Kingsley, In re

• Court: District Court, D. New Hampshire
• Decided: June 9, 1998
• Docket: CV-98-347-SD
• Status: Published

Opinion

Kingsley, In re CV-98-347-SD 06/09/98 UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

In re: Douglas R. Kingsley

Civil No. 98-347-SD

O R D E R

This matter comes before the court on a Report &

Recommendation (R&R) of the bankruptcy judge. The R&R was

triggered by a motion of the Chapter 7 Trustee to withdraw a

reference of a motion to compromise claims of certain creditors.1

No objection was filed in the bankruptcy court to the motion

to withdraw the reference. Additionally, no objection has been

filed in this court to the R&R of the bankruptcy judge.

1. Background

The relevant creditors, Brenda Y. Connor, Patrick S. Connor,

Melanie F. Connor, James A. Connor, and Doreen F. Connor

(hereinafter "Creditors Connor"), have filed proofs of claim for

breach of contract and unliquidated personal injuries of alleged

^Although bankruptcy courts lack jurisdiction to hear a motion for withdrawal of reference, see 28 U.S.C. § 157(d), it is not uncommon for them to make recommendations to the district court as to whether this should be done. Matter of Vicars Ins. Agency, Inc., 96 F.3d 949, 954 (7th Cir. 1996). intentional and negligent infliction of emotional distress and

outrage for alleged pre-petition acts by the debtor. The

bankruptcy judge granted the trustee's motion to intervene as

party-plaintiff in place of the debtor, and also approved the

trustee's stipulation to settle Brenda Y. Connor's claim for

breach of contract.

Subsequently, the trustee and the remaining Creditors Connor

filed a joint stipulation to approve the pending claims of such

creditors.2 The debtor objected and filed a motion to intervene,

to which the trustee and Doreen F. Connor objected. Thereafter,

the Creditors Connor moved for a protective order and an order of

disclosure pursuant to 5 U.S.C. § 552a(b) (ll),3 and the debtor

objected.

2It appears that Brenda Y. Connor and debtor had entered into a purchase & sale agreement for the sale of certain property in Henniker, New Hampshire. When debtor failed to perform under the terms thereof, Brenda Y. Connor obtained a judgment for specific performance from the Merrimack County Superior Court. Thereafter, that court issued orders for payment of consequential damages, and attachments of debtor's property were also issued. Following the state court proceedings, certain letters containing death threats were sent to the Creditors Connor, and Doreen Connor was the victim of libelous sexual letters which were given a wide distribution. Believing that these documents were the work of debtor, the Creditors Connor filed proofs of claim in this bankruptcy proceeding, and eventually sought compromise of their claims with the trustee.

35 U.S.C. § 552a(b)(11) governs disclosure of records kept by governmental agencies and provides for disclosure thereof "pursuant to the order of a court of competent jurisdiction." 2 The bankruptcy judge ordered the trustee to file a motion to

withdraw the reference by this court concerning the motion to

approve compromise and all related motions. As above indicated,

that was done, and the bankruptcy court then issued its R&R in

which the recommendation was made that the court approve

withdrawal of such reference.

2. Discussion

The relevant provisions of the Bankruptcy Code except from

the definition of "core proceedings" "the liquidation or

estimation of contingent or unliquidated personal injury tort or

wrongful death claims against the estate." 28 U.S.C. §

157(b) (2) (B) . See also 28 U.S.C. § 157(b) (2) (0) .4 Accordingly,

the statute further provides that "the district court shall order

that personal injury tort and wrongful death claims shall be

tried in the district court in which the bankruptcy case is

pending, or in the district court in the district in which the

claim arose, as determined by the district court in which the

bankruptcy case is pending." 28 U.S.C. § 157(b)(5).

Under 28 U.S.C. § 157(d), a "district court may withdraw

. . . any case or proceeding referred [to the bankruptcy court]

428 U.S.C. § 157(b)(2)(0) also excepts from the catch-all provisions of "core proceedings" "personal injury tort or wrongful death claims." 3 on its own motion or on a timely motion of any party, for cause

shown." In evaluating whether cause exists for withdrawal, the

court must first determine whether the matter before it is core

or non-core. Following this determination, the court examines

numerous factors, including whether withdrawal will (1) promote

uniformity of bankruptcy administration; (2) reduce forum

shopping and confusion; (3) foster the economical use of debtors'

and creditors' resources; and (4) expedite the bankruptcy

process; and (5) whether a right to jury trial, triable only in

the district court, exists. 9 C o l l i e r 's o n B a n k r u p t c y §

5011.01[1][b] at 5011-6, 7 (15th ed. rev. Matthew Bender 1997);

In re Burger Boys, Inc., 94 F.3d 755, 762 (2d Cir. 1996); In re

Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993), cert,

dismissed, 511 U.S. 1026 (1994). Generally, however, if there is

a right to jury trial, but the parties do not consent to jury

trial before the bankruptcy court, cause exists. C o l l i e r 's , supra

at 5011-7.

Clearly, the unliquidated claims of the Creditors Connor

here are claims for personal injury tort, which are claims that

should be tried before a jury.5 Accordingly, the R&R must be and

5Emotional distress, whether intentionally or negligently caused, falls within the definition of "personal injury tort" of 28 U.S.C. § 157(b)(5). In re Thomas, 211 B.R. 838, 840-41 (Bankr. D.S.C. 1997). 4 is herewith accepted, and the referral is withdrawn from the

bankruptcy proceedings concerning the unliquidated claims of

Creditors Connor.

The court judicially notes that the Creditors Connor have

now filed a separate complaint as against the trustee and debtor,

which complaint seeks recovery of the damages initially sought in

these bankruptcy proceedings. See 98-285-JD, Connor, et al v.

Schreiber, et a l . The filing of this latter proceeding renders

moot any further action by this court on the pending motions and

objections in these bankruptcy proceedings, which include the

debtor's objection to proof of claim (file no. 57);6 Creditors

Connor's Motion for Order of Disclosure to the United States

Pursuant to 5 U.S.C. § 552a(b)(11) (file no. 121); Joint Motion

of Trustee and Creditors Connor to Approve Stipulation [with

Exhibit A] (file no. 107); Motion of Creditors Connor for Filing

of a Protective Order (file no. 120); and Debtor's Motion to

Intervene Relative to the Claims of Creditors Connor (file no.

113) .

This ruling of mootness is without prejudice to the rights

of the respective parties in Civ. No. 98-285-JD to file such

relevant requests for relief as they deem necessary in support of

6The reference to the term "file no." is to the number given the relevant document in the bankruptcy court. 5 their respective positions in that litigation. The clerk of this

court shall enter judgment in the instant civil action in

accordance with the findings of this order.

SO ORDERED.

Shane Devine, Senior Judge United States District Court June 9, 1998 cc: Victor W. Dahar, Jr., Esq. Randall L. Pratt, Esq. George Vannah, Clerk, US Bankr. Ct.