407 B.R. 316 (Bkrtcy.N.D.Ill. 2009), 09 B 5868, In re Sharif
|Docket Nº:||Bankruptcy 09 B 5868.|
|Citation:||407 B.R. 316|
|Opinion Judge:||JACQUELINE P. COX, Bankruptcy Judge.|
|Party Name:||In re Richard SHARIF, Debtor. v. J.P. Morgan Chase Bank, N.A., Defendant. Wellness International Network, et al., Plaintiff, Dr. Waqar Khan, Shafqut Khan, Dr. Abdul Rashid, and Shaheen Rashid, Plaintiff, v. Wellness International, Network, et al., Defendant. Adversary Nos. 09 A 00384, 09 A 00385.|
|Attorney:||L. Judson Todhunter of Defrees & Fiske, William J. Stevens, Lakeside, MI, for Debtor. Michael J. Lang of Gruber Hurst Johansen & Hail LLP, Dallas, TX, Gina B. Krol of Cohen & Krol, for Wellness International Network, Ltd. Garrett S. Reidy, Attorney for Waqar Khan, Safqut Khan, Abdul Rashid, and S...|
|Case Date:||July 02, 2009|
|Court:||United States Bankruptcy Courts, Seventh Circuit|
Notices of removal were filed for removal of pending garnishment and collection actions to bankruptcy court, and plaintiff moved to dismiss or, in alternative, for remand. The Bankruptcy Court, Jacqueline P. Cox, J., held that interpreting bankruptcy removal statute as authorizing removal from federal district to bankruptcy court would jeopardize the district courts' referral authority regarding bankruptcy matters.
ORDER ON MOTION TO DISMISS AND ALTERNATIVE MOTION TO REMAND/MOTION TO STRIKE
In Adversary Proceeding 09-ap-00384, Dr. Waqar Khan and Shafqut Khan (the Khans) filed a Notice of Removal to remove a garnishment action from the 95th District Court for Dallas County, Texas to this Court as part of the underlying bankruptcy case. In Adversary Proceeding 09-ap00385, the Khans, and Abdul and Shaheed Rashid (the Rashids), filed a Notice of Removal to remove cause no. 3:05-cv-01367 from the U.S. District Court for the Northern District of Texas to this Court as part of the underlying bankruptcy case. Wellness International Network, Ltd., WIN Network, Inc., and Ralph and Cathy Oats (collectively, the Movants or WIN) ask that the court dismiss, remand, or strike the notices of removal.
After attempting to pursue a lawsuit in Illinois in contravention of the venue clauses in their contracts with WIN, the Khans, Rashids, and the debtor, Richard Sharif (Sharif), (collectively, the Respondents) sued WIN in the U.S. District Court for the Northern District of Texas for fraud, claims under the Racketeer Influenced and Corrupt Organization Act (RICO), and other claims regarding their contractual relationship with WIN. They were attempting to avoid their contractual obligations with WIN and sought damages of approximately $1 million.
According to WIN, the Respondents did not conduct any discovery in the Texas District Court action and refused to cooperate with WIN's discovery requests. The Respondents did not serve initial disclosures and, as a result, had admissions of fact deemed against them. WIN successfully moved for summary judgment alleging that those admissions conclusively negated each claim asserted by the Respondents and that they failed to introduce evidence on any claim. The Respondents appealed that judgment to the Fifth Circuit Court of Appeals. The Fifth Circuit affirmed all of the district court's ruling, stating in part:
A review of the record on appeal demonstrates that Appellants' untimely performance in this court mirrors a lengthy history in the district court of dilatoriness and hollow posturing interspersed with periods of nonperformance or insubstantial performance and compliance by Appellants and their counsel, leaving the unmistakable impression that they have no purpose other than to prolong this contumacious litigation for purposes of harassment or delay, or both. The time is long overdue to terminate Appellants' feckless litigation at the obvious cost of time and money to the Defendants by affirming all rulings of the district court but remanding the case to that court for reinstatement of its consideration of Appellees' motion for attorney's fees. In so doing, we caution Appellants that any further efforts to prolong or...
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