In re Anderson

Decision Date17 September 1982
Docket NumberBankruptcy No. 181-03033,Adv. No. 182-0505.
Citation24 BR 640
PartiesIn re Jeff Benny ANDERSON, Debtor. Sam J. MCALLESTER, III, Trustee, Plaintiff, v. Norma L. ALDRIDGE, et al., Defendants.
CourtU.S. Bankruptcy Court — Middle District of Tennessee

Russell H. Hippe, Jr., Nashville, Tenn., and Charles W. Wade, Lewisburg, Tenn., for Frances Hardison, Frank Hardison, Freddie T. Mustain, Judith H. Mustain, Dorlene Sargent and Roy L. Sargent.

Julie N. Jones, Nashville, Tenn., for Norma L. Aldridge, James M. Jones, Jr., Trustee, and Peoples and Union Bank.

Walter Bussart, Lewisburg, Tenn., for Connie B. Armstrong, Maynard B. Armstrong, Carolyn N. Bingham, James H. Bingham, Jr., Marvin G. Burrow, Jr. and Salene Burrow, Grover Collins, Peggy P. Collins, Addie W. Harris, L.R. Harris, Jr., Henry L. Hulshof, Dorothy Y. Hulshof, David Jent, Patricia H. Jent, Ron Klenk, John David Murray, Yolanda Murray, Mike Samford, and Ed E. Smotherman.

Sam J. McAllester, W. Gary Blackburn, Roger E. Brandon, Rhonda L. Epperson, Robert Ziegler, Margaret M. Huff, Douglas Fisher, pro se.


GEORGE C. PAINE, II, Bankruptcy Judge.

This matter is before the court on the various motions of the parties involved in this adversary proceeding. For the convenience of the parties, the court's determination of these motions will be consolidated in this single order. Upon consideration of the evidence presented at the hearing of this matter on August 26, 1982, stipulations, briefs of the parties and the entire record, this court concludes that (1) the trustee's motion to dismiss the counterclaims of several of the defendants should be granted, (2) the defendants Robert O. Binkley, Norma L. Aldridge and Rhonda L. Epperson's motions to dismiss for failure to state a claim should be granted, (3) the defendant Binkley's motion to dismiss all cross-claims filed against him should be granted and (4) the defendants' motion to reconsider the court's prior order refusing to abstain from hearing this adversary proceeding should be denied.


This adversary proceeding was initiated by the trustee pursuant to 11 U.S.C. § 544 to recover certain parcels of real property conveyed by the debtor. The trustee essentially contends that the notary acknowledgements contained in each of the deeds transferring the aforementioned property are not in compliance with the Tennessee statutory requirements and therefore the deeds and their subsequent recordation in the Register's Office are null and void as to the trustee. In their answers to the trustee's complaint, various defendants asserted counterclaims of malicious prosecution against the trustee.1 The trustee now seeks to dismiss these counterclaims.

After a careful examination of both Tennessee and federal law, this court is persuaded that the trustee's position is correct and thus his motion to dismiss should be granted. A complaint for malicious prosecution must aver that the prosecution in question has terminated and resulted in a favorable verdict for the complainant. Merritt-Chapman & Scott Corp. v. Elgin Coal, Inc., 358 F.Supp. 17, 19 (E.D. Tenn.1972), aff'd 477 F.2d 598 (6th Cir. 1973); Williams v. Stone, 339 F.Supp. 1298, 1299 (E.D.Tenn.1971); Scheibler v. Steinburg, 129 Tenn. 614, 167 S.W. 866 (1914). The defendants may not, therefore, assert counterclaims for malicious prosecution at this time since such claims will not mature until and unless the instant proceeding concludes with a favorable judgment for the defendants. See, e.g., Olsen v. Puntervold, 338 F.2d 21, 22 (5th Cir.1964); United States ex rel. Sacks v. Philadelphia Health Management Corp., 519 F.Supp. 818, 825-826 (E.D.Penn.1981); Redman Industries, Inc. v. Tower Properties, Inc., 517 F.Supp. 144, 154 (N.D.Ga.1981); The Savage Is Loose Co. v. United Artists Theatre Circuit, Inc., 413 F.Supp. 555, 561-562 (S.D.N.Y. 1976); Universal Underwriters Insurance Co. v. Security Industries, Inc., 391 F.Supp. 326, 329 (W.D.Wash.1974); Fischer & Porter Co. v. Haskett, 287 F.Supp. 831, 834 (E.D.Pa.1968); 3 Moore's Federal Practice ¶ 13.13, at 13-308 (2d ed. 1982).


