Opinion
ORDER ON MOTION TO REMAND
Peter W. Bowle, Chife Judge, United States Bankruptucy Court
The estate's complaint against defendants/cross-complainants has been resolved. The non-debtor defendants/cross-complainants now seek to have the remainder of the adversary proceeding, consisting solely of the cross-complaint against non-debtor cross-defendants, remanded to the court from whence it came. The Court finds that equitable grounds exist to warrant remand and thus grants defendants/cross-complainants' motion.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334 and General Order No. 312-D of the United States District Court for the Southern District of California. This is a non-core "related to" proceeding under 28 U.S.C. § 157(c).
DISCUSSION
The adversary proceeding stems from a complaint filed in the San Diego Superior Court by AMC Partners, LLC (Debtor) against David Gaines and Trevor Abney (Gaines and Abney) alleging, among other things, breach of fiduciary duty and conversion. The complaint prompted a cross-complaint by Gaines and Abney against the Debtor and Thomas A. Waltz, T. Waltz, Steven Salisbury and the Waltz Family Limited Partnership (Waltz-Defendants) alleging similar causes of action.
In January 2006 the Debtor filed the petition commencing this bankruptcy case. Shortly thereafter Debtor had this matter removed to this Court. In December 2007 the case was converted and Gerald Davis was appointed chapter 7 trustee.
In February 2009 this Court granted the Trustee's motion to settle the estate's claims against Gaines and Abney. The settlement included dismissal of the estate's claims against Gaines and Abney in this adversary proceeding and a subordination of Gaines and Abney's claims against the estate.
The only remaining claims in this adversary proceeding are those of Gaines and Abney against the non-debtor Waltz-Defendants set out in the cross-complaint. Gaines and Abney have moved the Court to remand the remainder of this proceeding to the court from whence it came pursuant to 28 U.S.C. § 1452(b).
Section 1452(b) states "the court to which such claim or cause of action is removed may remand such claim of cause of action on any equitable ground." The "any equitable ground" standard was recently and ably applied by Judge Adler in In re Roman Catholic Bishop of San Diego, 374 B.R. 756 (Bankr.S.D.Cal. 2007):
The "any equitable ground" standard is not statutorily defined. Accordingly, case law has imported the "factors" governing discretionary abstention to assist with the remand decision. The imported factors are:(1) the effect or lack thereof on the efficient administration of the estate if the Court recommends [remand or] abstention; (2) extent to which state law issues predominate over bankruptcy issues; (3) difficult or unsettled nature of applicable law; (4) presence of related proceeding commenced in state court or other nonbankruptcy proceeding; (5) jurisdictional basis, if any, other than § 1334; (6) degree of relatedness or remoteness of proceeding to main bankruptcy case; (7) the substance rather than the 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 on 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;(12) the presence in the proceeding of nondebtor parties; (13) comity; and (14) the possibility of prejudice to other parties in the action. While these factors assist a court's remand decision, they do not control it. The standard remains "any equitable ground."
Id. at 761-62 (citations omitted).
The Court is convinced that an application of the factors to the case at hand justifies remand of this matter to the court from which it sprung.
Though the Court is capable of resolving this dispute, the administration of the underlying bankruptcy case would be eased by remand and the state court is perhaps better suited to handle the matter as the causes of action are based in state law and there are no bankruptcy issues. So far as the Court can tell, there are no difficult or unsettled legal issues. If there are, however, they would be state law issues with which the state court is well equipped to deal. Since the estate has no interest in the adversary, it is not related to the main bankruptcy case. This is not a core proceeding. There are no bankruptcy matters which would have to be severed from the state law claims. Though this case is not a particular burden on the bankruptcy court's docket, the Court does have many other matters to which it can address its attention. The Court is not convinced that Gaines and Abney are forum shopping since the case would simply be going back to the court from which it originated against them. Gaines and Abney do assert a right to a jury trial. There are only nondebtor parties. Comity is observed by returning this case to the court of its origin. Finally, the Court is not convinced that remand will prejudice the Waltz-Defendants.
CONCLUSION
For the foregoing reasons, the Court is satisfied that equitable grounds support remand of this adversary proceeding. Therefore, Gaines and Abney's motion to remand is granted unless the District Court, upon timely de novo review, holds otherwise.