In re Micro Design, Inc.
| Decision Date | 03 August 1990 |
| Docket Number | Bankruptcy No. 90-10846S,Misc. No. 90-425,Adv. No. 90-0430S. |
| Parties | In re MICRO DESIGN, INC., Debtor. COMPUTERWARE, INC., Plaintiff, v. MICRO DESIGN, INC., Defendant. MICRO DESIGN, INC., Plaintiff, v. James R. KOVALCIK, Thomas Kovalcik, David Kovalcik, and John Kovalcik, Jr., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Richard J. Kwasny, Lawrenceville, N.J., for debtor.
Glenn E. Davis, Philadelphia, Pa., for Computerware, Inc.
Ronald J. Isenberg, Cozen, Begier & O'Connor, Philadelphia, Pa., for debtor in State Court.
John J. Hagan, Harbor, Pa., for Computerware, Inc. in State Court.
AND NOW, this 3rd day of August, 1990, upon consideration of the Report and Recommendations of the United States Bankruptcy Judge of June 29, 1990, it is hereby ORDERED and DECREED as follows:
1. The Report and Recommendations are ADOPTED by this court.
2. The Motion of COMPUTERWARE, INC. to Remand the Actions removed in this proceeding is GRANTED.
3. The cases removed in this proceeding are remanded to the Court of Common Pleas of Montgomery County, at Nos. 85-09080 and 87-11818, respectively.
4. The Deputy in Charge of Bankruptcy Operation is directed to remit the file in this proceeding to the Court of Common Pleas of Montgomery County forthwith.
Before the court is a Motion filed by COMPUTERWARE, INC. ("Computerware"), the Plaintiff in one of two related matters removed from the Court of Common Pleas of Montgomery County, Pennsylvania ("CCP"), to the bankruptcy court under a single adversary number, asking that the bankruptcy court abstain from hearing both matters or remand them back to the CCP, and grant Computerware relief from the automatic stay to proceed on its action in the CCP against MICRO DESIGN, INC., the Debtor in the underlying proceeding ("the Debtor"). In compliance with Bankruptcy Rule ( ) 9027(e), we herein present a Report and Recommendations concerning the Motion to the district court, recommending that both actions be remanded to the state court. However, we will deny that aspect of Computerware's Motion seeking relief from the automatic stay to proceed with its action against the Debtor in the CCP because of both procedural and substantive deficiencies in this aspect of the Motion.
Computerware commenced the first of the Actions by filing a civil action in the CCP, docketed at No. 85-09080, against the Debtor on August 5, 1985 ("Computerware's Action"), upon the Debtor's appeal from a judgment of a local District Justice Court against the Debtor. In its underlying claim, Computerware alleges that it sold and delivered to the Debtor certain computer and related equipment for which the Debtor has not paid a total of $3,673.80 in breach of the parties' contract.
In addition to defending Computerware's Action, the Debtor commenced a civil action of its own against James R. Kovalcik, Thomas Kovalcik, David Kovalcik, and John Kovalcik, Jr. ("the Kovalciks"), officers or employees of Computerware, also in the CCP, which was docketed as No. 87-11818. In this case, the Debtor alleged that the Kovalciks physically assaulted employees of the Debtor in seeking to "peaceably repossess" the computer equipment in issue ("the Debtor's Action"). The Kovalciks' actions allegedly resulted in physical injuries to the employees, damage to the Debtor's property, and a loss of business significantly contributing to the Debtor's Chapter 11 filing on February 28, 1990. The Debtor is requesting compensatory and punitive damages in excess of $200,000.00.
On May 30, 1990, both Computerware's Action and the Debtor's Action were removed to this court pursuant to the Debtor's Application for removal filed May 25, 1990.1 By Order dated May 30, 1990, pursuant to our regular practice with any case removed to this court, we ordered that any party wishing to file a Motion to Remand must file same and an accompanying Brief by June 13, 1990; that the Debtor must respond by June 25, 1990; and that a trial was set for July 5, 1990, in the event that no remand transpired. Computerware timely filed its Motion,2 although it appended thereto a request that we abstain from hearing these proceedings and a request for relief from the automatic stay to pursue its Action against the Debtor in the CCP as well.
