MEMORANDUM OPINION ON REMOVAL OF STATE COURT ACTION
BENJAMIN COHEN, Bankruptcy Judge.
The matters subject to this order are the plaintiffs
Notice of Removal
of its state court action from the Circuit Court of Jefferson County, Alabama to this Court and the debt- or’s
Motion for Remand
of that action to the state court. A hearing on both matters was held on May 20, 1996. Marvin E. Franklin, attorney for the plaintiff, and F. Hilton-Green Tomlinson, attorney for the debtor, appeared. The matters were submitted on oral and written arguments of counsel and undisputed facts.
I. Contentions
The plaintiff contends that- this Court should retain the removed state law litigation because the subject of that action is now represented by a claim before this Court.
The debtor contends that this Court should, for equitable reasons, remand this case to the state court.
II. Issues
The issues are: (1) does this Court have jurisdiction over the removed state law action that is the basis of a claim filed in this case and; (2) if jurisdiction exists should this Court abstain from hearing the action, remand the action or retain the action.
III. Findings of Fact
The facts are not disputed. The debtor summarized them in his brief. The Court adopts the applicable parts of that summary as its findings of fact. Those parts are:
Plaintiff, St. Vincent’s Hospital, filed this action against defendant, Michael D. Norrell, on May 12,1995. Plaintiff has asserted claims due by open account in Count I of the Complaint and for work and labor in Count II of the Complaint. Plaintiff has alleged the defendant failed to pay sums due as a result of medical care St. Vincent’s provided to the defendant. Plaintiff seeks compensatory damages in the amount of $19,675.37, plus interest at the rate of 6% per annum from January 21, 1994 and court costs. Plaintiff did not request a jury trial.
Defendant acting pro se denied the material allegations of the Complaint and filed a Counterclaim. on the grounds of tort of outrage and fraudulent billing. After retaining counsel the defendant filed his First Amended Counterclaim alleging breach of contract in Count I, fraud in Count II, and fraudulent misrepresentation in Count III. The defendant alleges the plaintiff billed him for services never rendered and supplies not received in the course of the defendant’s treatment at St. Vincent’s. Counsel for defendant has prepared Defendant’s Second Amended Counterclaim which will be filed once leave of the Court is granted to proceed with this claim. Defendant seeks compensatory and punitive damages. Defendant has also demanded a jury trial.
On July 11, 1995, the plaintiff filed a motion for sanctions against the defendant alleging the defendant’s counterclaim was filed in bad faith, without substantial justification and that the counterclaim was interposed for delay and harassment. On July 12,1995, the plaintiff filed a Motion to Dismiss the defendant’s counterclaim. On August 8, 1995, the plaintiff filed a Motion for Summary Judgment alleging there exists no genuine issue as to material fact and that the plaintiff was entitled to judgment as a matter of law....
Upon order of the Court all three of the plaintiffs motions described hereinabove were heard by The Honorable Edward L. Ramsey, Jefferson County Circuit Judge on December 1, 1995. Judge Ramsey heard arguments from both parties and stayed ruling on any of the pending motions while granting leave of the Court for the defendant to amend his pleadings and proceed with discovery. Judge Ramsey further ordered the plaintiff to produce
all
of the medical records and billing pertaining to treatment of the defendant within fifteen (15) days. Judge Ramsey scheduled a hearing for January 5, 1996, to make a ruling on these matters....
On or about January 16, 1996, the defendant filed a Chapter 13 Bankruptcy Petition in the United States Bankruptcy Court in the Northern District of Alabama. Upon filing of the defendant’s (debtor’s) Petition the previously discussed state civil action was stayed. Plaintiff, St. Vincent’s Hospital, filed a claim in the Chapter 13 case to which the defendant (debtor) has filed an objection. St. Vincent’s Hospital has now filed a Notice of Removal of the state court action under 28 U.S.C. § 1452. On May 3, 1996 the defendant (debtor) filed a motion to remand the state court proceeding back to-state court.
Although the defendant intends to file a Motion for Extension of Discovery the initial discovery deadline based on the standard track assignment required discovery to be completed by February 7,1996.
