. § 1452(b) states: “The court to which such claim or cause of action is removed may remand such claim or
cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action,
or a decision to not remand, is not reviewable by appeal or otherwise by the court of appeals under section 158(d),
1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title.”

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Ms. Walters has failed to satisfy her burden to establish that remand is warranted. (Id.) Quicken
Loans explains that Mr. Walters did not discuss any of the factors for equitable remand under 28
U.S.C. § 1452(b), did not cite to a single case in support of the motion nor dispute that the
adversary proceeding is a core bankruptcy proceeding. (Id. at 1.) Next, Quicken Loans addresses
the twelve factors cited in Appatek Indust. Inc. v. Biolab, Inc., 2010 U.S. Dist. LEXIS 17154, at
*6-7 (M.D.N.C. 2010) adopted by Appatek Ind. Inc., v. Biolab, Inc., Civil Case No.
1:09-cv-00645, and argues that application of those factors demonstrates that the Court should
retain jurisdiction.4 (Document 4-4 at 7-13.) Quicken Loans argues that none of the relevant
factors favor Plaintiff’s motion because: (1) this Court has jurisdiction and removal was proper;
(2) although the claims arise under West Virginia law, they were brought by the debtor and this
Court has construed West Virginia law on numerous occasions; (3) there are no economical or
efficiency interests which warrant remand because the adversary proceeding has not progressed
beyond the pleading stage; (4) “the outcome of Plaintiff’s bankruptcy proceeding essentially is
entirely dependent on the outcome of the adversary proceeding;” (5) the adversary proceeding is
related to the bankruptcy case; (6) this court regularly hears and resolves claims similar to
Plaintiff’s; (7) Quicken Loans removed the adversary proceeding early in the litigation; (8)
Plaintiff will not be unfairly prejudiced by proceeding in this Court; (9) this forum is not
inconvenient because this Court and the applicable state court are located in the same city; (10)
although there may not be a possibility of inconsistent results, Plaintiff’s bankruptcy proceeding
4 The factors include: (1) the court’s duty to resolve matters properly before it; (2) the predominance of state law
issues and non-debtor parties; (3) the economical use of judicial resources; (4) the effect of remand on the
administration of the bankruptcy estate; (5) the relatedness or remoteness of the action to the bankruptcy case; (6)
whether the case involves questions of state law better addressed by the state court; (7) comity considerations; (8) any
prejudice to the involuntarily removed parties; (9) forum non conveniences; (10) the possibility of inconsistent results;
(11) any expertise of the court where the action originated; and (12) the existence of a right to jury trial. (Document 4-4
at 7) (citing Appatek Indust. Inc., 2010 U.S. Dist. LEXIS 17154, at *6-7; Wolfe v. Greentree Mortg. Corp., No.
3:09-cv-74, 2010 U.S. Dist. LEXIS 6005, at *9 (N.D.W.Va. 2010) (identifying seven similar factors).

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and adversary proceeding are “very much related;” (11) the state court has no particular or unique
relevant expertise in resolving these claims; and (12) the adversary proceeding could be referred to
the District Court for a jury trial. (Id.) Based on the foregoing, Quicken Loans argues that
Plaintiff’s motion to remand should be denied.
On March 12, 2012, Ms. Walters filed her Reply in support of her Motion to Remand
(Document 4-6). She argues that upon applying the seven factors from Barge v. W.S. Life Ins. Co.,
307 B.R. 541, 548 (S.D.W.Va. 2004) (J. Copenhaver), it is clear that this proceeding should be
remanded.5 First, she argues that because of the stipulation entered into with the trustee, which
provides that any proceeds from this adversary proceeding in excess of her exemptions will be the
property of the bankruptcy estate, this Court need not preside over the litigation to ensure the
efficient administration of the bankruptcy estate. (Document 4-6 at 2.) Second, she contends that
because the claims in the Complaint all arise under state law, they are best suited for state court.
(Id.) Third, she asserts that while both this Court and the state court are qualified to deal with the
legal issues involved, Judge Kirkpatrick has handled many similar cases. (Id.) Fourth, she states
that in the interest of comity, this court should remand this case back to state court. (Id.) Fifth, Ms.
Walters contends that her claims are only remotely related to the bankruptcy case, “which for all
intents and purposes is closed,” and require separate resolution from the issues that arose under the
bankruptcy. (Id.) Sixth, she states that her right to a jury trial is unavailable in the bankruptcy
court. (Id. at 3.) Seventh, she argues that she would be prejudiced by the removal of this case
because she is the master of her complaint and desires to have her case tried in state court. (Id.)