Computerware requests that both Actions be remanded to the CCP because (1) the Actions are non-core, and therefore mandatory abstention would be appropriate; (2) all parties have requested jury trials in both actions;3 and (3) litigation of the Actions in this court is inconvenient, since all witnesses and employees of all parties are located in Montgomery County.4
Once an action is removed to the bankruptcy court, it may be remanded pursuant to 28 U.S.C. § 1452(b), which provides as follows:
The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action, or a decision, is not reviewable by appeal or otherwise.
Since a remand may be made based on "any equitable ground," 28 U.S.C. § 1452(b) gives very broad discretion to the district court to remand a removed proceeding back to the court from which it has been removed. 1 COLLIER ON BANKRUPTCY ¶ 3.01g, at 3-98 (15th ed. 1989). Accord, Hanna v. Philadelphia Asbestos Co., 743 F.2d 996, 1000-01 (3d Cir.1984).
In Browning v. Navarro, 743 F.2d 1069, 1076 n. 21 (5th Cir.1984), the court, considering 28 U.S.C. § 1478(b), the predecessor of § 1452(b), listed eight non-exclusive factors to review when determining a remand motion:
(1) forum non conveniens; (2) a holding that, if the civil action has been bifurcated by removal, the entire action should be tried in the same court; (3) a holding that a state court is better able to respond to questions involving state law; (4) expertise of the particular court; (5) duplicative and uneconomic effort of judicial resources in two forums; (6) prejudice to the involuntarily removed parties; (7) comity considerations; and (8) a lessened possibility of an inconsistent result (citations omitted).
See also In re Ross, 64 B.R. 829, 834-35 (Bankr.S.D.N.Y.1986).
The courts of this jurisdiction have consistently held that, if grounds for abstention pursuant to 28 U.S.C. § 1334(c) are present, then a remand is appropriate. See In re Taylor, Federal National Mortgage Ass'n v. Rockafellow, 115 B.R. 498, 500 (E.D.Pa.1990); In re Joshua Slocum, Ltd., 109 B.R. 101, 105 (E.D.Pa.1989); In re Pacor, Inc., 72 B.R. 927, 931 (Bankr.E.D.Pa. 1987), adopted, 86 B.R. 808 (E.D.Pa.1988), appeal dismissed, No. 87-1408 (3d Cir. Jan. 27, 1988); and In re Futura Industries, Inc., 69 B.R. 831, 835-36 (Bankr.E.D. Pa.1987). See also In re Perry, 86 B.R. 388, 389 (E.D.Pa.1988); In re Gurst, 75 B.R. 575, 577-79 (Bankr.E.D.Pa.1987); and In re United Church of the Ministers of God, 74 B.R. 271, 276-78 (Bankr.E.D.Pa. 1987).
Therefore, those aspects of Computerware's Motion seeking abstention and a remand in reference of this proceeding are basically congruent, as is the relief sought therein that this proceeding should be returned to the CCP.
We therefore will focus on the more structured law pertaining to abstention, which is set forth statutorily in 28 U.S.C. §§ 1334(c)(1) (discretional abstention) and (c)(2) (mandatory abstention) as follows:
It is well-established, in this jurisdiction, that "mandatory abstention," pursuant to § 1334(c)(2), is appropriate only when the following six requirements are satisfied:
(1) a timely motion is made; (2) the proceeding is based upon a state law claim or state law cause of action; (3) the proceeding is related to a case under Title 11; (4) the proceeding does not arise under Title 11; (5) the action could not have been commenced in a federal court absent jurisdiction under 28 U.S.C. § 1334; and (6) an action is commenced, and can be timely adjudicated, in a state forum of appropriate jurisdiction.
Taylor, supra, 115 B.R. at 500; Joshua Slocum, supra, 109 B.R. at 105; In re Container Transport, Inc., 86 B.R. 804, 806 (E.D.Pa.1988); Pacor, supra, 72 B.R. at 932; and Futura Industries, 69 B.R. at 834.
There is little dispute that the first, second, fourth, and fifth requirements of the six above stated are met here. However, the parties devote considerable energy to a dispute over whether these Actions are "core proceedings," pursuant to 28 U.S.C. § 157(b)(2), and very little attention to whether these Actions can be timely adjudicated in the CCP,...
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