American Fidelity Investments v. Gagel (In re GWF Investment, Ltd.)

20 B.R. 122, 6 Collier Bankr. Cas. 2d 1373, 1982 Bankr. LEXIS 4134, 9 Bankr. Ct. Dec. (CRR) 185
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedMay 14, 1982
DocketAdv. No. 3-81-0733; Bankruptcy No. 3-81-00699
StatusPublished
Cited by3 cases

This text of 20 B.R. 122 (American Fidelity Investments v. Gagel (In re GWF Investment, Ltd.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Fidelity Investments v. Gagel (In re GWF Investment, Ltd.), 20 B.R. 122, 6 Collier Bankr. Cas. 2d 1373, 1982 Bankr. LEXIS 4134, 9 Bankr. Ct. Dec. (CRR) 185 (Ohio 1982).

Opinion

DECISION AND ORDER

CHARLES A. ANDERSON, Bankruptcy Judge.

PRELIMINARY PROCEDURE

This matter is before the Court on Plaintiff’s Motion to Remand the instant adversarial proceeding to the Municipal Court of the City of Dayton, Ohio. The Court considered the Motion at a pretrial conference held on 4 January 1982. At the pretrial, the parties decided that the Court could render decision based upon the record. Defendant also indicated at the pretrial that he would submit a memorandum contra to Plaintiff’s memorandum, attached to the Motion, within fourteen days of the pretrial. The Court notes that to date no memorandum has been filed on Defendant’s behalf. The following decision is based upon Plaintiff’s memorandum and the record.

FINDINGS OF FACT

This proceeding was commenced by the filing of a Complaint in Forcible Detainer (Case No. 81-CVG-8153) by Plaintiff in the Municipal Court of the City of Dayton, Ohio, on 31 July 1981. The action is essentially an eviction action whereby Plaintiff prays for restitution of the premises, an apartment complex known as Hampton Square, from Defendant, the “lessee.” The Court notes that this Complaint was filed subsequent to the filing date of Debtor’s bankruptcy petition (5 March 1981).

On 30 October 1981, Defendant filed an Application for Removal to this Court. Defendant contends that Debtor possesses equitable title to the subject property, and that this Court therefore possesses exclusive jurisdiction over the res, and concurrent jurisdiction over the action. 28 U.S.C. § 1471(b) and (e). Apparently, Defendant contends that its leasehold interest, created through arrangements indicating that [124]*124Plaintiff is legal titleholder, was, in substance, intended to constitute equitable title to the subject property, and that Debtor is a subsequent transferee of the alleged equitable title. The Court notes that there are no proceedings before the Court for determination of Debtor’s interest in the subject property.

In response, Plaintiff filed the instant Motion to Remand on 16 November 1981. Plaintiff initially contends that the matter should be remanded for noneompliance with Interim Bankruptcy Rule 7004, specifically for failure to remove within thirty days of the filing of a post-petition complaint, and failure to provide bond. Interim Rules 7004(a)(2) and (b), respectively. Plaintiff further contends that, in addition to the alleged procedural defects, the Court should remand the proceeding on substantive and equitable grounds alleged, as follows: Debtor is not a party to the instant proceeding; Defendant has provided no documentation of the Debtor’s alleged interest in the subject property; the proceeding is unrelated to, and can be decided independently of, any determination that this Court may render in the future in regard to Debtor’s interest in the subject property; only state law questions are at issue; and this matter does not necessitate resolution by this Court in order to protect Debtor’s estate.

I

The initial question before the Court is whether Bankruptcy Rule 906 affords the discretion to permit removal to this Court after expiration of the thirty day period prescribed in Interim Rule 7004(a)(2).

Interim Rule 7004(a)(2) is a rule of local bankruptcy procedure. As such, it is not determinative of this Court’s jurisdiction over a removed matter, but instead merely establishes the guidelines for removal. As a procedural matter, it is the opinion of this Court that it may be deemed permissive, at the discretion of the Court.

This Court is cognizant of case law which has interpreted the thirty day provision of Interim Rule 7004(a)(2) as mandatory. In Re Alton Telegraph Printing Co., Inc., 15 B.R. 367 (Bkrtcy.S.D.Ill.1981); In Re McCallum, 7 B.R. 76, 6 B.C.D. 1223 (Bkrtcy.C.D.Cal.1980); and Matter of Northern Pipeline Construction Co., 6 B.R. 928, 6 B.C.D. 1277, 3 C.B.C.2d 456 (Bkrtcy.D.Minn.1980). This case law is rooted largely in federal case law dealing with removal to district courts under 28 U.S.C. § 1446, which some courts have read in pari mate-ria with Interim Rule 7004(a). In Re Alton Telegraph Printing Co., Inc., supra, at 370; and In Re McCallum, supra, at 77.

This Court, however, is of the opinion that the concerns pertaining to timely removal to a district court are markedly different from those regarding the exercise of bankruptcy court jurisdiction over a removed proceeding. Generally, removal to district court is a’ right afforded to defendants who may otherwise be prejudiced by the plaintiff’s choice of a local state forum or by unequal docket backlogs in the two forums. In the context of the district court, therefore, the basic function of the right of removal is to abate the potential abuse resulting from what would otherwise be a plaintiff’s prerogative in choosing between forums with concurrent jurisdiction. The circumstances for exercise of district court jurisdiction over cases removed untimely are, therefore, generally not compelling since district court refusal to accept removal jurisdiction does not leave the parties without a competent forum for adjudication of the questions raised. The removal provisions to a district court under 28 U.S.C. § 1446(b) are statutory and jurisdictional.

In the context of bankruptcy court litigation, however, the circumstances for exercise of jurisdiction over a proceeding removed by an untimely application may be considerably more compelling. Foremost, acceptance of an untimely application for removal may be necessary to enable the expeditious and effective administration of the bankruptcy proceeding, particularly if the proceeding is dispositive of property rights within the exclusive jurisdiction of [125]*125the bankruptcy court. 28 U.S.C. § 1471(e). Circumstances may exist in which a bankruptcy court’s automatic decline of the exercise of jurisdiction over a removed matter on the ground of procedural untimeliness may have substantive ramifications, including the potential complete halt of administration of a debtor’s estate, concerns which are not presented in the typical refusal by a district court to exercise jurisdiction over a removed proceeding because of procedural untimeliness.

Given these sui generis concerns, it is the determination of this Court that statutory limitations in 28 U.S.C. § 1446 should not be read in pari materia with Interim Rule 7004. It is the further finding of the Court that the “mandatory” and “strict application” by district courts of the time period for removal to district court, (See, for example, Albonetti v. GAF Corporation-Chemical Group, 520 F.Supp. 825 (D.C.Tex.1981); and Perrin v. Walker, 385 F.Supp. 945 (D.C.Ill.1974)), would be an unwise approach for consideration of untimely removed proceedings by bankruptcy courts, and that bankruptcy courts should exercise discretion under Bankruptcy Rule 906(b)(2) pertaining to enlargement of time limitations in the Rules, there being no jurisdictional limitation under 28 U.S.C.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
20 B.R. 122, 6 Collier Bankr. Cas. 2d 1373, 1982 Bankr. LEXIS 4134, 9 Bankr. Ct. Dec. (CRR) 185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-fidelity-investments-v-gagel-in-re-gwf-investment-ltd-ohsb-1982.