MEMORANDUM OPINION AND ORDER

Now before the Court are the following:

1. Defendant/Counter-Plaintiff Baldwin's Motion to Remand, with brief in support and appendix, filed January 25, 2002;

2. Ralphaell V. Wilkins' Response and Brief in Opposition to Defendant Darrell Baldwin's Motion to Remand, filed February 22, 2002; and

3. Defendant/Counter-Plaintiff Baldwin's Reply to Ralphaell V. Wilkins' Response to Motion to Remand.

After a thorough review of the evidence, the pleadings, the parties' briefs, and the applicable law, for the reasons set forth below, the Court is of the opinion that Baldwin's Motion to Remand should be GRANTED.

BACKGROUND

This was an action originally filed by Felipe Flores, Francisca Flores, and Martha Rodriguez ("Plaintiffs") against Darrell Baldwin ("Baldwin" or "Defendant/Counter-Plaintiff") on October 20, 1995 in the County Civil Court at Law Number One (1), Dallas County, Texas for a rear-end collision which occurred between the parties on July 5, 1995. The case was docketed under cause number CC-95-08048-A and assigned to the Honorable David Evans.

Plaintiffs were originally represented by attorney Tami Nystrom ("Nystrom") of the Nystrom law office. According to Baldwin, an investigation following the commencement of this suit indicated that virtually all of the claims from the Nystrom law office, including that of Plaintiffs, fit a distinct pattern and involved automobile collisions that appeared to be deliberately caused by the firm's clients. Def./Counter-P1. Baldwin's Br. in Supp. of Mot. to Remand ("Remand Br.") at 2. As such, on December 18, 1995, Baldwin filed an Amended Answer and an Original Counterclaim against Plaintiffs for fraud and assault. Remand Br. at 2.3. Later, on July 2, 1997, Baldwin filed a Second Amended Answer, First Amended Counterclaim and Original Action adding as parties Ms. Nystrom, Rita Frillarte ("Frillarte"), who was the officer manager of the Nystrom law office, Enrico Dolay ("Dolay") who was a "runner" or "capper" for the office, and Ralphaell V. Wilkins ("Wilkins"), a Houston attorney who Baldwin believed was the actual owner of the Nystrom law office in Dallas. It was Baldwin's belief that these defendants were using said law office as a conduit for presenting staged and intentionally caused collision claims against him and others. See Remand Br. at 5; see also Notice of Removal, Tab 4 at 6.

Prior to filing his July 2, 1997 amended complaint, Baldwin asserts that Wilkins made several efforts to obstruct discovery in this suit. Remand Br. at 3. An example of this occurred following Baldwin's noticing of Nathaniel Hawthorne Smith, the successor to the Nystrom law office, for a deposition on November 7, 1996. Id. Wilkins, on behalf of Smith, filed a Motion to Quash and for a Protective Order asserting a privilege against self-incrimination. See App. Remand Br., Exh. D at 41-49. In an order dated December 2, 1996, Judge Evans denied the Motion to Quash, and ordered Smith to appear for deposition. App. Remand Br., Exh. E at 51-55. Smith then failed to appear for his scheduled December 3, 1996 deposition, prompting Baldwin to file a Motion for Sanctions against Smith and Wilkins on December 5, 1996. Remand Br. at 4. On December 18, 1996, Judge Evans granted Baldwin's motion and entered monetary sanctions against both Smith and Wilkins, as well as ordered Smith to appear for deposition on January 2, 1997. Id.

Baldwin asserts he also noticed Wilkins for a deposition, scheduling it for Monday, December 23, 1996. Id. On Friday, December 20, 1996 at 4:45 p.m., Wilkins faxed Baldwin's counsel a letter stating that he was taking antibiotics and could not appear; he also filed a Motion to Quash the Deposition. Id. Baldwin then moved for sanctions against Wilkins, which Judge Evans granted on February 27, 1997, and further ordering Wilkins to appear for his deposition on March 10, 1997. Id.; see also App. Notice of Removal, Tab 11 at 1-2.

Eventually, Wilkins filed an Answer and Counterclaim against Baldwin on August 14, 1997., alleging that Baldwin's claims against him were brought for the purpose of harassment and in bad faith due to Wilkins' employment at a law firm that previously represented Plaintiffs in an action against Baldwin. See Notice of Removal, Tab 6 at 1-2.

