Bayless v. Crabtree Through Adams

108 B.R. 299, 29 Fed. R. Serv. 764, 1989 U.S. Dist. LEXIS 14483
CourtDistrict Court, W.D. Oklahoma
DecidedDecember 4, 1989
DocketAdv. No. 88-0281-TS, Bankruptcy Nos. 87-9110-TS, 87-9114-TS, No. CIV-89-1337-A
StatusPublished
Cited by32 cases

This text of 108 B.R. 299 (Bayless v. Crabtree Through Adams) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bayless v. Crabtree Through Adams, 108 B.R. 299, 29 Fed. R. Serv. 764, 1989 U.S. Dist. LEXIS 14483 (W.D. Okla. 1989).

Opinion

ORDER

ALLEY, District Judge.

The defendants, Catherine Dianne and David Lynn Crabtree (Crabtree Children), appeal from an order of the Honorable John Teselle, United States Bankruptcy Judge, styled Order Concerning Ownership of Property, Modifying Preliminary Injunction Order, and Granting Permanent Injunction (Permanent Injunction Order). The Court properly exercises jurisdiction over this appeal pursuant to 28 U.S.C. § 158(a).

The Crabtree Children challenge the Bankruptcy Judge’s Order on several grounds. Generally, they contend that the Permanent Injunction Order cannot stand because the Bankruptcy Judge: (1) lacked jurisdiction over the subject matter; (2) denied them a trial by jury guaranteed by the seventh amendment and a fair hearing guaranteed by the due process clause of the fifth amendment; (3) erred in his determination that the purported gift of the property at issue is invalid under Oklahoma law; (4) erred in ordering the turnover of the contested property, in view of the Trustee’s burden of proof to establish that the property is, in fact, property of the debtors’ estates; and (5) erred in admitting into evidence certain materials generated in related state court litigation.

Having carefully considered the briefs and other pertinent materials, the Court finds that, in all respects, the Crabtree Children’s challenge is without merit. Accordingly, the Bankruptcy Judge’s Permanent Injunction Order is AFFIRMED.

I. STANDARD OF REVIEW

In reviewing a Bankruptcy Judge’s decision, the Court functions as an appellate court and is authorized to affirm, reverse, or modify the Bankruptcy Judge’s ruling or to remand the case for further proceedings. Fed.R.Bankr.P. 8013. The Court is bound to accept the Bankruptcy Judge’s findings of fact unless they are clearly erroneous, but may examine the Bankruptcy Judge's conclusions of law de novo. In re Mullet, 817 F.2d 677, 678-79 (10th Cir.1987); In re Branding Iron Motel, Inc., 798 F.2d 396, 399-400 (10th Cir.1986). A factual finding is clearly erroneous “when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake *302 has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)).

II. SUBJECT MATTER JURISDICTION The Crabtree Children attack the subject matter jurisdiction of the Bankruptcy Judge on two principal grounds: first, they contend that the jurisdictional provisions of the Bankruptcy Amendments and Federal Judgeship Act of 1984 (BAFJA) are unconstitutional; and second, they contend that, even if the BAFJA is constitutional, there was no subject matter jurisdiction as to the adversary dispute at bar because a determination of the ownership of property cannot be the basis for a “core proceeding” within the meaning of 28 U.S.C. § 157(b)(2). Under the weight of authority, the two arguments must fail.

The Crabtree Children’s challenge to the constitutionality of the BAFJA is somewhat ill-defined. Apparently, the Crabtree Children contend that the BAFJA is unconstitutional because it permits federal district courts to render final judgments on state-law causes of action, under circumstances where diversity is lacking, simply because these causes of action are “related to” bankruptcy proceedings. See generally 28 U.S.C. §§ 157(c), 1334(b). That is, the Crabtree Children contend that the BAFJA is unconstitutional in that it purports to confer jurisdiction on district courts that exceeds the limits of Article III. 1

As framed, the Crabtree Children’s constitutional challenge is meritless. Principally, the Crabtree Children base their challenge on the Supreme Court’s decision in Northern Pipeline Const. v. Marathon Pipeline Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). In Northern Pipeline, the Supreme Court invalidated key jurisdictional provisions of the Bankruptcy Reform Act of 1978 on the ground of separation of powers. These provisions permitted non-Article III Bankruptcy Judges, without life tenure and protection against salary diminution, to render final judgments in traditional state-law contract actions. 458 U.S. at 87, 102 S.Ct. at 2880; See Thomas v. Union Carbide Agr. Products Co., 473 U.S. 568, 584, 105 S.Ct. 3325, 3334, 87 L.Ed.2d 409 (1985).

The Northern Pipeline decision is, to be sure, somewhat abstruse and open to considerable interpretation. However, it is quite clear that the Supreme Court in Northern Pipeline did not bar federal dis *303 trict courts (vested with the judicial power under Article III) from adjudicating state-law matters related to proceedings in bankruptcy. Indeed, the Northern Pipeline Court in a footnote discussing the state-law contract action at issue noted: “This claim may be adjudicated in a federal court on the basis of its relationship to the petition for reorganization.” 458 U.S. at 72 n. 26, 102 S.Ct. at 2872 n. 26; see In re Colorado Energy Supply, Inc., 728 F.2d 1283, 1285 (10th Cir.1984) (noting that the jurisdictional bar of Northern Pipeline is “quite limited”; it provides for the final adjudication by an Article III court of state common law causes of action that are related to bankruptcy proceedings). Moreover, in their constitutional analysis, the Crabtree Children assume that their state-law action as to the ownership of the property at issue is merely “related to” the instant bankruptcy case. As noted below, this assumption is without foundation.

In their second challenge to jurisdiction, the Crabtree Children contend that the instant adversary dispute is not a core proceeding and, consequently, the Bankruptcy Judge lacked the power to enter a final judgment. A proceeding is “core” if it arises under title 11 or arises in a case under title 11. 28 U.S.C. § 157(b)(1).

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Cite This Page — Counsel Stack

Bluebook (online)
108 B.R. 299, 29 Fed. R. Serv. 764, 1989 U.S. Dist. LEXIS 14483, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bayless-v-crabtree-through-adams-okwd-1989.