Ellenberg v. Bouldin, Civ. A. No. 1:90-CV-178-HTW.
Decision Date | 16 March 1991 |
Docket Number | Civ. A. No. 1:90-CV-178-HTW. |
Citation | 125 BR 851 |
Parties | Richard D. ELLENBERG, Trustee, Appellant, v. J.W. BOULDIN and Phillis F. Bouldin, Appellees. |
Court | U.S. District Court — Northern District of Georgia |
Richard D. Ellenberg, pro se.
Jay W. Bouldin, pro se.
This matter is currently before the court on the Bankruptcy Judge's Order and Recommendation. The Bankruptcy Judge has recommended that this court withdraw the reference of this proceeding in order to provide the parties with a court of unquestioned jurisdiction to try this matter before a jury. The Trustee seeks review of the Bankruptcy Judge's Order and Recommendation.
The Trustee brought this adversary action seeking to set aside an allegedly fraudulent or preferential transfer of real property. Defendant Phillis Bouldin demanded a trial by jury. On June 12, 1988, the Bankruptcy Court denied that demand.
109 S.Ct. at 2787. However, the Supreme Court left the issue of which court is empowered to conduct the jury trial unanswered. Granfinanciera, 109 S.Ct. at 2794-95.
Pursuant to Granfinanciera, Phillis Bouldin renewed her demand to a jury trial. While the Bankruptcy Court was receiving briefs on the issue of whether the Bankruptcy Court is empowered to conduct jury trials on the issues present in this case, the Trustee recommended that the Bankruptcy Court should request withdrawal of the reference. The defendants contended that the Bankruptcy Court is empowered to conduct such trials.
In ruling on the renewed jury demand, the Bankruptcy Judge recommended that this court withdraw the reference of this case to the Bankruptcy Court. The decision is supported by the Bankruptcy Judge's detailed Memorandum of Opinion which describes in detail the current law on the issue. The court finds the Bankruptcy Judge's Memorandum Opinion persuasive.
After a careful, de novo, review of the entire record and the law, the court ADOPTS the reasoning of the Bankruptcy Judge and WITHDRAWS THE REFERENCE OF THIS PROCEEDING TO THE BANKRUPTCY COURT pursuant to 28 U.S.C.A. § 157(d); L.R. 265-1.
SO ORDERED.
United States Bankruptcy Court Northern District of Georgia Atlanta Division.
In the Matter of Jay W. Bouldin, Debtor.
Richard D. Ellenberg, as Trustee, Plaintiff,
v.
J.W. Bouldin and Phillis F. Bouldin, Defendants.
The above-styled adversary proceeding is before the Court on the "Restatement of Demand for Jury Trial by Defendant Phillis F. Bouldin." The Court had previously denied Defendants' demand for a jury trial by Order entered June 13, 1988. Defendant Phillis F. Bouldin has now renewed her request for a jury trial based upon the recent United States Supreme Court case of Granfinanciera, S.A. v. Nordberg (In re Chase & Sandborn Corp.), 492 U.S. 33, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989), in which the Court found that in a fraudulent or preferential transfer action, a defendant who had asserted no claim against the bankruptcy estate had a Seventh Amendment right to trial by jury.
In the instant complaint, Plaintiff-Trustee seeks to recover an alleged fraudulent or preferential transfer from the Defendants. These are both core proceedings pursuant to 28 U.S.C. § 157(b)(2). Defendant Phillis F. Bouldin has filed no claim against the bankruptcy estate. Plaintiff-Trustee agrees that Defendant Phillis F. Bouldin has a right to a jury trial in this matter. The only controversy is in which forum will the jury trial be held. The Court requested briefs from the Parties on this issue. Plaintiff-Trustee asserts that the jury trial should be held in the district court. Defendant, on the other hand, contends that the bankruptcy court can conduct the jury trial. The following issue is presented by this proceeding: Does the bankruptcy court have authority to conduct a jury trial in a core proceeding where the parties have not so consented?
Therefore, once the right to a jury trial has been found to exist, the Supreme Court in Granfinanciera has left the following questions to be answered:
1. Has Congress authorized bankruptcy courts to hold jury trials?
2. If Congress has, does that authorization comport with Article III? and
3. Would a jury trial conducted by a bankruptcy court satisfy the requirements of the Seventh Amendment?
Each of these questions will be discussed separately below.
Although from Granfinanciera we now know that the right to a jury trial in the context of a bankruptcy proceeding exists in matters other than personal injury and tort claims, it is significant that the only time Congress has addressed the issue it directed that the district courts conduct the jury trial.
Some courts have held that, because Congress was silent by enacting no direct prohibition of bankruptcy courts conducting jury trials, it intended bankruptcy courts to have the full power to do so. See, e.g., Macon Prestressed Concrete Co. v. Duke (In re Macon Prestressed Concrete Co.), 46 B.R. 727 (M.D.Ga.1985). However, when one reflects upon the system established by Congress, it is apparent that it intended to create a specialized court to handle bankruptcy matters in an expedited and efficient manner. The system is not set up to handle lengthy jury trials. To introduce this method of litigation into the system would be at the expense of all other matters handled by the bankruptcy courts. This Court does not believe such a result was intended by Congress. Moreover, without an express statutory provision, this Court refuses to find that Congress has authorized the bankruptcy courts to conduct jury trials.
This finding should end inquiry into the issue before the Court. However, the Court recognizes that there is an emerging split in authority on the issue post-Granfinanciera. The following cases have found that bankruptcy courts can conduct jury trial: Kroh Bros. Dev. Co. v. United Missouri Bank of Kansas City (In re Kroh Bros. Dev. Co.), 108 B.R. 228 (W.D.Mo. 1989); Perino v. Cohen (In re Cohen), 107 B.R. 453 (S.D.N.Y.1989); Citibank N.A. v. Park-Kenilworth Indus., Inc., 109 B.R. 321 (N.D.Ill.1989); Hughes-Bechtol, Inc. v. Air Enter., Inc. (In re Hughes Bechtol, Inc.), 107 B.R. 552 (Bankr.S.D.Ohio 1989). On the other hand, the following cases hold that bankruptcy courts cannot conduct jury trials: Wilkey v. Inter-Trade, Inc. (In re Owensboro Distilling Co.), 108 B.R. 572 (Bankr.W.D.Ky.1989); Friedman v. Gold Advice, Inc. (In re Fort Lauderdale Hotel Partners, Ltd.), 103 B.R. 335 (...
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