On May 7, 1998, Wilkins filed a Chapter 13 Bankruptcy Petition in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Thereafter, Baldwin filed a motion for relief from the automatic stay of this case under 11 U.S.C. § 362, which the Bankruptcy Court granted on September 22, 1998. Specifically, the Bankruptcy Court's Order allowed the lawsuit styled Felipe Flores, Francisca Flores and Martha Rodriguez v. Darrell Baldwin v. Tami Nystrom, Ralphaell V Wilkins, Rita Frillarte and Enrico Dolay, Cause No. CC-95-08048-A, to proceed to judgment, including all appeals, but that no action was to be taken to enforce any judgment against debtor Wilkins or debtor's estate without further order of the Court. See App. Remand Br., Exh. J. at 1-2. Baldwin further filed a Complaint to Determine Dischargability of Debt against Wilkins in the bankruptcy proceeding on February 24, 1999, seeking to exempt from discharge Baldwin's claims against Wilkins as debts resulting from the "willful and malicious injury by the debtor" and as debts "for money . . ., obtained by . . . false pretenses, a false representation, or actual fraud. . . ." See Wilkins' Resp. and Br. in Opp., Exh. 6 at 12-13.

In November of 1998, Judge Evans was elected to the 193rd District Court. On December 31, 1998, Judge Evans signed an order transferring several cases, including this one, to the 193rd District Court, noting that the transfer was made, . . . . . in the interest of justice and for the efficient administration of the courts primarily due to the undersigned Judge's significant expenditure (or `investment') of time in these files." See Notice of Removal, Tab 16 at 1, 4.

On December 18, 2001, Frillarte, proceeding pro se, filed a Supplemental Answer and an Original Cross-Action against Wilkins, asserting that she was entitled to contribution and/or indemnification from Wilkins for any and all damages found against her, if any, in the suit brought by Baldwin. See Notice of Removal, Tab 8 at 4. Frillarte further asserted that if any fraudulent representation was made to Baldwin it was made by Wilkins and not by her. Id.

Judge Evans subsequently entered an order advising the parties that the case was set for trial on January 2, 2002. See Notice of Removal, Tab 22 at 1. Before such a trial took place, Wilkins filed a notice of removal with this Court on December 28, 2001, asserting that this case was removable pursuant to 28 U.S.C. § 1334, 1441(c), 1452 and Bankruptcy Rule 9027. Baldwin now moves for remand asserting that (1) Wilkins failed to comply with the Federal Rule of Civil Procedure and the Local Rules of the Northern District of Texas concerning removal by failing to file with this Court over thirty pleadings, motions, responses, and other documents filed in the state court action; and (2) Wilkins was already involved in a bankruptcy action in the Southern District of Texas, and the U.S. Bankruptcy Court had previously granted relief from the stay to proceed, while maintaining oversight with regards to the enforcement of any judgment. Remand Br. at 10-15. In the event that the Court rules Wilkins is entitled to removal under § 1334, Baldwin asks that the Court abstain from hearing the matter and remand the case to the 193rd District Court pursuant to 28 U.S.C. § 1334(c)(1) and/or (c)(2). Id. at 15-17. Each of these arguments shall be considered in turn.

DISCUSSION

I. Jurisdiction

It is axiomatic that the federal courts have limited subject matter jurisdiction and cannot entertain cases unless authorized by the Constitution and by legislation. Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996). Accordingly, there is a presumption against subject matter jurisdiction that must be rebutted by the party bringing an action to federal court. Id. In cases removed from state court, it is the removing party who bears the burden of proving that the court has jurisdiction to hear the claim. Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993).

Wilkins asserts that removal is proper here because his counterclaims against Baldwin alleging bad faith and retaliation are pre-petition claims which are bankruptcy estate assets, and Frillarte's cross-claims for indemnity and/or contribution are an attempt to liquidate an estate asset. Wilkins' Resp. and Br. in Opp. at 10-12. Under 28 U.S.C. § 1452(a), "[a] party may remove any claim or cause of action . . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." 28 U.S.C. § 1452(a) (2002). Section 1334 states, in relevant part, that "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." 28 U.S.C. § 1334(b) (2002) (emphasis added).

