Opinion
No. 74 B 1638-40
November 5, 1979
David Otis Fuller, Jr., New York City, for defendant.
Rogers Wells, New York City, for plaintiff.
Jurisdiction — Summary — Enforcement of Contract Action
An action brought by the trustee to collect damages for breach of contract was dismissed by the court for lack of subject matter jurisdiction under Section 2a(7) of the Bankruptcy Act. Absent consent to the court's summary jurisdiction, only rights and claims to property in the actual or constructive possession of the bankruptcy court may be adjudicated by it. See Sec. 2a(7) at ¶ 2048 and Rule 712 at ¶ 20,212.
[Digest of Opinion]
The trustee commenced an adversary proceeding seeking recovery from the defendant of the alleged value of services performed by the bankrupts pursuant to a contract with the defendant. The defendant argued that the trustee's complaint should be dismissed for lack of subject matter jurisdiction pursuant to Bankruptcy Rule of Procedure 712. Absent consent, the bankruptcy court has jurisdiction to summarily adjudicate rights and claims only if they are in the actual or constructive possession of the bankruptcy court under Section 2a(7) of the Bankruptcy Act. Since the present action was not one to recover ". . .any specific property or fund which was part of the bankrupt estate, but is rather to enforce a chose in action, i.e. to collect damages for breach of contract and thereby obtain indemnification, this is not a proper case for summary jurisdiction." Therefore, the complaint was dismissed for lack of the bankruptcy court's jurisdiction.