Ramco Inc. v. Charles Guy Evans & Sons Inc. (In re Charles Evans Trucking Inc.)

595 B.R. 715
CourtUnited States Bankruptcy Court, S.D. Mississippi
DecidedDecember 10, 2018
DocketCASE NO. 18-50885-KMS; ADV. PROC. NO. 18-06031-KMS
StatusPublished
Cited by5 cases

This text of 595 B.R. 715 (Ramco Inc. v. Charles Guy Evans & Sons Inc. (In re Charles Evans Trucking Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ramco Inc. v. Charles Guy Evans & Sons Inc. (In re Charles Evans Trucking Inc.), 595 B.R. 715 (Miss. 2018).

Opinion

Judge Katharine M. Samson, United States Bankruptcy Judge

Before the Court is Plaintiff's Motion for Mandatory Abstention or in the Alternative to Remand (Adv. ECF No. 16)1 and Defendants' Response in opposition (Adv. ECF No. 22). Decisions on abstention and remand are within the bankruptcy *720court's core jurisdiction under 28 U.S.C. § 157(b)(2)(A).

This adversary proceeding was commenced as a state court action ("Lawsuit"), which was removed by Defendants and referred here by the United States District Court for the Southern District of Mississippi. At issue is whether this Court has jurisdiction over the proceedings that constitute the Lawsuit and, if so, whether that jurisdiction should be exercised.

The Lawsuit encompasses proceedings over which the bankruptcy court has jurisdiction and others over which it has no jurisdiction. For the reasons that follow, remand of the entire Lawsuit is proper. The automatic stay is therefore modified to allow the following proceedings to be litigated through entry of a judgment in the state court: the proceeding against Debtor Charles Evans Trucking Inc. and the proceedings against other Defendants to the extent those proceedings implicate property of the bankruptcy estate.

FACTS

The Lawsuit was filed in June 2016 in the Circuit Court of Lamar County, Mississippi. Compl., Adv. ECF No. 2-2 at 1. The following facts are not in dispute and are taken from the record in the adversary proceeding, which includes the state court record, and from the record in the two related bankruptcy cases.

1. To the extent they separately exist, the six corporate Defendants ("Corporations") are Mississippi residents, as are the three individual Defendants ("Individuals") and Plaintiff ("Ramco"). Compl. ¶¶ 1-3, Adv. ECF No. 2-2 at 1-2; Answer ¶¶ 1-3, Adv. ECF No. 4 at 130.
2. The Individuals are shareholders of at least three of the Corporations: Charles Evans & Sons Inc.,2 Dependable Abrasives Inc., and Charles Evans Trucking Inc., all "family-owned small businesses." Pet. Interloc. Appeal at 1, Adv. ECF No. 4 at 3491.
3. Ramco alleges that Defendants owe it a total of $4,588,047.73 for open account purchases of fuel. Compl. ¶¶ 4, 6, Adv. ECF No. 2-2 at 2.
4. The Complaint pleads against the Individuals under an alter ego theory.3 Id. ¶ 9, Adv. ECF No. 2-2 at 3.
5. The Complaint does not plead joint and several liability.
6. Defendant Charles Evans Trucking Inc. ("Evans Trucking") is the debtor in a chapter 7 case that is currently pending, In re Charles Evans Trucking Inc. , Chapter 7 Case No. 18-50885-KMS (Bankr. S.D. Miss. filed May 4, 2018) ("Pending Case").
*7217. Defendant Charles Guy Evans & Sons Inc. was the debtor in another chapter 7 case that has been fully administered and closed, In re Charles Guy Evans & Sons Inc. , Ch. 7 Case No. 18-50886 (Bankr. S.D. Miss. closed Oct. 10, 2018) ("Closed Case").
8. Both cases were filed the day after the Lawsuit was scheduled for court-ordered mediation and only a few days before it was to be tried. See Adv. ECF No. 4 at 3522; No. 16-2 at 2.
9. Three days after the bankruptcy cases were filed, Defendants filed the notice of removal of the Lawsuit. Adv. ECF No. 16-3. Three months later, the district court entered its order of referral. Adv. ECF No. 13. Approximately six weeks later, Ramco filed the Motion for Mandatory Abstention. Adv. ECF No. 16.
10. Schedules in the Closed Case list no assets and only one creditor, Ramco, shown as having a nonpriority unsecured claim of $710,832.13. Closed Case ECF No. 3 at 2, 7. This amount is what Plaintiff asserts that Charles Evans & Sons Inc. ("Debtor in the Closed Case") owes on its account. Adv. ECF No. 2-2 at 5.
11. No claims were filed in the Closed Case.
12. Schedules in the Pending Case list $623,425.00 in assets of "machinery, equipment, and vehicles," shown as collateral securing a claim of Bank of Wiggins in the amount of $475,211.64. Pending Case ECF No. 3 at 1; No. 14 at 2-4; No. 15; No. 39 at 1 ¶ 3. The only other creditor listed is Ramco, shown as having a nonpriority unsecured claim of $3,516,111.01. Pending Case ECF No. 3 at 9; No. 15. This amount is what Ramco asserts that Evans Trucking owes on its accounts. Adv. ECF No. 2-2 at 1.
13. One proof of claim has been filed in the Pending Case: an unsecured nonpriority claim by Ramco for $3,516,111.01. Pending Case Cl. No. 1-1. Evans Trucking has objected to the claim. Pending Case ECF No. 36.
14. The claims bar date in the Pending Case is January 28, 2019. Pending Case ECF No. 38.
15. Ramco does not consent to bankruptcy court jurisdiction, asserting instead its right to a jury trial in state court. Mot. ¶ 24, Adv. ECF No. 16 at 6.
16. If the Lawsuit were tried in the circuit court, a jury would decide whether Defendants owe a debt to Ramco and, if so, the amount of the debt. Order on Mots., Adv. ECF No. 16-2 at 2. If the jury were to find that a debt is owed and the amount of the debt, only then would the court consider whether a jury or bench trial would be held on the question of which Defendant or Defendants were responsible. Id.

CONCLUSIONS OF LAW

Bankruptcy courts have jurisdiction over three kinds of proceedings associated with the administration of the bankruptcy estate: proceedings "arising under" the Bankruptcy Code, "arising in" the bankruptcy case, or "related" to the bankruptcy case. 28 U.S.C. § 1334(b).

"Arising under" and "arising in" proceedings are core. Wood v. Wood (In re Wood) , 825 F.2d 90, 97 (5th Cir. 1987). These proceedings either arise only in *722bankruptcy or they involve a right created by bankruptcy law. Id.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
595 B.R. 715, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ramco-inc-v-charles-guy-evans-sons-inc-in-re-charles-evans-trucking-mssb-2018.