Debtor’s Brief, Proceeding No. 5, at 1-4 (May 17,1996) (captions omitted).
The plaintiff stresses that it has already filed a claim in this case for $21,736.31 and that the debtor has filed an objection to that claim.
Plaintiffs Brief, Proceeding No. 6, at 1 (May 17, 1996).
IY. Conclusions of Law
In every “removed” action there are four probable issues. The threshold issue is whether the “removal” was proper. If it was, there are three additional issues. These are: (1) should the receiving court abstain from hearing the matter; (2) should the receiving court remand the matter; or (3) should the receiving court retain the matter. Case facts dictate whether any or all of these three options should be considered, but in every case the first inquiry is whether the action was properly removed.
A. Notice of Removal
1. Removal
Pursuant to 28 U.S.C. § 1452(a), a party may remove a claim or cause of action in a civil action to the district court for the district where the civil action is pending, if the district court has jurisdiction over the claim or cause of action under 28 U.S.C. § 1334.
To determine whether removal was proper the court must determine whether jurisdiction exists under 28 U.S.C. § 1334.
2. Jurisdiction
a. Substance
Subsection 1334(a) of that section confers on district courts
original and exclusive
jurisdiction over
all cases
filed under the Bankruptcy Code; subsection 1334(b) confers
original but not exclusive
jurisdiction of
all civil proceedings
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MEMORANDUM OPINION ON REMOVAL OF STATE COURT ACTION
BENJAMIN COHEN, Bankruptcy Judge.
The matters subject to this order are the plaintiffs
Notice of Removal
of its state court action from the Circuit Court of Jefferson County, Alabama to this Court and the debt- or’s
Motion for Remand
of that action to the state court. A hearing on both matters was held on May 20, 1996. Marvin E. Franklin, attorney for the plaintiff, and F. Hilton-Green Tomlinson, attorney for the debtor, appeared. The matters were submitted on oral and written arguments of counsel and undisputed facts.
I. Contentions
The plaintiff contends that- this Court should retain the removed state law litigation because the subject of that action is now represented by a claim before this Court.
The debtor contends that this Court should, for equitable reasons, remand this case to the state court.
II. Issues
The issues are: (1) does this Court have jurisdiction over the removed state law action that is the basis of a claim filed in this case and; (2) if jurisdiction exists should this Court abstain from hearing the action, remand the action or retain the action.
III. Findings of Fact
The facts are not disputed. The debtor summarized them in his brief. The Court adopts the applicable parts of that summary as its findings of fact. Those parts are:
Plaintiff, St. Vincent’s Hospital, filed this action against defendant, Michael D. Norrell, on May 12,1995. Plaintiff has asserted claims due by open account in Count I of the Complaint and for work and labor in Count II of the Complaint. Plaintiff has alleged the defendant failed to pay sums due as a result of medical care St. Vincent’s provided to the defendant. Plaintiff seeks compensatory damages in the amount of $19,675.37, plus interest at the rate of 6% per annum from January 21, 1994 and court costs. Plaintiff did not request a jury trial.
Defendant acting pro se denied the material allegations of the Complaint and filed a Counterclaim. on the grounds of tort of outrage and fraudulent billing. After retaining counsel the defendant filed his First Amended Counterclaim alleging breach of contract in Count I, fraud in Count II, and fraudulent misrepresentation in Count III. The defendant alleges the plaintiff billed him for services never rendered and supplies not received in the course of the defendant’s treatment at St. Vincent’s. Counsel for defendant has prepared Defendant’s Second Amended Counterclaim which will be filed once leave of the Court is granted to proceed with this claim. Defendant seeks compensatory and punitive damages. Defendant has also demanded a jury trial.
On July 11, 1995, the plaintiff filed a motion for sanctions against the defendant alleging the defendant’s counterclaim was filed in bad faith, without substantial justification and that the counterclaim was interposed for delay and harassment. On July 12,1995, the plaintiff filed a Motion to Dismiss the defendant’s counterclaim. On August 8, 1995, the plaintiff filed a Motion for Summary Judgment alleging there exists no genuine issue as to material fact and that the plaintiff was entitled to judgment as a matter of law....
