E.F. Wonderlic & Associates v. Parma, Inc. (In Re Tandem Enterprises, Ltd.)

124 B.R. 283, 1991 Bankr. LEXIS 226, 21 Bankr. Ct. Dec. (CRR) 655, 1991 WL 24986
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedFebruary 4, 1991
Docket15-29955
StatusPublished
Cited by10 cases

This text of 124 B.R. 283 (E.F. Wonderlic & Associates v. Parma, Inc. (In Re Tandem Enterprises, Ltd.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E.F. Wonderlic & Associates v. Parma, Inc. (In Re Tandem Enterprises, Ltd.), 124 B.R. 283, 1991 Bankr. LEXIS 226, 21 Bankr. Ct. Dec. (CRR) 655, 1991 WL 24986 (Ill. 1991).

Opinion

MEMORANDUM OPINION

SUSAN PIERSON SONDERBY, Bankruptcy Judge.

This matter comes before the Court on the Motion for Summary Judgment, and the Statement of Facts Pursuant to District Court Rule 12(1) in Support of the Motion for Summary Judgment filed by E.F. Won-derlic and Associates (“Wonderlic”), the Rule 12(m) Response to Wonderlic’s Statement filed by Parma, Inc. and Pamjit Sood (“Parma” or the “Defendant”), and Par-ma’s Response to Wonderlic’s Motion for Summary Judgment, and Wonderlic’s Reply to Parma’s Response. 1 For the reasons set forth below, the Court, after considering the pleadings, exhibits, and memoranda filed, hereby declines to consider Wonderlic’s Motion for Summary Judgment because the Removal Application is untimely. Additionally, this Court lacks jurisdiction to rule on Wonderlic’s Motion for Summary Judgment, and therefore remands this cause to the state court for further proceedings. 2

FACTS

This dispute is between two creditors of the Debtor over property leased to the Debtor. The Debtor, however, conveyed this property prior to filing bankruptcy. The creditors now request that the Court determine who is entitled to the property.

On or around December 15, 1983, the Debtor, Tandem Enterprises, Ltd. (“Tandem”), executed an Agreement entitled “Lease Agreement” (“Agreement”) with Deerbart Financial Services, Co. (“Deer-bart”). The Agreement purportedly leased certain equipment to the Debtor. On or *285 around the same day, Deerbart assigned all its interest to Wonderlic, who then purportedly recorded the assignment on December 27, 1983.

Six months later Tandem sold certain assets including those that Wonderlic allegedly owned to Parma, who in turn executed a promissory note payable to Tandem in the amount of $25,497. The sale agreement purports to transfer the assets free and clear of all liens and encumbrances including Wonderlic’s alleged perfected security interest.

On October 21, 1987, four months after the sale to Parma, Tandem filed its Voluntary Petition for relief. The Court lifted the automatic stay on April 22, 1988, at Wonderlic’s request, to allow it to proceed against Parma to recover its assets. Won-derlic filed an Amended Complaint in the Circuit Court of Cook County, Municipal Department, First District, on June 7,1989, against Parma, Inc. d/b/a Illinois Tempo Restaurant and Nerinderpac S. Sood. Just under a year later, Wonderlic filed an Application for Removal and Removal Complaint with the Bankruptcy Court on May 15, 1990. Wonderlic now moves for summary judgment against Parma.

DISCUSSION

Prior to addressing the summary judgment motion, the Court must determine whether this matter is properly before the Court. The Court finds that the Removal Application is untimely and the that the Court lacks jurisdiction to adjudicate the dispute between Tandem’s creditors.

I.THE APPLICATION FOR REMOVAL IS INSUFFICIENT

28 U.S.C. § 1452(a) governs the removal of a state court case to the bankruptcy court. Section 1452 provides:

A party may remove any claim or cause of action in a civil action_to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title, (citations omitted).

A removal application must contain a short and concise statement of the facts supporting removal to the bankruptcy court. Bankruptcy Rule 9027(a)(1). Additionally, all process and pleadings filed in the state court must accompany the application. Id. Once filed the applicant must serve a copy on all parties to the removed claim or cause of action. The removal is immediate and effective upon the filing of a copy of the application in the court from which the action is removed.

The application in this case is insufficient. The applicant, Wonderlic, has failed to attach a copy of all the pleadings filed in the state court. Only the complaint is attached. The summons, answer, orders, and any of the other pleadings filed in state court during the last year are not attached. Therefore, the Court finds that the Removal Application does not comply with Bankruptcy Rule 9027. 3

II. THE APPLICATION FOR REMOVAL IS UNTIMELY

Once a timely request is made in the bankruptcy court and a copy of the removal application is filed in the district court, removal is automatic. In re Watson-Mahaney, Inc., 70 B.R. 578, 580 (Bankr.N.D.Ill.1987). Timeliness of removal, however, is an issue in the present case.

Bankruptcy Rule 9027 governs the removal of cases to the bankruptcy court. Specifically, Section (a) of the Rule identifies the period of time within which an application for removal must be filed. Bankruptcy Rule 9027(a)(3) provides:

(3) Time for Filing; Civil Action Initiated After Commencement of the Case Under the Code. If a case under the Code is pending when a claim or cause of action is asserted in another court, an application for removal may be filed with the clerk only within the shorter of (A) 30 days after receipt, through service or *286 otherwise, or a copy of the initial pleading setting forth the claim or cause of action sought to be removed or (B) 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons, (citations omitted)

In an attempt to comply with the directives of Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), Congress passed the Bankruptcy Amendments and Federal Judgeship Act (“BAFJA”). BAFJA repealed the prior removal statute, § 1478, and replaced it with 28 U.S.C. § 1452. Section 1452 refers to removal of matters to the district court while § 1478 referred to removal of matters to the bankruptcy court. A minority of courts have taken the position that Bankruptcy Rule 9027 no longer governs removal procedures and that courts must look to 28 U.S.C. § 1446(a) and (b) which only permit “a defendant or defendants” to remove a state court proceeding and which require removal applications to be filed within approximately 30 days from service. In re Watson-Mahaney, Inc., 70 B.R. 578, 580-81 (Bankr.N.D.Ill.1987); Allen County Bank & Trust Co. v. Valvmatic International Corp., 51 B.R. 578, 581 (N.D.Ind.1985); State Bank of Lombard v. Chart House Inc., 46 B.R. 468, 473 (N.D.Ill.1985). A majority of courts, however, have upheld the continued validity of Bankruptcy Rule 9027 even after BAFJA. In re Reveo D.S., Inc., 99 B.R. 768, 771-72 (N.D.Ohio 1989);

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124 B.R. 283, 1991 Bankr. LEXIS 226, 21 Bankr. Ct. Dec. (CRR) 655, 1991 WL 24986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ef-wonderlic-associates-v-parma-inc-in-re-tandem-enterprises-ltd-ilnb-1991.