5 Those factors include: (1) the effect on the efficient administration of the bankruptcy estate; (2) the extent to which
issues of state law predominate; (3) the difficulty or unsettled nature of the applicable state law; (4) comity; (5) the
degree of relatedness or remoteness of the proceeding to the main bankruptcy case; (6) the existence of a right to jury
trial; and (7) prejudice to the party involuntarily removed from state court.

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Finally, she contends that because this case cannot be removed based on diversity jurisdiction,
Quicken Loans is attempting “to use this [Bankruptcy] Court as a back door approach to obtaining
removal to the District Court.” (Id.) 6 Based on the foregoing, Plaintiff moves the Court to
equitably remand the case back to state court.
On March 15, 2012, Judge Pearson of the Bankruptcy Court held a hearing to consider Ms.
Walters’ Motion to Remand and Quicken Loans’ Response in Opposition. (See Document 4-5.)
Upon consideration of the parties’ written submissions and oral arguments, and after application of
the relevant factors for equitable remand under 28 U.S.C. § 1452(b), he determined that Plaintiff’s
motion to remand should be granted. (Document 21-1.) By Order entered on April 2, 2012, he
granted Ms. Walters’ Motion to Remand. (Document 4-8.)
On April 16, 2012, Quicken Loans filed a Notice of Appeal of Order Granting Plaintiff’s
Motion to Remand pursuant to 28 U.S.C. § 158(a) and Rule 8001(a) of the Federal Rules of
Bankruptcy Procedure. (Document 1.) On April 20, 2012, Appellant Quicken Loans, pursuant to
Rule 8006 of the Federal Rule of Bankruptcy Procedure, submitted its designation of items to be
included in the record on appeal and identified the following issue for review: “[d]id the
Bankruptcy Court err in equitably remanding this adversary proceeding to state court under 28
U.S.C. § 1452(b)?”7 (Document 4-9.)8
On October 12, 2012, Quicken Loans filed its brief (Document 6) wherein it argues that the
Bankruptcy Court abused its discretion in granting Plaintiff’s Motion to Remand. Quicken Loans
6 The Court notes that in Ms. Walters’ Complaint she alleges that both she and Defendant Mr. Riffe are citizens of
West Virginia. (Document 4-2 at 15-16.)
7 The Court notes that the Record on Appeal was not filed in this Court until September 28, 2012. (Document 4.)
8 Quicken Loans designated the following items to be included in the record: (1) Quicken Loans’ Notice of Removal;
(2) Plaintiff’s Motion to Remand; (3) Quicken Loans’ Opposition to Plaintiff’s Motion to Remand; (4) Notice of
Hearing Schedule for 03/15/2012 on Motion to Remand; (5) Plaintiff’s Reply in Support of Motion to Remand; (6)
Hearing Held on 03/15/2012 on Motion to Remand- Bench Notes; (7) Plaintiff’s Proposed Order on Motion to
Remand; (8) Order Granting Motion to Remand; and (9) Quicken Loans’ Notice of Appeal. (Id.)

