Girard v. Michener (In Re Michener)

217 B.R. 263, 39 Collier Bankr. Cas. 2d 745, 1998 Bankr. LEXIS 131, 32 Bankr. Ct. Dec. (CRR) 139
CourtUnited States Bankruptcy Court, D. Minnesota
DecidedFebruary 13, 1998
Docket19-30147
StatusPublished
Cited by6 cases

This text of 217 B.R. 263 (Girard v. Michener (In Re Michener)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Girard v. Michener (In Re Michener), 217 B.R. 263, 39 Collier Bankr. Cas. 2d 745, 1998 Bankr. LEXIS 131, 32 Bankr. Ct. Dec. (CRR) 139 (Minn. 1998).

Opinion

ORDER

DENNIS D. O’BRIEN, Chief Judge.

This matter was heard on December 4, 1997, on motion of Plaintiff for remand of this removed state court proceeding. Appearances are noted in the record. The Court, having heard arguments of counsel, reviewed the pleadings and memoranda, and, being fully advised in the matter, now makes this ORDER pursuant to the Federal and Local Rules of Bankruptcy Procedure.

*266 I

FACTS

This action was originally brought by Plaintiff Minnesota Commissioner of Revenue in state district court against Defendants Micheners, pursuant to Minn.Stat. § 513.44, seeking declaratory judgment setting aside a prepetition transfer of real property by the Defendant Debtor Michael to June as fraudulent. Defendants removed the action here pursuant to 28 U.S.C. § 1452(a). Plaintiff now seeks an order of abstention and remand under 28 U.S.C. § 1334 and 28 U.S.C. § 1452.

On September 11, 1991, Defendants transferred Michael B. Michener’s joint tenancy interest in the homestead of the parties to Defendant June J. Miehener, who thereafter has continuously held sole title to the entire property. Plaintiff alleges that the transfer was without consideration. Five days later, on September 16, Defendant Michael B. Michener filed his delinquent state tax returns for the years 1982 through 1990. On March 5, 1992, the Commissioner of Revenue filed “Notice of State Tax Lien” in the county where the property is located, attaching the real estate with specificity. On July 20,1995, Mr. Miehener filed for relief under 11 U.S.C. Chapter 7. The Commissioner had made no attempt to enforce the alleged lien between filings of the lien and the bankruptcy.

The Chapter 7 trustee became aware of the transfer at the first meeting of creditors, but made no attempt to avoid it under 11 U.S.C. § 544(b) and Minn.Stat. § 513.44. The bankruptcy case was administered as a “no asset” case and was closed on November 28, 1995. The Commissioner was aware of the transfer at bankruptcy filing and had timely notice of the bankruptcy. He made no request that the trustee seek avoidance; nor did the Commissioner seek avoidance in any other manner during pendency of the bankruptcy.

On December 9, 1997, Plaintiff brought this action in state district court, pursuant to Minn.Stat. §§ 513.44 and 513.47, to enforce the claimed lien in the amount of $61,943.29. The complaint alleges that the transfer was “made with actual intent to hinder, delay, or defraud the [Plaintiff].” Complaint, at 3. The complaint also alleges that the bankruptcy discharge, entered on October 24, 1995, did not discharge Michael Miehener from his tax debt to the Plaintiff. The relief requested is limited, however, to a prayer that: the transfer be voided; the title be restored to the Defendants as joint tenants; and, that the Plaintiff be allowed his costs.

The Defendants claim in removal that: the fraudulent transfer action is a “core” bankruptcy proceeding; the Plaintiff has no standing to bring such an action, as the right vested exclusively in the trustee at bankruptcy filing; and, the right of action was extinguished with the lapse of the trustee’s statute of limitations, pursuant to 11 U.S.C. § 546(a), upon the closing of the bankruptcy case. Additionally, they affirmatively plead discharge of the tax liability, and claim that, too, is a “core” bankruptcy proceeding justifying removal.

In seeking remand, the Plaintiff claims that his post-bankruptcy fraudulent transfer action is an integral part of his lien enforcement rights not subsumed by the trustee in the bankruptcy case; and, that determination of discharge of Mr. Michener’s tax liability is not directly implicated in the action. Plaintiff argues that no part of the action is “core” or even “related” to the bankruptcy case; and, that no federal jurisdiction lies in connection with the proceeding.

II

DISCUSSION

A. Jurisdiction, Removal And Remand In General. 1

1. Jurisdiction.

Federal district courts have exclusive jurisdiction over bankruptcy cases and nonexclusive jurisdiction over all proceedings that arise under, or relate to, them. 28 U.S.C. §§ 1334(a) and (b). Bankruptcy cases and proceedings can be referred by the dis *267 trict courts to bankruptcy judges, for hearing and determination or recommendation. Bankruptcy judges collectively are units of the district courts. 28 U.S.C. §§ 151 and 157(a). Bankruptcy judges, who have been referred bankruptcy cases, are empowered to hear and finally determine, subject to appeal, the referred bankruptcy cases and the bankruptcy proceedings arising out of them or in them. Such proceedings are described as “core.” 28 U.S.C. § 157(b)(1) and (2). Bankruptcy judges are empowered to hear and recommend disposition of proceedings which are “related” but not “core” proceedings to a bankruptcy case. 28 U.S.C. § 157(e)(1). 2

The Bankruptcy Code does not define “core” and “related” proceedings. A nonexclusive list of “core” proceedings is found in 28 U.S.C. § 157(b)(2). “Related” proceedings, under, the rule in this Circuit, are those where the determination of the proceedings “could conceivably have any effect on the estate being administered in bankruptcy.” In re Fulda v. St. Paul Bank For Cooperatives, 130 B.R. 967, 974 (Bankr.D.Minn.1991), citing Nat’l City Bank v. Coopers and Lybrand, 802 F.2d 990, 994 (8th Cir.1986) (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984)); In re NWFX, Inc., 881 F.2d 530, 533 (8th Cir.1989); In re Titan Energy, Inc., 837 F.2d 325, 329-30 (8th Cir.1988); In re Dogpatch U.S.A., 810 F.2d 782, 786 (8th Cir.1987); In re John Peterson Motors, Inc., 56 B.R. 588, 591 (Bankr.D.Minn.1986);

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Bluebook (online)
217 B.R. 263, 39 Collier Bankr. Cas. 2d 745, 1998 Bankr. LEXIS 131, 32 Bankr. Ct. Dec. (CRR) 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/girard-v-michener-in-re-michener-mnb-1998.