Upon order of the Court all three of the plaintiffs motions described hereinabove were heard by The Honorable Edward L. Ramsey, Jefferson County Circuit Judge on December 1, 1995. Judge Ramsey heard arguments from both parties and stayed ruling on any of the pending motions while granting leave of the Court for the defendant to amend his pleadings and proceed with discovery. Judge Ramsey further ordered the plaintiff to produce
all
of the medical records and billing pertaining to treatment of the defendant within fifteen (15) days. Judge Ramsey scheduled a hearing for January 5, 1996, to make a ruling on these matters....
On or about January 16, 1996, the defendant filed a Chapter 13 Bankruptcy Petition in the United States Bankruptcy Court in the Northern District of Alabama. Upon filing of the defendant’s (debtor’s) Petition the previously discussed state civil action was stayed. Plaintiff, St. Vincent’s Hospital, filed a claim in the Chapter 13 case to which the defendant (debtor) has filed an objection. St. Vincent’s Hospital has now filed a Notice of Removal of the state court action under 28 U.S.C. § 1452. On May 3, 1996 the defendant (debtor) filed a motion to remand the state court proceeding back to-state court.
Although the defendant intends to file a Motion for Extension of Discovery the initial discovery deadline based on the standard track assignment required discovery to be completed by February 7,1996.
Debtor’s Brief, Proceeding No. 5, at 1-4 (May 17,1996) (captions omitted).
The plaintiff stresses that it has already filed a claim in this case for $21,736.31 and that the debtor has filed an objection to that claim.
Plaintiffs Brief, Proceeding No. 6, at 1 (May 17, 1996).
IY. Conclusions of Law
In every “removed” action there are four probable issues. The threshold issue is whether the “removal” was proper. If it was, there are three additional issues. These are: (1) should the receiving court abstain from hearing the matter; (2) should the receiving court remand the matter; or (3) should the receiving court retain the matter. Case facts dictate whether any or all of these three options should be considered, but in every case the first inquiry is whether the action was properly removed.
A. Notice of Removal
1. Removal
Pursuant to 28 U.S.C. § 1452(a), a party may remove a claim or cause of action in a civil action to the district court for the district where the civil action is pending, if the district court has jurisdiction over the claim or cause of action under 28 U.S.C. § 1334.
To determine whether removal was proper the court must determine whether jurisdiction exists under 28 U.S.C. § 1334.
2. Jurisdiction
a. Substance
Subsection 1334(a) of that section confers on district courts
original and exclusive
jurisdiction over
all cases
filed under the Bankruptcy Code; subsection 1334(b) confers
original but not exclusive
jurisdiction of
all civil proceedings
arising under the Bankruptcy Code, or arising in or related to cases under the Bankruptcy Code; and, subsection 1334(d) confers exclusive jurisdiction over all property of the debtor, wherever located, and of property of the bankruptcy estate in all cases filed under the Bankruptcy Code.
The particular subsection applicable to the instant matter is subsection 1334(b) conferring original but not exclusive jurisdiction of all civil proceedings arising under title 11, or
arising in or related to cases under title 11. 28 U.S.C. § 1334(b). In order for this Court to have jurisdiction over this action, the action must be:
(1) one that arises under the Bankruptcy Code;
(2) one that arises in a case filed under the Bankruptcy Code; or,
(3) one that is related to a case filed under the Bankruptcy Code.
(1)Arising Under the Bankruptcy Code
A civil proceeding that arises under the Bankruptcy Code is one that is created by or determined by a provision of the Bankruptcy Code.
In re Wood,
825 F.2d 90, 96 (5th Cir.1987). Examples include preference or lien avoidance actions, claims of exemptions under 11 U.S.C. § 522, claims of discrimination under 11 U.S.C. § 525 and trustees’ avoidance actions under 11 U.S.C. §§ 544
et al. Case Management Manual For United States Bankruptcy Judges,
Federal Judicial Center, 1995 with case annotations at 11.
(2) Arising In a Case Filed Under the Bankruptcy Code
A civil proceeding arising in a case under the Bankruptcy Code is a proceeding that, although not arising under the Bankruptcy Code, is one that would not exist outside of bankruptcy.
