Goodman v. California Portland Cement Co. (In Re GTI Capital Holdings, L.L.C.)

399 B.R. 247, 2008 WL 5451498
CourtUnited States Bankruptcy Court, D. Arizona
DecidedNovember 19, 2008
DocketBankruptcy No. 2:03-bk-07923-SSC. Adversary Nos. 08-ap-00464, 08-ap-00471
StatusPublished
Cited by1 cases

This text of 399 B.R. 247 (Goodman v. California Portland Cement Co. (In Re GTI Capital Holdings, L.L.C.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goodman v. California Portland Cement Co. (In Re GTI Capital Holdings, L.L.C.), 399 B.R. 247, 2008 WL 5451498 (Ark. 2008).

Opinion

MEMORANDUM DECISION

SARAH SHARER CURLEY, Bankruptcy Judge.

I. INTRODUCTION

This matter comes before the Court on a “Notice of Removal” filed with the Court on July 10, 2008 by David M. Reaves, the Chapter 7 Trustee (“Trustee”). The Notice of Removal sought the removal of two “Independent Actionfs] to Vacate State Court Judgments,” (“Independent Actions”) which were filed in the Maricopa County Superior Court (“State Court”). 1 Accordingly, two adversary proceedings were opened on the docket in this Court. 2 The Court set a Scheduling Conference for August 27, 2008. 3

As will be described more fully hereinafter, a number of dispositive motions were soon filed by the Defendants, which was countered with a Motion to Remand, and other relief, by the Plaintiffs. A discovery dispute soon arose which resulted in the filing of a Motion to Compel by the Plaintiffs. After a hearing on the Motion to Compel, this Court concluded that the Motion must be denied and afforded the Defendants the opportunity to seek attorneys’ fees and costs in opposing the Motion to Compel.- Because the Plaintiffs subsequently withdrew the Independent Actions, in both the State and Bankruptcy Courts, the Court set a hearing to determine whether it still had the jurisdiction to award the attorneys’ fees and costs that the Defendants incurred.

After conducting a hearing on the jurisdictional issue on September 29, 2008, taking into consideration the arguments of each of the parties, the documents filed, and the entire record before the Court, the Court has set forth in this decision its findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52, Bankruptcy Rule 7052. As will be set forth more extensively hereinafter, this Court does have the subject matter jurisdiction to hear the issue of sanctions concerning a discovery dispute, and the discovery dispute is a core proceeding. 28 U.S.C. §§ 1334 and 157 (West 2008).

II. FACTUAL BACKGROUND

On May 8, 2003, GTI Capital Holdings, LLC, an Arizona Limited Liability Company dba Rockland Materials, and G.H. Goodman Investment Companies, LLC, an Arizona Limited Liability Company, (the “Debtors”) filed their petitions for relief under Chapter 11 of the Bankruptcy Code.

On January 19, 2007, the Debtors, then represented by Mr. Carmel, commenced *250 an action against Comerica Bank-California (“Comerica”), seeking relief under Section 510 of the Bankruptcy Code. On April 30, 2007, the case was converted to one under Chapter 7, and David M. Reaves (“Trustee”) was appointed the Trustee. 4 The Trustee chose to retain Mr. Carmel as his attorney concerning the Section 510 action. 5 On February 20, 2008, the Debtors’ estate, now represented by the Trustee, and Comerica participated in Mediation before the Honorable Randolph J. Haines, which resulted in a Settlement Agreement whereby Comerica agreed to pay the estate the sum of $950,000. The Settlement Agreement also contained a general release of all claims which the parties then had, or could have asserted, against each other in the Section 510 adversary proceeding. The Debtors’ estate also executed a broad release of liability and stipulated to dismiss any other actions being asserted on behalf of the estate in other proceedings against Comerica. The Court issued an Order approving and incorporating the Settlement Agreement on March 17, 2008.

On or about June 20, 2008, the Plaintiffs simultaneously filed their two identical independent actions (“Independent Actions”) with the Maricopa County Superior Court in Phoenix, Arizona. On July 10, 2008, the Trustee and his counsel filed a “Notice of Removal” to this Court. 6 Based on the usual procedures of this Court, the Independent Actions were assigned adversary proceeding numbers by the Court’s Clerk’s Office. 7 In reviewing the Complaints filed in the Independent Actions, the Court has determined that these Actions related to various other actions or motions filed in the Arizona state courts by Mr. and Ms. Goodman, in their capacity as non-debtor guarantors for various debts incurred by the Debtors. 8 It is unclear why West Highland was joined as a Plaintiff in the Independent Actions.

In the Independent Actions, several dis-positive and other motions were filed as described hereinafter.

A. On July 10, 2008, the Trustee filed a Motion to Dismiss the Complaint. A joinder was filed by Michael Carmel, Ltd. on July 14, 2008;

B. On July 17, 2008, Empire Southwest, LLC and Burch & Cracchiolo, PA filed a Motion to Dismiss the Complaint;

C. On July 18, 2008, Lewis & Roca LLP filed a Motion to Dismiss the Complaint;

D. On July 21, 2008, MWMF and CPCM filed a Motion to Dismiss the Complaint;

E. On July 21, 2008, the Plaintiffs filed a Motion to Remand;

F. On July 23, 2008 the Plaintiffs filed a Motion to Convert Status Hearing to Merits Hearing;

*251 G. On July 25, 2008, a Motion to Dismiss the Complaint was filed by Bombardier Capital, Inc.;

H. On July 25, 2008, a Motion to Consolidate Adversaries No. 08-ap-464 and 08-ap-471 was filed by Bombardier Capital, Inc. in Adversary No. 08-ap-464 only. A joinder was filed by MWMF and CPCM on July 29, 2008, and by Empire Southwest and the Trustee on July 31, 2008;

I. On July 31, 2008, the Plaintiffs filed an Omnibus Response to the Motion(s) to Dismiss/Joinders; Motion to Consolidate; Removal and a Cross-Motion for Judgment as a matter of Law; Summary Judgment; Improvident/Defective Removal.

The Court entered an Order on August 4, 2008 setting oral argument on the Motion to Consolidate the Adversary Proceedings for August 27, 2008. This Order also denied the request of the Plaintiffs that the Bankruptcy Rule 7016 Conference be converted into a hearing on the merits. 9 The August 4 Order allowed for discovery consistent with the Federal Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure. A separate hearing on the Trustee and Trustee’s Counsel’s Motions to Dismiss was set for September 11, 2008. The remaining Motions were set for hearing on September 17, 2008.

According to Mr.

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Bluebook (online)
399 B.R. 247, 2008 WL 5451498, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goodman-v-california-portland-cement-co-in-re-gti-capital-holdings-arb-2008.