For the purpose of determining whether a particular matter falls within bankruptcy jurisdiction, it is not necessary to distinguish between proceedings "arising under," "arising in a case under," or "related to a case under" title 11. Matter of Wood v. Wood (In Re Wood), 825 F.2d 90, 93 (5th Cir. 1987). The test for jurisdiction is "whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy." Id. The Fifth Circuit has further clarified this test by stating that "an action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate. Bass v. Denney (Matter of Bass), 171 F.3d 1016, 1022 (5th Cir. 1999) (citing Walker v. Cadle Co., 51 F.3d 562, 569 (5th Cir. 1995)); see also Celotex Corp. v. Edwards, 514 U.S. 300, 308 n. 5 (1995) (holding that proceedings "related to" the bankruptcy include (1) causes of action owned by the debtor which become property of the estate pursuant to 11 U.S.C. § 541, and (2) suits between third parties which have an effect on the bankruptcy estate).

In this case, the Court finds that Wilkins counterclaim against Baldwin, as well as the claim for contribution filed by Frillarte against Debtor fall within the Court's jurisdiction under § 1334(b). Specifically, the counterclaim owned by Wilkins would become property of the estate as an interest acquired after the commencement of the bankruptcy proceedings. Meanwhile, the action for contribution and indemnity could conceivably alter the Debtor's rights and liabilities, as well as impact the handling of his bankrupt estate sufficiently to bring it within the "related to" jurisdiction of this Court. Cf. Arnold v. Garlock, Inc., 278 F.3d 426, 434-435 (5th Cir. 2001) (noting that a claim for contribution may be a sufficient basis for finding "related to" jurisdiction in bankruptcy, though the claim in that particular case was found invalid); see also In re Dow Corning, 86 F.3d 482, 490-94 (6th Cir. 1996) (finding that claims for indemnification and contribution could obviously affect the size of the estate and the length of time the bankruptcy proceedings would be pending, as well as debtor's ability to resolve its liabilities). At a minimum, the outcome of these proceedings would have a conceivable effect on Wilkins' estate as any recovery of monetary damages would necessarily accrue to the estate currently in bankruptcy. Therefore, the Court holds that removal was technically proper under these circumstances.

II. Failure to Comply with Removal Requirements

Under 28 U.S.C. § 1446(a), "[a] defendant or defendants desiring to remove any civil action from State court shall file in the district court . . . a notice of removal . . . together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action." 28 U.S.C. § 1446(a) (2002). Under the Northern District of Texas' Local Rules, the removing party must also file, among other things:

(3) an original and one copy of a notice of removal with a copy of each of the following attached to both the original and copy-

(A) an index of all documents that clearly identifies each document and indicates the date the document was filed in state court;

(B) a copy of the docket sheet in the state court action; and

(C) each document filed in the state court action, except discovery material, individually tabbed and arranged in chronological order according to the state court filing date.

L.R. 81.1(3). Baldwin asserts that Wilkins attached only twenty-one (21) such documents to his Notice of Removal, leaving out numerous other state court filings. See Remand Br. at 10-13 (listing over 33 documents not filed with Wilkins' notice of removal).

Regardless the Fifth Circuit long ago stated that "removal proceedings are in the nature of process to bring the parties before the Federal Court and mere modal or procedural defects are not jurisdictional." Covington v. Indemnity Ins. Co. of North Am., 251 F.2d 930, 933 (5th Cir. 1958). As Baldwin does not claim that he has been prejudiced in any way by Wilkins' failure to attach all executed pleadings and orders lacking from the removal record, the Court finds this deficiency is not a basis for remand since the record may be easily supplemented to correct any remaining defects.

III. Abstention in Favor of the State Court

Baldwin asserts that, even if Wilkins can make a colorable claim for removal under § 1334, the Court should abstain from exercising jurisdiction and should remand the case to the state court pursuant to § 1334(c). Under 28 U.S.C. § 1334(c), it is stated that:

(1) Nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11;

(2) Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction.

The current bankruptcy jurisdictional statute, 28 U.S.C. § 1334, expands the historic role of the federal district courts in bankruptcy. District courts now have "original and exclusive jurisdiction of all cases under title 11." 28 U.S.C. § 1334(a) (2002) (emphasis added). Thus, by the plain wording of the statute, Congress has expressed its intent that bankruptcy matters be handled exclusively in a federal forum. See MSR Exploration, Ltd. v. Meridian Oil, Inc., 74 F.3d 910, 913 (9th Cir. 1996). In short, "Congress intended to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate." Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995) (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rd Cir. 1984)).