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argues that because Plaintiff’s motion to remand did not identify any factors for equitable remand
and her reply was untimely, the Bankruptcy Court should have denied her motion. (Id. at 8-9.) In
the alternative, Quicken Loans argues that application of the relevant factors shows that the
Bankruptcy Court should have retained jurisdiction. (Id. at 9-14.) Accordingly, Quicken Loans
contends that the Bankruptcy Court’s decision to remand was an abuse of discretion, which this
Court should reverse. (Id.)
Also on October 12, 2012, Ms. Walters filed her brief (Document 7) wherein she argues
that the Bankruptcy Court properly considered the relevant factors for equitable remand and
properly determined that the factors weigh in favor of remand. (Id. at 3-7.) Ms. Walters further
argues that the mandatory abstention under 28 U.S.C. § 1334(c) applies because her claims do not
arise in or under Title 11. (Id. at 7-9.) Finally, Ms. Walters argues that the factors for permissive
abstention under 28 U.S.C. § 1334(c)(1) also weigh in favor of remand. (Id. at 9-10.) Therefore,
Ms. Walters argues that the Bankruptcy Court did not abuse its discretion in choosing to remand
this action to the Circuit Court of Raleigh County, West Virginia. (Id.)
On August 5, 2013, this Court ordered that Quicken Loan explain its reasons for failing to
designate and include a transcript of the Bankruptcy Court’s March 15, 2012 hearing, on Ms.
Walter’s motion to remand, in the Record on Appeal. (Document 18.) On August 16, 2013,
Quicken Loans filed a response to the Court’s Order and moved for leave to designate the remand
hearing transcript as part of the Record on Appeal. (Document 21.) On August 19, 2013, this Court
ordered that Quicken Loans’ motion be granted and that it be given leave to designate the
transcript as part of the record on appeal. (Document 22.)

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STANDARD OF REVIEW
“On an appeal the district court . . . may affirm, modify, or reverse a bankruptcy judge's
judgment, order, or decree or remand with instructions for further proceedings. . .” Fed.R.Bankr.P.
8013. “In considering such appeals from bankruptcy court decisions, the district courts are thus
required to review the bankruptcy court's findings of fact for clear error, its legal conclusions de
novo, and its exercise of discretion for abuse thereof.” George Junior Republic in Pennsylvania v.
Williams, 2008 WL 763304, at *2 (E.D.Pa. Mar. 19, 2008) (citing IRS v. Pransky, 318 F.3d 536,
542 (3d Cir.2003); Professional Insurance Management v. Ohio Casualty Group of Insurance
Companies, 285 F.3d 268, 282-283 (3d Cir.2002); In re Krystal Cadillac Oldsmobile GMC Truck,
Inc., 142 F.3d 631, 635 (3d Cir.1998)); see also In re Modanlo, 266 F.App'x 272, 274 (4th
Cir.2008) (per curium) (unpublished decision) (“In a bankruptcy appeal, we review the bankruptcy
court’s decision directly, applying the same standard of review as did the district court . . . Under
this standard, we review legal conclusions de novo and factual findings for clear error.” (citations
omitted)). On appeal, the district court may only consider the evidence which was presented to the
bankruptcy court and made part of the record. See In re Computer Dynamics, Inc. 253 B.R. 693,
697 (E.D.Va. Oct. 13, 2000) (citing Com. Of Va., State Educ. Assistance Authority v. Dillon, 189
B.R. 382, 384 (W.D.Va. Mar. 9, 1995)).
A bankruptcy judge's decision to remand under 28 U.S.C. § 1452(b) is reviewed for abuse
of discretion. See McCarthy v. Prince, 230 B.R. 414 (B.A.P. 9th Cir.1999); see also, In re Morris,
385 B.R. 823, 828 (E.D.Va. Mar 28, 2008) (“decisions committed to the discretion of the
bankruptcy court are reviewed for abuse of discretion.”). “An abuse of discretion occurs when the
court bases its opinion on a clearly erroneous finding of fact, and erroneous legal conclusion, or an

10

improper application of law to fact.” In re Olick, 466 B.R. 680, 688 (E.D.Pa. Nov. 30, 2011)
(quoting LaSalle Nat'l Bank v. First Conn. Holding Grp., L.L.C. XXIII, 287 F.3d 279, 288 (3d
Cir.2002)). “At its immovable core, the abuse of discretion standard requires a reviewing court to
show enough deference to a primary decision-maker's judgment that the court does not reverse
merely because it would have come to a different result in the first instance.” Evans v. Easton
Corp. Long Term Disability Plan, 514 F.3d 315, 322 (4th Cir.2008). In other words, “[t]he
‘deference that is the hallmark of abuse-of-discretion review,’ Gen. Elec. Co. v. Joiner, 522 U.S.
136, 143 (1997), is deference enough to appreciate reasonable disagreement.” (Id.)