In re Wood,
825 F.2d 90, 97 (5th Cir.1987). Examples include filing proofs of claim, filing complaints to determine dischargeability, administrative matters, counterclaims by the estate against claims, requests to turn over property, determinations of validity, extent or priority of liens, allowance or disallowance of claims, motions to obtain credit, complaints to object to discharge, and plan confirmation'hearings.
Case Management Manual For United States Bankruptcy Judges,
Federal Judicial Center, 1995 with case annotations at 12.
(3) Related to a Case Filed Under the Bankruptcy Code
A civil proceeding that is related to a case filed under the Bankruptcy Code is a proceeding that could conceivably have an effect on the estate being administered in bankruptcy.
In the Matter of Lemco Gypsum, Inc.,
910 F.2d 784, 788 (11th Cir.1990). Examples include proceedings that could have been brought in district or state court absent bankruptcy, causes of action that became property of the estate and suits between third parties that affect estates.
Case Management Manual For United States Bankruptcy Judges,
Federal Judicial Center, 1995 with case annotations at 11-12.
b. Procedure
(1) No Jurisdiction
If the court determines that it does not have jurisdiction over the cause of action under section 1334, a retroactive determination must be made that the cause of action was not subject to removal under section 1452(a). The action then is “remanded” to its original court.
In re Baltic Assocs.,
149 B.R. 93, 95 (Bankr.E.D.Pa.1993).
See also In re Fisher,
151 B.R. 895, 897 (Bankr. N.D.Ill.1993) (bankruptcy court did not have jurisdiction over non-debtor class members’ state law claims).
(2) Jurisdiction
If the court determines that there is jurisdiction the court may (1) abstain from hearing the action which in effect sends the action back to its original court, (2) may remand the action directly to its original court or (3) retain the action.
Applying the above criteria to the instant case this Court finds that removal of the state court action was proper. Jurisdiction exists under 28 U.S.C. § 1334(b). The removed proceeding involves the allowance or disallowance of a claim against the estate and a counterclaim by the debtor against an entity which filed a claim against the estate. Matters involving the allowance and disallowance of claims against the estate are core proceedings by-virtue of 28 U.S.C. § 157(b)(2)(B). Counterclaims by the estate against persons filing claims against the estate are core proceedings by virtue of 28
U.S.C. § 157(b)(2)(C). This matter is, therefore, a core proceeding arising in a case under title ll.
Consequently jurisdiction exists in this Court.
B. Properly Removed Case
Having made the determination that the proceeding before the Court was properly removed, this Court may abstain from hearing the matter, remand the matter or may retain the matter.
1. Abstention
a. Discretionary Abstention
Discretionary abstention is governed by 28 U.S.C. § 1334(c)(1).
A bankruptcy court may abstain from hearing a proceeding arising under title 11, or arising in or related to cases under title 11, when to do so is in the interest of justice, or in the interest of comity with state courts or respect for state law.
Factors to consider in determining whether discretionary abstention is appropriate include:
(1)the effect of abstention on the efficient administration of the bankruptcy estate;
(2) the extent to which state law issues predominate over bankruptcy issues;
(3) the difficulty or unsettled nature of the applicable law;
(4) the presence of a related proceeding commenced in state court or other non-bankruptcy court;
(5) the basis of bankruptcy jurisdiction, if any, other than 28 U.S.C. § 1334;
(6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case;
(7) the substance rather than form of an asserted “core” proceeding;
(8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court;
(9) the burden of the bankruptcy court’s docket;
(10)the likelihood that the commencement of the proceeding in bankruptcy court
involves forum shopping by one of the parties;
(11) the existence of a right to a jury trial; and
(12) the presence in the proceeding of non-debtor parties.