Not all matters related to bankruptcies, however, fall within the orbit of those subject to this federal plenary power. In this respect, the distinctions made between "core" and "non-core" proceedings in the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. No. 98-353, 98 Stat. 340, are instructive. The 1984 Act was passed, in part, in response to Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 71 (1982), which distinguished between the "restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power," and "the adjudication of state-created private rights." As to the latter function, the Court held that Congress did not have the power to grant jurisdiction to the Article I bankruptcy courts over proceedings related to a bankruptcy case involving rights "created by state law" and "independent of and antecedent to the reorganization petition that conferred jurisdiction upon the Bankruptcy Court." Id. at 84. However, as to the former, the Court noted that "[o]f course, bankruptcy adjudications themselves, as well as the manner in which the fights of debtors and creditors are adjusted are matters of federal law." Id. at 84 n. 36.

As a result, Congress took it upon itself to define and distinguish between "core" and "non-core" proceedings in the 1984 Act. See 28 U.S.C. § 157 (2002). In general, a "core proceeding" in bankruptcy is one that "invokes a substantive right provided by title 11 or . . . a proceeding that, by its nature, could arise only in the context of a bankruptcy case." In re Wood, 825 F.2d at 97. "Non-core proceedings" are those not integral to the restructuring of debtor-creditor relations and not involving a cause of action arising under title 11. See Windsor Communications Group, Inc. v. Grant (In re Windsor Communications Group), 75 B.R. 713, 721 (E.D. Pa. 1985).

A non-exclusive list of "core" bankruptcy proceedings, as set forth in 28 U.S.C. § 157(b), includes: "matters concerning the administration of the estate"; "allowance or disallowance of claims against the estate"; "orders to turn over property of the estate"; "motions to terminate, annul, or modify the automatic stay"; "proceedings to determine, avoid, or recover fraudulent conveyances"; "determinations as to the dischargeability of particular debts"; "orders approving the sale of property"; and "other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor or the equity security holder relationship, except personal injury tort or wrongful death claims." 28 U.S.C. § 157(b) (2002). As noted above by the Court, it is clear from the evidence that Wilkins' counter-claims against Baldwin, as well as Frillarte's cross-claims against Wilkins, are actions which, at a minimum, would potentially affect the administration and the liquidation of assets of Debtor's estate. As such, the Court finds this to be a matter within the bankruptcy court's "core"jurisdiction and the decision whether to abstain from hearing it lies within the Court's discretion. See In re Southmark Corp., 163 F.3d 925, 932 (5th Cir. 1999); see also Gober v. Terra + Corp. (Matter of Gober), 100 F.3d 1195, 1206-07 (5th Cir. 1996) ("[n]othing prevents a court from permissively abstaining under § 1334(c)(1) where some, but not all, of the requirements for mandatory abstention are met").

In deciding whether to exercise its discretionary power under § 1334(c)(1), the Court must apply a twelve (12) factor checklist to determine whether it should abstain in favor of a state court's adjudication of an issue. These twelve factors are as follows:

(1) the effect or lack thereof on the efficient administration of the estate if a Court recommends abstention;

(2) the extent to which state law issues predominate over bankruptcy issues;

(3) the difficulty or unsettled nature of the applicable 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 [the bankruptcy court's] docket;

(10) the likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties;

(11) the existence of a right to a jury trial; and

(12) the presence in the proceeding of non-debtor parties.

See In re Republic Reader's Serv., Inc., 81 B.R. 422, 429 (Bankr. S.D. Tex. 1987); see also In re Tucson Estates, Inc. v. Tucson Estates, Inc., 912 F.2d 1162, 1167 (9th Cir. 1990) (citing In re Republic Reader's); Matter of Chicago, Milwaukee, St. Paul Pacific R. Co., 6 F.3d 1184, 1189 (7th Cir. 1993).

First of all, this lawsuit has been on file with the Texas state court for almost seven years and Baldwin's claims against Wilkins and Frillarte have been pending since July 1997. In the meantime, Judge Evans has become intimately familiar with the parties and the issues in these proceedings, ruling on numerous discovery motions and disputes which have arisen. Additionally, this case had been set for trial on January 2, 2002, at which point Wilkins removed the case on December 28, 2001. As the Bankruptcy Court in Republic Reader's once held, "[w]here a cause of action for monetary damages based primarily on state law can be litigated in state court without substantial delay and disruption to the orderly administration of the estate, the best forum for resolution of that action is state court, irrespective of whether the legal issues present unsettled questions of state law." In re Republic Reader's, 81 B.R. at 426. As such, the Court finds that this first factor weighs in favor of abstention.