APPLICABLE LAW
A bankruptcy court to which a civil claim or cause of action is removed pursuant to 28
U.S.C. § 1452(a) “may remand such claim or cause of action on any equitable ground.” 28 U.S.C.
§ 1452(b). The burden of proving the grounds for equitable remand of the action rests with the
plaintiff. See Sowell v. U.S. Bank Trust Nat. Ass’n, 317 B.R. 319, 323 (E.D.N.C. Nov. 3, 2004); In
re Pettus Properties, Inc., 2012 WL 956915 (Bkrt. W.D.N.C. Mar. 20, 2012.)
In determining whether “any equitable ground” exists to warrant remand under 28 U.S.C. §
1452(b), courts consider numerous factors. See, Barge v. Western Southern Life Ins. Co., 307 B.R.
541, 548 (S.D.W.VA. Mar. 30, 2004) (J. Copenhaver) (identifying seven factors to consider in
determining whether to remand under § 1452(b)); Appatek Indust. v. BioLab, Inc., 2010 U.S. Dist.
LEXIS 17154, *6–7 (M.D.N.C. Feb. 25, 2010) (identifying twelve factors to be considered when

11

determining whether to grant equitable remand or permissive abstention) (citing Blanton v. IMN
Financial Corp., 260 B.R. 257, 265 (M.D.N.C. Jan 29, 2001).9 These factors include:
(1) the effect on the efficient administration of the bankruptcy estate; (2) the extent
to which issues of state law predominate; (3) the difficulty or unsettled nature of the
applicable state law; (4) comity; (5) the degree of relatedness or remoteness of the
proceeding to the main bankruptcy case; (6) the existence of a right to jury trial; and
(7) prejudice to the party involuntarily removed from state court.
Barge, 307 B.R. at 548; see also, Miller v. Huntington Nat. Bank, N.A., 2013 WL 3878742, at *8
(N.D.W.Va. July 26, 2013); Wolfe v. Greentree Mortg. Corp., 2010 WL 391629, at *4
(N.D.W.Va. Jan 26, 2010). However, “[t]here has not been established a definitive set of factors
that courts must consider in exercising their discretion to remand.” In re Minor Family Hotels,
LLC., 2010 WL 5141335 (W.D.Va. Dec. 10, 2010).
“Although virtually identical factors are used in determining whether discretionary
abstention and equitable remand should be applied, the Court recognizes that the concept of
equitable remand is broader than abstention.” In re Mid-Atlantic Resources Corp, 283 B.R. 176,
193 (S.D.W.Va. Aug. 28, 2002) (J. Chambers) (citing Ernst & Young, LLP v. Devan ( In re Merry–
Go–Round Enterprises, Inc.), 222 B.R. 254, 256–57 (D.Md.1998) (stating, “virtually the same (if
not the identical) factors have emerged for judging the propriety of permissive abstention under §
1334(c)(1) as have been articulated for deciding the propriety of a remand under § 1452(b) . . . It
does not follow, however, that every remand decision must be justifiable under abstention law.
9 These factors include:
(1) the court's duty to resolve matters properly before it; (2) the predominance of state law issues and
non-debtor parties; (3) the economical use of judicial resources; (4) the effect of remand on the
administration of the bankruptcy estate; (5) the relatedness or remoteness of the action to the
bankruptcy case; (6) whether the case involves questions of state law better addressed by the state
court; (7) comity considerations; (8) any prejudice to the involuntarily removed parties; (9) forum
non conveniens; (10) the possibility of inconsistent results; (11) any expertise of the court where the
action originated; and (12) the existence of a right to a jury trial.

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Section 1452, itself, provides the criterion for orders of remand, and it broadly states that a claim
may be remanded ‘on any equitable ground,’ i.e., as interpreted by some courts, any ‘appropriate
ground.’ ” (citations omitted)). As noted above, a decision to remand pursuant to § 1452(b) is
committed to the sound discretion of the bankruptcy judge and is reviewed under the abuse of
discretion standard. See In re Minor Family Hotels, LLC, 2010 WL 5141335 (W.D.Va. Dec. 10,
2010) (citing McCarthy v. Prince (In re McCarthy), 230 B.R. 414, 416–17 (B.A.P 9th Cir.1999)
(describing the “any equitable ground” standard as “an unusually broad grant of authority”).