In re Tucson Estates, Inc.,
912 F.2d 1162, 1167 (9th Cir.1990) (citing
In re Republic Reader’s Serv., Inc.,
81 B.R. 422, 429 (Bankr. S.D.Tex.1987)).
Applying the criteria listed above to the facts of this case, the Court finds that the matters underlying the creditor’s claim and the debtor’s objection should be decided by the state court. This Court finds:
(1) Adjudication of the plaintiffs claim and the debtor’s counterclaim in any forum will necessarily delay distribution to the plaintiff of funds paid by the debtor to the Chapter 13 Trustee. However, since the case was pending in the state court for approximately 8 months prior to the filing of the debt- or’s Chapter 13 petition, the state court should be in a better position to insure the timely adjudication of the case than this Court, which would basically be forced to start trial preparation from scratch. Tidal of the case in state court, as opposed to the bankruptcy court, will not impede the administration of the debtor’s bankruptcy case, but instead, may facilitate the administration of the bankruptcy case.
(2) State law issues are heavily predominate over bankruptcy issues.
(3) There is no unsettled nature over the applicable law.
(4) The case was pending in the state court for approximately 8 months pri- or to the filing of the debtor’s Chapter 13 petition. A summary judgment motion was filed by the plaintiff and heard by the state court judge, who deferred ruling on the motion pending the completion of the debtor’s discovery. The state court judge is familiar with the parties’ respective factual allegations, the issues involved in the case and the state law relating to those issues.
(5) There is no basis of jurisdiction other than 28 U.S.C. § 1334.
(6) “[A] chief purpose of the bankruptcy laws is to secure a prompt and effectual administration and settlement of the estate of all bankrupts within a limited period.”
Katchen v. Landy,
382 U.S. 323, 329, 86 S.Ct. 467, 472, 15 L.Ed.2d 391 (1966). The summary disposition of claims, and counterclaims to those claims, by the bankruptcy court pursuant to 28 U.S.C. §§ 157(b)(2)(B) and (C), is integral to the prompt and relatively inexpensive administration of bankruptcy estates.
Id.
However, where, as in this case, the bankruptcy court is in no better posture to provide a prompt resolution of the claim and counterclaim and resolution of the claim and counterclaim may be accomplished more quickly and inexpensively by trial before a state court jury, this Court may, by remand or abstention or relief from the stay, allow adjudication of the claim and counterclaim in the state court.
See Smith v. Tricare Rehabilitation Systems, Inc. (In re Tricare Rehabilitation Systems, Inc.),
181 B.R. 569, 572 (Bankr.N.D.Ala. 1994).
(7) The
substance
of the “core” proceeding, that is the objection to claim, is a state law cause of action, only the
form
of the “core” proceeding is a bankruptcy law proceeding. Once the-state court determines liability for the claim and the amount of damages if the debtor is liable, this Court’s function becomes ministerial.
(8) There is no difficulty in severing the state law claim from the core bankruptcy matter to allow a judgment to be entered in state court with enforcement in the bankruptcy court.
(9) While this Court is unable to determine the effect of a trial of this matter on the state court, this Court is able to determine that a trial of this matter in the bankruptcy court could burden the bankruptcy court’s docket.
(10) If this Court were to retain and try this matter, the plaintiff will have effectively prevented the debtor’s exer-cise of his right to a jury trial before a state court.
(11) There is the existence of a right to a jury trial in state court.
(12) Other than the claimant, there are no non-debtor parties.
The state court should hear all matters associated with the removed proceeding.
After the plaintiff’s claim is liquidated, this Court will enter an order on the debtor’s objection to that claim. Unless there are issues that this Court is unaware, an order on the objection should be ministerial in nature and should require only minimal participation by the parties and the Court.
b. Mandatory Abstention
Mandatory abstention is governed by 28 U.S.C. § 1334(c)(2). A bankruptcy court must abstain from hearing a civil proceeding if: (1) a timely motion to abstain is made by a party to the proceeding; (2)the proceeding is based on a state law claim or state law cause of action; (3) the proceeding is related to a ease under title 11 but did not arise under title 11 or in a case under title 11; (4) the proceeding could not have been commenced in a court of the United States absent jurisdiction under section 1334; and, (5) the proceeding is commenced, and can be timely adjudicated, in a state forum of appropriate jurisdiction.
Unlike the statutory provision that controls discretionary abstention, which allows a court to consider discretionary abstention on the court’s motion, the comparable provision controlling mandatory abstention requires a motion by one of the parties before that issue is properly before the Court. No motion to abstain was filed in this matter; consequently, this Court may not consider mandatory abstention.
