Opinion
Case No. 4:11-bk-06731-EWH, Adv. No. 4:11-ap-00664-EWH.
May 13, 2011
MEMORANDUM DECISION
I. FACTUAL AND PROCEDURAL HISTORY
On April 6, 2011, Petitioning Creditor Marshall E. Home ("Home") filed a notice of removal of Pima County Superior Court Case # 20103852 (the "Removed Action") to this Court as a related proceeding to an involuntary Chapter 11 case filed by Home against "U.S. Corp." The Removed Action is a forcible entry and detainer action ("FED Action") against Home by Federal National Mortgage Association ("FNMA"). In the Removed Action, Home also filed a number of counterclaims against FNMA and other parties and a motion for summary judgment. The state court entered an order on March 21, 2011 in favor of FNMA on the FED Action and denied Home's counterclaims and motion for summary judgment.
II. ISSUE
Should the court remand the removed adversary?
III. JURISDICTIONAL STATEMENT
Jurisdiction is proper under 28 U.S.C. §§ 157(c) and 1334.
IV. DISCUSSION
A. Failure of Removing Creditors to Comply with Removal Rules
Rule 9027 governs the procedure for removing a state court case to bankruptcy court. Removal is accomplished by the filing in the bankruptcy court of a verified application containing a short and plain statement of the facts that entitle the applicant to remove. The application must be accompanied by a copy of all process and pleadings filed in the state court. Promptly after filing the application, the applicant is required to serve a copy of the application on all parties to the removed claim or cause of action.
There is no evidence that any of those procedures were followed in this adversary proceeding.
B. Court's Authority to Remand Sua Sponte
A bankruptcy court's power to remand is governed by 28 U.S.C. § 1452(b), which provides in relevant part: "The court to which [a] claim or cause of action is removed may remand such claim or cause of action on any equitable ground." Given this broad grant of discretion, "a federal bankruptcy court [generally] does not have to rely upon a motion by any party to remand a case. Instead, the court can consider, upon its own motion, its jurisdiction over the subject matter and whether to remand the matter to state court. Texas Gulf Trawling Co. v. RCA Trawlers Supply, Inc. (In re Ciclon Negro, Inc.), 260 B.R. 832, 837 (Bankr. S.D. Tex. 2001).
C. Basis for Removal
To evaluate whether to remand, the court in Ciclon considered the convenience of the forum; (2) the presence of non-debtor parties; (3) whether the case should be tried as a whole in state court; (4) the duplicative and uneconomic effect of judicial resources in two forums; (5) the lessened possibility of inconsistent results; (6) whether the state court would be better able to handle issues of state law; (7) the expertise of the Bankruptcy Court; (8) the degree of relatedness or remoteness to the main bankruptcy case; (9) prejudice to involuntarily removed parties; (10) whether the case involves forum shopping; (11) the burden on the Bankruptcy Court's docket; and (12) considerations of comity. Id. In light of the fact that the Pima County court had issued a determinative ruling on March 21, 2011, this court finds that the case should be remanded to that court.
V. CONCLUSION
For the foregoing reasons, a separate order will be issued remanding the Removed Action to the court from which it was removed.