DISCUSSION
A. Plaintiff’s Burden
The Court finds that the Bankruptcy Court did not abuse its discretion by refusing to deny
Ms. Walters’ motion to remand based solely on the arguments contained in her motion, which
Quicken Loans contends did not support equitable remand. Quicken Loans argues that Ms.
Walters did not meet her burden to demonstrate that the adversary proceeding should be equitably
remanded because she did not identify any relevant factors for equitable remand in her motion and
because her reply was untimely. (Document 6 at 8-9.)10 The Bankruptcy Court quickly rejected
this argument during the motion hearing and considered all of the parties’ arguments.11 Quicken
Loans has not shown how deciding a motion on its merits, by considering arguments presented
10 The Court notes that in her Motion to Remand, Ms. Walters recognized that “[a]ccording to 28 U.S.C. § 1452(b),
this Court may remand this case based on any equitable grounds.” (Document 4-3 at 4.) In support she contended that
“[t]he outcome of the Chapter 7 bankruptcy is not dependent on the outcome of the lawsuit concerning the Plaintiff’s
home loan” because “[t]he appropriate amendments to the bankruptcy schedules have been filed, and the Plaintiff has
agreed that any damages she receives in excess of her exemptions will be surrendered to the bankruptcy estate.” (Id. at
2-3.) She also stated that “Plaintiff desires to proceed in her claims in state court and exercise her right to a jury trial in
that court.” (Id. at 3.)
11 Judge Pearson of the Bankruptcy Court responded “You think I should make a decision about whether this case is
remanded to the state here disregarding anything I learn at this hearing or any opinions I - - that counsel expresses at
this hearing? I think that’s - - I think not.” (Document 21-1 at 14-15.)

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during the motion hearing, is an abuse of discretion. As noted above, “[a]n abuse of discretion
occurs when the court bases its opinion on a clearly erroneous finding of fact, and erroneous legal
conclusion, or an improper application of law to fact.” In re Olick, 466 B.R. at 688 (quoting
LaSalle, 287 F.3d at 288.) The Court finds that the Bankruptcy Court did not abuse its discretion in
granting Ms. Walters’ motion to remand based upon the parties’ written submissions and oral
arguments made during the Bankruptcy Court’s March 15, 2012 hearing.
Moreover, Quicken Loans’ reliance on Appateck Indus. Inc. v. Biolab Inc., 2010 U.S. Dist.
LEXIS 17154 (M.D.N.C. Feb. 25, 2010), is misplaced. In that case, United States Magistrate
Judge L. Patrick Auld recommended that the court deny plaintiff’s motion for remand based on the
application of the relevant factors from Blanton v. IMN Financial, 260 B.R. 257, 265 (M.D.N.C.
Jan. 29, 2001), to the facts of the case.12 (Id at *16.) He found that the plaintiff did not meet its
burden of showing that the Court should permissively abstain or equitably remand the case to state
court because the plaintiff did not raise any argument with respect to five factors and the remaining
seven factors did not favor the plaintiff. (Id.) That case did not have anything to do with the timing
of the plaintiff’s arguments. (See, id.) Rather, the magistrate judge focused on the content of the
arguments plaintiff did make and found that none of those factors weighed in favor of equitable
remand or permissive abstention. (See, id.) Accordingly, Appateck does not support Quicken
Loans’ argument that Ms. Walter’s “failure to timely support her motion . . . is grounds for denial.”
(Document 6 at 8.) More importantly, Appateck does not support Quicken Loans’ argument that
the Bankruptcy Court abused its discretion in failing to deny Ms. Walters’ motion to remand based
on the arguments, or lack thereof, contained in the motion itself.
12 By Order entered on May 4, 2010, Chief Judge James A. Beaty Jr., of the United States District Court for the
Middle District of North Carolina, found that it need not make a de novo review because no objections were filed and
adopted the Magistrate Judge’s Recommendation. Appatek Ind. Inc., v. Biolab, Inc., Civil Case No. 1:09-cv-00645.