2. Remand
The bankruptcy court may remand a ease on any equitable ground. 28 U.S.C. § 1452(b). Equitable grounds sufficient for remand include:
(1)
forum non conveniens;
(2) that the entire action of a bifurcated matter should be tried in the same court;
(3) that a state court is better able to resolve state law questions;
(4) expertise of a particular court;
(5) judicial economy;
(6) prejudice to the involuntarily removed party;
(7) comity; and
(8) the lessened possibility of an inconsistent result.
Browning v. Navarro,
743 F.2d 1069,1076 n. 21 (5th Cir.1984) (construing the first sentence of repealed 28 U.S.C. § 1478(b), a sentence identical to section 1452(b)).
Sections 1452(b) [remand] and 1334(c) [abstention] of Title 28 of the United States Code are kindred statutes. Section 1452(b) favors comity and the resolution of state law questions by state courts, as does section 1334(e)(1).
Section 1334(c) encourages, and in certain cases, requires “federal courts to allow state courts to hear state law
matters when the only basis for federal jurisdiction is § 1334(b).”
Thomasson v. AmSouth Bank,
59 B.R. 997, 1002 (N.D.Ala. 1986). “Section 1334(c) expresses a strong congressional desire that in respect to non-core proceedings the federal courts should not rush to usurp the traditional precincts of the state courts.”
Cook v. Griffin,
102 B.R. 875, 877 (N.D.Ga.1989). Together, sections 1452(b) and 1334(c) strongly evince a congressional policy that, absent countervailing circumstance, the trial of state law created issues and rights should be allowed to proceed in state court, at least where there is no basis for federal jurisdiction independent of section 1334(b) and the litigation can be timely completed in state court. Because the statutes axe similar in purpose and spirit, circumstances which weigh in favor of discretionary abstention or dictate mandatory abstention under the respective subsections of section 1334(c), likewise weigh in favor of or constrain remand under section 1452(c).
The presence of factors suggesting discretionary abstention pursuant to 1334(c)(1) and factors requiring mandatory abstention under 1334(c)(2) provides ample equitable grounds for remand of a lawsuit to state court. “[T]he considerations underlying discretionary abstention and remand are the same.”
Borne v. New Orleans Health Care, Inc.,
116 B.R. 487, 494 (E.D.La.1990). “[I]t is clear that the provisions for mandatory abstention are strong factors suggesting equitable remand under § 1452(b).”
Cook v. Griffin,
102 B.R. at 877. The presence of facts supporting abstention, when coupled with related considerations of comity and preference for the resolution of state law questions by state courts, implied in section 1452(b), “tips the scales of equity in favor of remand____”
Thomasson v. AmSouth Bank,
59 B.R. at 1002.
For the reasons expressed above in connection with the Court’s decision to abstain from hearing this matter, this Court finds that the removed matter is due to be remanded pursuant to 28 U.S.C. § 1452(b). In addition, in considering the separate and particular factors most courts address in relation to remand this Court finds that;
(1) the state court and the federal court forums are equally convenient;
(2) since only one plaintiff and one defendant are involved, the action will not be bifurcated regardless of which court it is tried in;
(3) that the state court is better able to resolve state law questions of this nature;
(4) that the state court has the particular expertise to decide the issue of this matter;
(5) judicial economy will be served if all issues, save the ministerial function of this Court in administering the claim, were tried in the state court, which is currently in the best posture to provide a prompt resolution of those issues;
(6) prejudice to the debtor’s right to a jury trial would be removed;
(7) this Court should extend the courtesy to the state court of interpreting its own laws; and
(8) since only one plaintiff and one defendant are involved, no possibility of inconsistent results is present as long as the objection to claim and counterclaim are tried in the same court.
3. Retain the Removed Action
Having made the determinations that this Court should abstain from deciding the substantive issues of the removed complaint and that the removed cause of action should be remanded to the court from which it was removed, this Court will, obviously, not retain the removed action.
V. Conclusion
Based on the above, the Court finds that jurisdiction over this matter exists but that discretionary abstention should be invoked and that the matter should be remanded to the state court. A separate order will be entered in accordance with this memorandum opinion.