Cage v. Smith (In re Smith)
Decision Date | 10 June 2014 |
Docket Number | Bankruptcy No. 12–32096.,Adversary No. 14–03115. |
Citation | 521 B.R. 767 |
Parties | In re Cody W. SMITH, Debtor. Lowell T. Cage, Trustee, Plaintiff, v. Cody W. Smith and Tracy G. Smith, Defendants. |
Court | U.S. Bankruptcy Court — Southern District of Texas |
Timothy L. Wentworth, Cage, Hill & Niehaus, LLP, Houston, TX, for Plaintiff.
Alan Sanford Gerger, Dunn Neal et al., Houston, TX, for Defendants.
Lowell T. Cage, the Chapter 7 trustee in this case (the Trustee), has filed suit against Cody W. Smith (the Debtor) and his wife seeking a determination that certain proceeds in their possession are property of the estate under 11 U.S.C. § 5411 and to recover these proceeds under § 542.2 Not surprisingly, the Debtor and his wife vigorously oppose the relief sought by the Trustee. Green Bank, N.A. (Green Bank), the largest unsecured creditor in this case, wants to join in this lawsuit as a party-plaintiff. The Trustee supports Green Bank's request, no doubt because Green Bank would be willing to share in the expenses of discovery and trial preparation. The Debtor and wife oppose Green Bank's request to intervene. While it makes good economic sense for the Trustee to support Green Bank's request, this Court concludes that Green Bank may not intervene and that the Trustee must “go it alone.” This opinion sets forth the reasons why the Court makes this ruling.
The Court makes the following Findings of Fact and Conclusions of Law under Federal Rule of Civil Procedure 52, as incorporated into by Federal Rules of Bankruptcy Procedure 7052 and 9014. To the extent that any Finding of Fact is construed to be a Conclusion of Law, it is adopted as such. To the extent that any Conclusion of Law is construed to be a Finding of Fact, it is adopted as such. The Court reserves the right to make any additional Findings and Conclusions as may be necessary or as requested by any party.
The Court has jurisdiction over this dispute pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This particular dispute over whether Green Bank can join as a party-plaintiff is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) because it affects the administration of this Chapter 7 estate.
Venue is proper pursuant to 28 U.S.C. § 1409.
Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), sets forth certain limitations on the constitutional authority of bankruptcy courts to enter final orders. This Court must therefore determine whether it has constitutional authority to enter a final order in the dispute at bar.
The threshold question is whether the denial of a motion to intervene is an appealable final order that requires this Court to do a Stern analysis. This Court concludes that entering an order denying the relief sought by Green Bank is a final order. See, e.g., Lucas v. McKeithen, 102 F.3d 171, 173 (5th Cir.1996) (); Edwards v. City of Houston, 78 F.3d 983, 992 (5th Cir.1996) (). Therefore, this Court must analyze whether it has constitutional authority to enter a final order denying the Amended Motion to Join.
In Stern, the debtor, pursuant to 28 U.S.C. § 157(b)(2)(C), filed a...
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