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B. Balancing of Equitable Factors
In his order, Judge Pearson cites the following reasons for remanding the case to Circuit
Court: “(1) Bankruptcy issues here are only minor; (2) Most of the issues in this case involve state
law questions regarding the origination and servicing of the loan which are appropriate for state
court resolution; (3) The state court will be able to expediently impanel a jury, and the bankruptcy
court would only be able to send the case to District Court if a jury trial were necessary; (4) There
is a neutral effect on the bankruptcy estate as a result of remand; (5) This action is only remotely
related to the bankruptcy because only the recovery affects the bankruptcy estate; (6) State courts
handle these types of cases regularly; (7) Bankruptcy courts exist to resolve complex consumer
and creditor issues; when a state court is ready and willing to handle state law issues, unless the
case is important to the outcome of the bankruptcy because it involves many creditors, the state
court action should be allowed in the interest of comity; (8) Either forum is convenient; (9) There
is no issue of inconsistent results if the case is heard in the state court; (10) The state court judge
has expertise on state law; and (11) The state court judge will decide whether the right to a jury
trial is allowed.” (Document 4-8.) During the motion hearing, Judge Pearson considered these and
other factors in more depth. (Document 21-1 at 13-19.)13
Quicken Loans argues that the Bankruptcy Court abused its discretion with respect to five
factors and that the remaining factors fail to support Ms. Walters’ position. (Document 6 at
9-14.) 14 In support, Quicken Loans cites to magistrate, bankruptcy, and district court
recommendations/opinions outside of this district in which the court found that the factors did not

13 The Bankruptcy Court largely applied the factors from Appatek, 2010 U.S. Dist. LEXIS 17154, *6–7.
14 Quicken Loans argues that the Bankruptcy Court abused its discretion in finding that the second, fifth, seventh, and
twelfth factors favored Appellee and that the fourth factor was neutral. (Id.)

15

weigh in favor of equitable remand/abstention. (See, id.) However, merely citing to non-binding
authority that weighed a discretionary factor differently than the Bankruptcy Court is not sufficient
to show an abuse of discretion. “The ‘deference that is the hallmark of abuse-of-discretion review,’
Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997), is deference enough to appreciate reasonable
disagreement.” Evans, 514 F.3d at 322. Rather, as previously stated, “[a]n abuse of discretion
occurs when the court bases its opinion on a clearly erroneous finding of fact, and erroneous legal
conclusion, or an improper application of law to fact.” In re Olick, 466 B.R. 680, 688 (E.D.Pa.
Nov. 30, 2011) (quoting LaSalle Nat'l Bank v. First Conn. Holding Grp., L.L.C. XXIII, 287 F.3d
279, 288 (3d Cir.2002)). Quicken Loans has not demonstrated that the Bankruptcy Court abused
its discretion.
Moreover, after carefully reviewing the factors for abuse of discretion, the Court finds that
the Bankruptcy Court did not abuse its discretion in determining that, on balance, the factors
counsel in favor of remanding the case to the Circuit Court of Raleigh County. “The law entrusts to
[the Bankruptcy Court] the task of weighing pertinent factors and reaching a reasoned judgment on
the remand issue.” In re Merry–Go–Round Enters., 222 B.R. at 256.
First, the case involves only state law claims (e.g., unconscionable inducement; illegal loan
in violation of West Virginia Code § 31-17-8(m)(8); fraud; negligence; acceptance of fee
contingent on predetermined conclusion in violation of West Virginia Code § 30-38-12(8); and
illegal debt collection/misrepresentation in violation of West Virginia Code §46A-2-127(d)).
(Document 4-2 at 15-22.) During the hearing, Judge Pearson found that state law issues
predominate over bankruptcy law because “most of the legal issues that are going to be involved
are issues of state law with respect to the origination and management of the mortgage” and “[t]he