The next matter confronting the court comprises the defendants Robert O. Binkley, Norma L. Aldridge and Rhonda L. Epperson's2 motions to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The court is of the opinion that each of these motions should be granted. In order to have a cause of action against these defendants, the trustee must affirmatively prove that the defendants have in some manner caused damage or injury to the bankruptcy estate. Hodge v. Service Machine Co., 438 F.2d 347, 349 (6th Cir.1971). See also Ameraccount Club, Inc. v. Hill, 617 S.W.2d 876, 878 (Tenn. 1981). The trustee in his complaint seeks to recover various parcels of property on the basis that the deeds to these properties contain defective acknowledgements and thus can be avoided by the trustee. The defendant Binkley prepared the allegedly defective deeds whereas the defendants Aldridge and Epperson notarized these deeds. These acts have in no way resulted in any harm or injury to the bankruptcy estate. Indeed, without the purported negligence of these defendants, the trustee would have no cause of action to pursue.

The court further finds that these defendants are not necessary parties to this adversary proceeding as defined by Rule 719 of the Federal Rules of Bankruptcy Procedure. Rule 719 provides in pertinent part:

"(a) Persons to be Joined if Feasible. A person who is subject to service of process shall be joined as a party in the proceeding if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the proceeding and is so situated that the disposition of the proceeding in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. ..."

The trustee requests no affirmative relief from these defendants. Nor is the testimony of these defendants critical since the validity of the trustee's complaint will ultimately depend on the court's interpretation of the documents themselves. Finally, these defendants have no interest in the property which is the subject matter of this suit. The fact that the final judgment in this cause might result in negligence actions being brought against these defendants might support a motion to intervene by the defendants but it certainly does not require them to be joined as necessary parties to this proceeding. See Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 119-123, 88 S.Ct. 733, 743-745, 19 L.Ed.2d 936 (1968). In this regard, the court would note that these defendants have shown absolutely no proclivity to be included in this proceeding and indeed have fought tooth and nail to be dismissed as party defendants.


Since the court has determined that the defendant Binkley should be dismissed from this proceeding, the court will also dismiss any cross-claims filed against Binkley pursuant to Federal Rule of Civil Procedure 13(g). Rule 13(g) expressly provides that a cross-claim may only be asserted against existing co-parties. Binkley is no longer a party defendant to this action and therefore the cross-claims against him should be dismissed.3 6 C. Wright & A. Miller Federal Practice and Procedure § 1431, at 163 (1971). See also Gauthier v. Crosby Marine Service, Inc., 87 F.R.D. 353, 354 (E.D.La.1980); United States Agricultural Processors Marketing Service, Inc. v. Quinonez Hermanos, 73 F.R.D. 87, 89-90 (S.D.Fla.1976); Weisman v. Ashplant, 326 F.Supp. 825, 826 (S.D.N.Y.1971).


The final matter for the court's consideration is the various defendants' motion to reconsider this court's prior order refusing to abstain from exercising jurisdiction over this adversary proceeding. These defendants essentially contend that absention is warranted in this matter since the proceeding involves the interpretation of state law which the defendants claim is archaic and the proceeding could be substantially delayed by the jurisdictional controversy surrounding the United States Supreme Court's recent decision in Northern Pipeline Construction Co. v. Marathon Pipeline Co., ___ U.S. ___, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). In an order dated August 26, 1982, this court denied the defendants' initial request for abstention on the following grounds:

"In denying the defendants\' motion to dismiss, this court adopts the analysis set forth by Judge Lundin in the recent opinion of Schneider v. 2-Star Foods, Inc. (In re Cumberland Enterprises, Inc., Northeast Enterprises, Inc. and Northeast Enterprises of Columbus, Inc.), 22 B.R. 626 Bk. Nos. 381-01797, 382-00758 and 382-00757, Adv. No. 382-0289 (Bankr.M.D. Tenn. August 18, 1982). This court specifically concurs with Judge Lundin\'s finding that the stay entered by the Supreme Court in Northern Pipeline permits the bankruptcy courts to continue to exercise jurisdiction under 11 U.S.C. § 1471 until October 4, 1982.
For these same reasons, plus the fact that this adversary proceeding is essentially a traditional bankruptcy action whereby the trustee is seeking to assert his avoiding powers under the Bankruptcy Code, the court declines to abstain from hearing this proceeding at this time. The mere fact the complicated and unsettled issues of state law may be involved in the ultimate resolution of this matter does not in and of itself support a finding of abstention by a bankruptcy court. This court, sitting as a federal court in the Middle District of

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