In Re Meagher

384 B.R. 454, 2008 WL 548804
CourtUnited States Bankruptcy Court, N.D. Texas
DecidedFebruary 26, 2008
Docket19-30354
StatusPublished

This text of 384 B.R. 454 (In Re Meagher) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Meagher, 384 B.R. 454, 2008 WL 548804 (Tex. 2008).

Opinion

384 B.R. 454 (2008)

In re Todd Andrew MEAGHER and Irene Alexis Meagher, Debtors.
Todd Andrew Meagher, Plaintiff,
v.
Josh Todd, Defendant.

Bankruptcy No. 05-49745-DML-7. Adversary No. 07-04162-DML-7.

United States Bankruptcy Court, N.D. Texas, Fort Worth Division.

February 26, 2008.

*456 John Saitis, Law Offices of John Saitis, PLLC, Fort Worth, TX, for Plaintiff.

Michael D. Warner, Warner, Stevens, L.L.P., Fort Worth, TX, Sherry Anne Lear, Torrance, CA, for Defendant.

MEMORANDUM OPINION

D. MICHAEL LYNN, Bankruptcy Judge.

Before the court is the Motion of Josh Todd ("Todd" or "Defendant") seeking dismissal pursuant to FED. R. BANKRP. 7012, incorporating FED.R.CIV.P. 12(b)(6), of the above-styled adversary proceeding. The court initially heard argument on the Motion on January 31, 2008. After affording the parties an opportunity to resolve the Motion without a decision by the court, the court heard further argument on February 6, 2008.[1]

This matter is within the court's core jurisdiction. 28 U.S.C. §§ 1334 and 157(b)(2) (2008). This memorandum opinion embodies the court's findings and conclusions. FED. R. BANKR.P. 7052.

I. Background

Plaintiff Meagher ("Meagher" or "Plaintiff) and Defendant have a considerable history of dealings. Todd is a musician who earns his living by performing before live audiences and producing recordings. In 2003, Todd and Meagher agreed to form a limited liability company, Todd Entertainment, LLC ("TEC"), equally owned by the two, through which Meagher, as managing member of TEC, would manage Todd's business in accordance with an operating agreement dated June 23, 2003 (the "Agreement"). Other than managing Todd's career, the court has been made aware of no business done or assets owned by TEC.

The Todd-Meagher relationship proved not to be a happy one. Following a series of disputes, in 2004 Todd commenced a suit against Meagher and TEC in state court in California (the "State Court Action"). Meagher's petition for relief under chapter 7 of the Bankruptcy Code (the "Code"[2]) soon followed.

Upon the filing of his bankruptcy Meagher's interest in TEC became property of his estate pursuant to Code § 541(a)(1). Whether to obtain tactical advantage or as a precaution against the future, Todd in 2006 offered to purchase from Meagher's chapter 7 trustee the estate's interest in TEC. However, with the court's indulgence, the chapter 7 trustee, perceiving the discharged debtor's money as green as that of Todd, accepted instead a higher bid from Meagher of $65,000. Thus, Meagher recovered his ownership interest in TEC — at a substantial consideration given the apparent lack of value in the corporation.

The next step in the drama was Todd's. Amending his complaint in the State Court Action, he sought to enforce the Agreement against TEC and Meagher and asserted *457 against TEC causes of action arising before and since Meagher's chapter 7 filing as well as causes directed at. Meagher for actions taken since the filing of his petition. All of the causes of action pled by Todd run to the relationship among Todd, Meagher and TEC.[3]

Next, Meagher purported to remove the State Court Action by filing removal papers in this court. As removal must be to the district in which the removed action is pending (here the Central District of California), the court determined Meagher's attempted removal to be ineffective. See 28 U.S.C. § 1452; FED. R. BANKRP. 9027.

This led to the filing of the instant adversary proceeding, by which Plaintiff seeks enforcement of his discharge and the levy of sanctions against Todd for violating the discharge injunction by pursuing the State Court Action. Plaintiff asserts that Todd, in the State Court Action, is pursuing claims that were discharged in his chapter 7 case. Pointing to language contained in his amended complaint,[4] Defendant insists he has given due deference to Meagher's discharge and is seeking damages only for Meagher's post-petition conduct — which, he argues, does not give rise to claims that could have been discharged.[5] Defendant therefore urges that Plaintiffs suit to enforce the discharge be dismissed.

II. Discussion

A. Standard for Dismissal

The "court accepts `all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'" Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir.2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.1999)). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 1965. In ruling on such a motion, the court cannot look *458 beyond the pleadings. Id,; Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.1999), cert. denied, 530 U.S. 1229, 120 S.Ct. 2659, 147 L.Ed.2d 274 (2000). The pleadings include the complaint and any documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.2000). Likewise, "`[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiffs complaint and are central to [the plaintiffs] claims.'" Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993)).[6]

Dismissal is not only appropriate if no relief-worthy claim has been stated. It also is the means a court uses to dispose of litigation wrongfully pursued. See Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir.2007); 5B CHARLES ALLEN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE & PROCEDURE § 1357 (3d ed.2004). This court has previously dismissed a complaint by a debtor in possession in which recharacterization of a lease was sought. See Mirant Mid-Atlantic, LLC v. Morgantown OLl LLC (In re Mirant Corp.) 327 B.R. 262 (Bankr.N.D.Tex. 2005). There the suit did not advance the goals and purposes of the Code, and so the debtor's claims were dismissed without prejudice to their later assertion should the facts change. Id. at 268-69.

B. Does Todd's Pursuit of the State Court Action Violate Meagher's Discharge Injunction?

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Related

Spivey v. Robertson
197 F.3d 772 (Fifth Circuit, 1999)
Collins v. Morgan Stanley Dean Witter
224 F.3d 496 (Fifth Circuit, 2000)
Scanlan v. Texas A&M University
343 F.3d 533 (Fifth Circuit, 2003)
Ferrer v. Chevron Corp.
484 F.3d 776 (Fifth Circuit, 2007)
Bell Atlantic Corp. v. Twombly
550 U.S. 544 (Supreme Court, 2007)
In Re Mirant Corp.
314 B.R. 347 (N.D. Texas, 2004)
McHenry v. Key Bank (In Re McHenry)
179 B.R. 165 (Ninth Circuit, 1995)

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Bluebook (online)
384 B.R. 454, 2008 WL 548804, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-meagher-txnb-2008.