16

bankruptcy law issues [i.e., what the debtor is entitled to exempt with respect to this claim if the
lawsuit is worth more than her exemptible interest] have been resolved already by the agreement
between debtor’s counsel and the trustee as to what interest the debtor has.” (Document 21-1 at
14-15.) Because state law issues predominate over bankruptcy issues, the Bankruptcy Court did
not abuse its discretion in finding that this factor weighs in favor of equitable remand. See Cline v.
Quicken Loans, Inc., 2011 WL 2633085 (N.D.W.Va. July 5, 2011) (finding that this factor
weighed in favor or remand because “the state law proceeding is based solely on issues of state law
[e.g., unconscionability, breach of fiduciary duty, fraud/intentional misrepresentation, illegal loans
in excess of fair market value . . .] that would be better addressed by a state court.”); In re Gober,
100 F.3d 1195, 1207 (5th Cir.1996) (“We find no abuse of discretion [in the district court's
decision to remand a case removed in bankruptcy jurisdiction] because we agree that Gober's
claims hinge solely on questions of state law and invoke no substantive right created by federal
bankruptcy law. Gober's claims exist wholly outside of bankruptcy[.]”).
Second, the Bankruptcy Court considered whether the state action is remote to the
bankruptcy proceeding. Ms. Walters’ claims all arise under state law. Only her potential
recovery may affect her bankruptcy estate. In other words, the action will only implicate her
bankruptcy estate if she is successful in voiding the home mortgage loan and/or her recovery is
above her exemption. During the hearing, Judge Pearson explained that “this is not a traditional
lien avoidance compact case” because “whether or not the lien gets voided or the lender gets set
aside depends on whether or not plaintiff can prove their case, unconscionability or fraud.”
(Document 21-1 at 18-19.) Therefore, on one hand, resolution of Ms. Walters’ claims could have
an impact on her bankruptcy estate if she recovers more than her exemption or the lien at issue is

17

found unenforceable. On the other hand, Ms. Walters’ Complaint alleges state law claims which
are remote from the issue of the bankruptcy itself. Resolution of her claims will require no
consideration of bankruptcy law. Although other courts have reached different conclusions under
somewhat similar circumstances,15 this Court finds that the Bankruptcy Court did not abuse its
discretion in finding that this factor weighed in favor of remand.
Third, the state court is better suited to address Ms. Walters’ claims because those claims
are based exclusively on state law. See Snyder v. Swanson, 2005 WL 6158872 (D.Md. Feb. 15,
2005) (“the Circuit Court case involves purely state law claims (e.g. breach of contract, abuse of
process, and tortious interference). The state court is better suited to address these claims.”).
Moreover, Ms. Walters’ claims may present unsettled state law issues. Miller, 2013 WL 387842, at
*9 (finding that the questions of “whether West Virginia law confers a private right of action under
the claims [acceptance of fee contingent on predetermined conclusion and negligence on the part
of an appraiser] . . . and whether under West Virginia law, a homeowner stands in the requisite
privity with an appraiser for purposes of bringing suit” are “unsettled.”) Judge Pearson stressed
that “Bankruptcy courts exist to resolve complex consumer and credit issues; [and thus] when a
state court is ready and willing to handle state law issues, unless the case is important to the
outcome of the bankruptcy because it involves many creditors, the state court action should be
allowed in the interest of comity.” (Document 4-8 at 2.)
Fourth, Ms. Walters demanded a jury trial which weighs in favor of remand. See e.g.,
Loudin v. J.P. Morgan Trust Co., 481 B.R. 388, 396 (S.D.W.Va. Sept. 5, 2012) (C.J. Goodwin)

15 See e.g., Miller v. Huntington National Bank N.A., 2013 WL 387842 (N.D.W.Va. July 26, 2013) (finding that this
factor was neutral in a case in which plaintiff alleged state law claims including unconscionable contracts and fraud
and sought in part to void his mortgage loan.) The Court notes that there is no indication that the plaintiff in that case
had entered into an agreement with the trustee concerning potential recovery from the lawsuit.

