In re Shaffer
| Citation | 42 BR 522 |
| Decision Date | 31 August 1984 |
| Docket Number | Adv. No. 384-9122.,Bankruptcy No. 383-00374-F-11 |
| Parties | In re Philip Craig SHAFFER, Debtor. U.S. COMPANIES, INC., et al., Plaintiffs, v. Craig SHAFFER, Individually and d/b/a Insurance Marketing Services, Inc., Defendant. |
| Court | United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas |
Philip I. Palmer, Jr., Linda Coffee, PALMER, PALMER & COFFEE, Dallas, Tex., for Philip Craig Shaffer.
Cleveland G. Clinton, G. Leroy Street, GEARY, STAHL & SPENCER, Dallas, Tex., for U.S. Companies, Inc., et al.
This case was referred back to this Court by Judge Robert M. Hill, United States District Court for the Northern District of Texas on May 8, 1984. The issues raised in Plaintiffs', U.S. Steel Companies, et al., (hereinafter referred to as U.S. Steel Companies) motion to vacate or, in the alternative, to modify order granting withdrawal of reference and complaint for injunctive relief were referred back for determination by this Court. Plaintiffs raise issues concerning the timeliness of the filing of the Defendant's, Craig Shaffer, petition for removal and the effect of the amendment of the original pleading on the Court's Remand Order of October 31, 1983.
It is this Court's opinion that the October 31, 1983 Remand Order is not reviewable by the District Court, that the Defendant's second petition for removal is untimely and the amendment to the pleadings did not extend the time for the Defendant to file a timely petition for removal.
This action was originally filed on May 14, 1982, in the 298th Judicial District Court of Dallas County, Texas, Cause No. 82-5300-M. Craig Shaffer, the Defendant in this matter before this Court, filed a voluntary petition for reorganization in the Bankruptcy Court on March 15, 1983; the petition was voluntarily dismissed and subsequently refiled on May 17, 1983. Defendant, Craig Shaffer, filed a petition for removal of the state court action on June 19, 1983. The first petition was reinstated and the proceedings were consolidated on July 26, 1983. U.S. Companies, Plaintiffs, successfully sought a remand order and relief from the automatic stay. This Court granted the relief sought by the Plaintiffs, U.S. Companies, but stayed the enforcement of any judgment against the Defendant's assets until the conclusion of the bankruptcy proceedings in its Remand Order of October 31, 1983.
Plaintiffs amended their state court pleadings to add claims for the imposition of a constructive trust and for a permanent injunction on January 11, 1984. Defendant then filed a cross claim and amended his counterclaim on January 20, 1984.
A second petition for removal was filed by the Defendant, Craig Shaffer, with the Bankruptcy Court on February 21, 1984. The effect of this was the staying of the court action in the 298th Judicial District Court of Dallas County, Texas, Cause No. 82-5300-M. On February 22, 1984, the Defendant filed a motion to withdraw the bankruptcy proceeding to the United States District Court. Based upon the demand for a jury trial, the United States District Court withdrew the reference on March 4, 1984. The District Court then remanded this case to this Court on May 18, 1984 for determination of timeliness of the issues.
This Court entered an order remanding this case to the state court and granting U.S. Companies a relief from stay on October 31, 1983. Craig Shaffer had thirty days from October 31, 1983 to file his second petition for removal. A petition for removal had been previously filed on June 19, 1983 apparently in compliance with old Bankruptcy Rule 7004, but without consequence. In order to comply with the presently enacted 28 U.S.C. § 1478 and Bankruptcy Rule 9027, Craig Shaffer had to file his petition for removal no later than November 30, 1983. Instead, he allowed almost four months to pass before he filed his untimely second petition for removal on February 21, 1984. There is no doubt but that the second petition for removal was filed late and, therefore, Shaffer cannot avail himself of the protection provided by Bankruptcy Rule 9027 and 28 U.S.C. § 1478.
Craig Shaffer, Defendant and Debtor, argues that the time to file his second petition for removal was extended by the amendments to the original pleadings. It is Shaffer's contention that these amendments gave him thirty more days in which he could have filed his second petition for removal. The thirty day extension for filing a petition for removal is not provided by either 28 U.S.C. § 1478 or by Bankruptcy Rule 9027. This extension period may be established by amending a complaint or pleading under 28 U.S.C. § 1446, which provides for removal of civil action from state court to the United States district court.
In the case of In re Tidwell, 4 B.R. 100, 101 (Bankr., N.D. Texas 1980), Judge John Flowers held that 28 U.S.C. § 1478 is a federal statute and that federal law governs it. Bankruptcy Rule 9027 which provides the basis and procedure for removal of cases under 28 U.S.C. § 1478 is also governed by federal law. Moreover, Bankruptcy Rule 9027 substantially conforms to the language and procedure of 28 U.S.C. § 1446. There is no case law to guide this Court on the effect of amended pleadings on the removal of cases under 28 U.S.C. § 1478 and Bankruptcy Rule 9027. This Court must rely on decisions concerning the removal of state court actions to United States district courts under 28 U.S.C. § 1446 for guidance since federal law controls. See In re Delta Groups, Ltd., 16 B.R. 333 (Bankr., N.D. Texas 1982).
To come within the provisions of 28 U.S.C. § 1446, the amendment of a state court complaint must be one that makes the case removable at the time of amendment. O'Bryan v. Chandler, 496 F.2d 403, 409, cert. denied, 419 U.S. 986, 95 S.Ct. 245, 42 L.Ed.2d 194; reh. denied, 420 U.S. 913, 95 S.Ct. 838, 42 L.Ed.2d 845 (1974). Unless the amendment gives rise to another removable basis, a party will not acquire an additional thirty days in which he or she can remove his or her case. Miles v. Starks, 440 F.Supp. 947 (1977), 1A MOORE'S FEDERAL PRACTICE ¶ 0.168 3.-5-6 (1983). The courts have granted a thirty day extension for filing a petition for removal where the plaintiff files an amended complaint "that so changes the nature of the action as to constitute `substantially a new suit begun that day'." Wilson v. Intercollegiate (Big Ten) Conference Athletic Association, 668 F.2d 962, 965; cert. denied, 459 U.S. 831, 103 S.Ct. 70, 74 L.Ed.2d 70 (1983).
Four separate amendments were made to the pleadings in this case. First, the Plaintiffs, U.S. Companies, Inc., amended on January 11, 1984 its petition filed on May 14, 1982 in the 298th Judicial District Court of Dallas County, Texas, Cause No. 82-5300-M. This amendment had no effect on the period for filing the petition for removal since the first amended original petition is in essence the same as the original petition. It describes the allegations and claims against Craig Shaffer in more detail and seeks to impose a constructive trust and a permanent injunction. These amendments did not change the original petition so radically that a new and substantially different case was before the 298th Judicial District Court of Dallas County, Texas. As a result, an additional thirty days was not available to the Defendant and Debtor, Craig Shaffer, for filing a second petition for removal. O'Bryan v. Chandler, 496 F.2d 403, cert. denied, 419 U.S. 986, 95 S.Ct. 245, 42 L.Ed.2d 194; reh. denied, 420 U.S. 913, 95 S.Ct. 838, 42 L.Ed.2d 845 (1974); Miles v. Starks, 440 F.Supp. 947 (1977).
The remaining three amendments to the pleadings were made by the Defendant and Debtor, Craig Shaffer, to his original answer, counterclaim and cross-claim. Shaffer amended his...
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