To the extent that state law issues predominate, if a state law issue is not unsettled, or if there is no state authority directly on point, then this Court is equally qualified to resolve the issues, and thus the second and third factors cut against abstention in favor of the Texas state court proceedings. See Matter of Chicago, Milwaukee, St. Paul Pacific R. Co., 6 F.3d at 1189 n. 8. (holding the same). However, factors four through six weigh in favor of abstention since, if remand of the entire case were made, the parties would be able to litigate this lawsuit in a related proceeding originally commenced in state court for which no alternative jurisdictional basis exists other than through the court's bankruptcy jurisdiction.

As for factors seven and eight, although the Court has found these causes of action to be core" proceedings, the Bankruptcy Court's order of September 22, 1998 already had granted the parties relief from the automatic stay under 11 U.S.C. § 362, specifically allowing this lawsuit to proceed to judgment, including all appeals, while withholding any enforcement actions against Debtor or Debtor's estate until a further order from the bankruptcy court. See App. Remand Br., Exh. J. at 1-2. Thus, factors seven and eight weigh in favor of abstention as it is feasible to sever the state law claims from other core bankruptcy matters to allow the state court suit to proceed, with enforcement left to the bankruptcy court.

As for factors nine and ten, although it is likely the bankruptcy court's docket would not be overburdened by this case, Wilkins removed this action only five [5] days prior to it being scheduled to go to trial, likely for purposes of forum shopping, thereby mitigating in favor of abstention to the state court. Factor eleven does not weigh either in favor or against abstention since it is unclear from the record whether a trial by jury had been requested by any of the parties. And finally, factor twelve weighs in favor of abstention because Baldwin is also suing non-debtor parties in this action. Therefore, this Court finds that the balancing of the pertinent factors weighs in favor of its abstention of the cross-claims in deference to the state court proceedings under 28 U.S.C. § 1334(c)(1).

The Court further notes that under § 1452(b), related to removal of claims related to bankruptcy cases, "the court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable grounds." 28 U.S.C. § 1452(b) (2002). Among those equitable considerations that are relevant to a decision to remand, the Fifth Circuit has included:

(1) forum non conveniens;

(2) a holding that, if the civil action has been bifurcated by removal, the entire action should be tried in the same court;

(3) a holding that a state court is better able to respond to questions involving state law;

(4) expertise of the particular court;

(5) duplicative and uneconomic effort of judicial resources in two forums;

(6) prejudice to the involuntarily removed parties;

(7) comity considerations; and

(8) a lessened possibility of an inconsistent result.

Browning v. Navarro, 743 F.2d 1069, 1076 n. 21 (5th Cir. 1984); see also In re Fairchild Aircraft Corp., Bankruptcy No. 90-50257C, 1990 WL 119650 at *4 (Bankr. W.D. Tex. June 18, 1990). An analysis of these considerations, specifically noting the expertise of Judge Evans with these underlying proceedings, as well as the duplicative efforts that would be involved in bringing this case to trial in federal court, leads this Court to the conclusion that this entire action should be remanded to the state court for its resolution.

More importantly, the bankruptcy judge in this case has already granted the parties relief from the automatic stay under 11 U.S.C. § 362. In fact, Wilkins' counterclaim against Baldwin was on file over ten months prior to his filing for bankruptcy protection, and over a year prior to the Bankruptcy Court's ruling on Baldwin's motion for relief from the automatic stay. As previously stated, the Bankruptcy Court's Order specifically allowed the lawsuit styled Felipe Flores, Francisca Flores and Martha Rodriguez v. Darrell Baldwin v. Tami Nystrom, Ralphaell V Wilkins, Rita Frillarte and Enrico Dolay, Cause No. CC-95-08048-A, to proceed to judgment, including all appeals, but withholding the enforcement of any judgments against debtor Wilkins or debtor's estate until further order by the court. See App. Remand Br., Exh. J. at 1-2. The Court finds that this stay encompassed all of the claims which were present in the lawsuit at the time of its entry, including Wilkins' counterclaim against Baldwin. Where, as here, the parties were readily proceeding to litigate their respective rights and liabilities in state court (subject to the bankruptcy court's enforcement of any judgments against Debtor or his estate), the Court finds that all the equitable factors, on balance, favor remand and abstention of this entire case in favor of proceedings in the 193rd District Court, Dallas County, Texas.

CONCLUSION

Having thoroughly reviewed the evidence, the pleadings, the parties' briefs, and the applicable law, for the reasons set forth above, the Court finds that Defendant/Counter-Plaintiff Baldwin's Motion to Remand is GRANTED, and this case is remanded to the 193rd District Court of Dallas County, Texas.