18

(“the plaintiffs requested a jury trial, counseling in favor of abstention and remand.”); Kerusa Co.
LLC v. W10Z/515 Estate Ltd. P’Ship, 2004 WL 1048239 (S.D.N.Y May 7, 2004) (“Because a
bankruptcy court cannot conduct a jury trial absent special designation by the district court and the
consent of all parties, 28 U.S.C. § 157(e), the presence of a Seventh Amendment jury trial right in
a removed action weighs heavily in favor of remand.”). Ms. Walters’ access to a jury trial in the
Circuit Court of Raleigh County, West Virginia, is procedurally straightforward. However, her
right to a jury trial in or through federal bankruptcy court is more complicated. If the case is
found to be a “core proceeding,” then, pursuant to 28 U.S.C. §157(e), if the right to a jury trial
applies, the bankruptcy court may only “conduct the jury trial if specially designated to exercise
such jurisdiction by the district court and with the express consent of the parties.” 28 U.S.C. §
157(e). However, if the parties do not consent, the case may be referred to this Court. The
relative procedural ease and, presumably, the speed with which the Circuit Court could provide a
jury trial weigh in favor of equitable remand. See In re Kaiser Group Intern., Inc., 421 B.R. 1,
17-18 (Bkrtcy.D.Dist.Col., Nov. 09, 2009.) The Court finds that the Bankruptcy Court did not
abuse its discretion in finding that comity considerations and Ms. Walters’ desire to exercise her
right to a jury trial weighed in favor of remand.
The Bankruptcy Court also found that the factor relative to “economical use of judicial
resources” weighs in favor of equitable remand because the Circuit Court will be able to
expediently impanel a jury whereas it may only be able to send the case to this Court where it
would become an active case on the docket. (Document 4-8 at 2); (Document 21-1 at 16.) The
Bankruptcy Court also considered whether the case involves questions of state law better
addressed by the state court and found that federal law is inapplicable in this case and state courts

19

handle these types of cases regularly. (Document 48-8 at 2); (Document 21-1 at 17.) Moreover,
in the event that unresolved legal issues appear, the parties will both benefit from litigating in a
forum that more frequently deals with those claims and issues. See e.g., Thompson v. Bert Wolfe
Ford, Inc., 2013 WL 1789299 (S.D.W.Va. April 26, 2013) (J. Copenhaver). At the hearing, Judge
Pearson also indicated that Ms. Walters may be prejudiced “by the uncertainty of just how and
where and [by] what court” the issues will be resolved. (Document 21-1 at 19.) No abuse of
discretion by the Bankruptcy Court can be found in the record relative to its finding that these
factors also weighed in favor of equitable remand.
Finally, the Bankruptcy Court found that the effect of remand on the administration of the
bankruptcy estate was neutral. The Bankruptcy Court noted that “the trustee is already monitoring
the claim” so remand would not impact the efficiency with which the claim is handled. (Document
21-1 at 16-17.) Given the amendment of her schedule of assets and the agreement between her
and the Trustee, regardless of whether the state court or the bankruptcy court resolves Ms. Walters’
claims, the Trustee may have additional assets to administer. There is no indication that the
efficient administration of the bankruptcy estate would be impacted by remand. See Miller, 2013
WL 3878742.
After careful review, the Court finds no abuse of discretion by the Bankruptcy Court. An
abuse of discretion occurs when the reviewing court is left with the “definite and firm conviction
that the [bankruptcy] court . . . committed a clear error of judgment in the conclusion it reached
upon a weighing of the relevant factors” or “where it improperly applies the law or uses an
erroneous legal standard.” United States v. Haywood, 280 F.3d 715, 720 (6th Cir.2002) (quoting
Huey v. Stine, 230 F.3d 226, 228 (6th Cir.2000) (citations and internal quotation marks omitted),

20

abrogate on other grounds by Muhammad v. Close, 540 U.S. 749 (2004)). Based on the reco on
ed
g
M
v
d
ord
appeal, th Court is not left with any such “de
he
n
a
efinite and fir convictio (Id.) The
rm
on.”
erefore, the C
Court
finds that the decision of the Ban
t
nkruptcy Cou should be affirmed.
urt
e

CON
NCLUSION
N
Based on the findings he
B
e
erein, the Court ORDE
ERS that the decision of the Bankru
e
f
uptcy
Court gra
anting Appellee’s Motio to Reman this action to the Circ Court of Raleigh Co
on
nd
n
cuit
f
ounty,
West Vir
rginia, pursu to 28 U.S.C. § 1452(b) be AFFI
uant
IRMED.
The Court DIRECTS th Clerk to send a copy of this Orde to counsel of record a to
T
D
he
s
er
l
and
any unrep
presented pa
arty.
ENTER:

21

October 1, 2013