Marshall v. City of Atlanta
| Decision Date | 29 March 1996 |
| Docket Number | Civ. A. No. 1:95-CV-1595-JOF. |
| Citation | 195 BR 156 |
| Parties | James R. MARSHALL, Trustee in Bankruptcy for Air Terminal Enterprises, Inc., Plaintiff, v. CITY OF ATLANTA, et al., Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
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James R. Marshall, Atlanta, GA, Frank X. Moore, Schwieger & Moore, Atlanta, GA, for Plaintiff.
Teri Ellis-Brown, Assistant City of Atlanta Attorney, Atlanta, GA, for Defendant City of Atlanta.
This matter is before the court on United States Bankruptcy Judge Robert E. Brizendine's Report and Recommendation that the counts against Defendant Mack Wilbourn be dismissed for failure to state a claim. In addition, Defendant Wilbourn has moved this court to withdraw the reference to the bankruptcy court due to the presence of Racketeering-Influenced and Corrupt Organization ("RICO") and state law claims in the debtor's petition.
In his Report and Recommendation, Judge Brizendine recommended that Defendant's motion to dismiss be granted. After careful consideration and since there are no objections, this court ADOPTS Judge Brizendine's Report and Recommendation.
In his motion to withdraw the reference from the bankruptcy court, Defendant Wilbourn argued that withdrawal is mandated because of the RICO and state law allegations against him. Defendant Wilbourn presented both the motion to withdraw the reference and the motion to dismiss to Judge Brizendine, who recommended that the motion to dismiss be granted. Since Defendant Wilbourn failed to object to the Report and Recommendation, this court assumes that Defendant has abandoned his motion to withdraw the reference in favor of the alternative motion to dismiss. Accordingly, Defendant's motion to withdraw the reference is DENIED.
Defendant Wilbourn's motion to withdraw the reference 1-1 is DENIED. Judge Brizendine's Report and Recommendation 2-1 is ADOPTED. Defendant Wilbourn is DISMISSED from the action.
SO ORDERED.
UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION
ADVERSARY PROCEEDING NO. 93-6941
v.
CITY OF ATLANTA, DOBBS PASCHAL MIDFIELD CORPORATION, IRA JACKSON, MACK WILBORN a/k/a McKINLEY WILBORN, ROBERT HAROLD ECHOLS, SR., and WILLIAM E. BROOKS, Defendants.
This adversary proceeding is before the Court on the renewed motion of Co-Defendant Mack Wilbourn to dismiss or, in the alternative, for a more definite statement.1 Upon consideration of these matters, the Court recommends that the motion be granted and that the complaint be dismissed as against this defendant.
In his complaint, Plaintiff-Trustee seeks an award of money damages, including punitive damages, against the above-named co-defendants under several causes of action. The allegations asserted against Mack Wilbourn are based on the following theories of relief: (Count I) federal Racketeer Influenced and Corrupt Organizations Act (RICO), as set forth in 18 U.S.C. §§ 1961-1968; (Count II), Georgia RICO, as set forth at O.C.G.A. §§ 16-14-1 to -15 (Michie Supp. 1994); and (Count V) tortious interference with business relations. These allegations generally center around operations of the subconcessionaire program at Atlanta Hartsfield International Airport.
By previous order, this Court granted Plaintiff's motion to amend complaint and deferred Wilbourn's motion to dismiss same. See Order of June 27, 1994. After Plaintiff filed such amended complaint, Wilbourn filed a renewed motion to dismiss or, in the alternative, motion for a more definite statement.2 Now that Plaintiff has finally pled his claims in his amended complaint, the sufficiency of his allegations can be tested under Fed. R.Bankr.P. 7012, which incorporates Fed. R.Civ.P. 12(b)(6), and Wilbourn's motion is ripe for consideration.
The Court must first determine whether this action constitutes a core or a non-core proceeding. This determination will dictate the appropriate form in which the Court shall enter its ruling herein.3 In accordance with 28 U.S.C. § 157(b)(1), bankruptcy judges may hear and determine "all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11" as referred by the district court under Section 157(a). See also LR 265-1(a), N.D.Ga. In a core proceeding, the Court may enter a final order subject to review on appeal. If this suit is a non-core matter, the Court can still hear it in accordance with Section 157(c)(1), but absent consent of the parties, proposed findings of fact and conclusions of law as to dispositive matters, such as dismissal under Fed.R.Civ.P. 12(b)(6), would need to be submitted to the district court in the form of a recommendation. See generally THB Corp. v. Essex Builders Co. (In re THB Corp.), 94 B.R. 797, 803 (Bankr.D.Mass.1988); see also Providers Benefit Life Ins. Co. v. Tidewater Group, Inc. (In re Tidewater Group, Inc.), 734 F.2d 794, 796 (11th Cir.1984).
Core proceedings are defined in Section 157(b)(2)(A)-(O) in terms of a non-exclusive list of examples. By contrast, a non-core proceeding is a matter that is not a core proceeding but is "otherwise related to a case under title 11." See 28 U.S.C. § 157(b)(3). Plaintiff-Trustee's RICO claims against Wilbourn, who is not asserting a claim against this bankruptcy estate, do not readily fall within any of the categories of core proceedings set forth in Section 157(b)(2). The predominant view in the case law appears to support the conclusion that RICO claims are in the nature of non-core, related proceedings. See e.g. Barnett v. Stern, 909 F.2d 973, 979-81 (7th Cir.1990); Marill Alarm Systems, Inc. v. Equity Funding Corp. (In re Marill Alarm Systems, Inc.), 81 B.R. 119, 123 n. 8 (S.D.Fla.1987), aff'd without op., 861 F.2d 725 (11th Cir.1988).4 Undoubtedly, any recovery by Plaintiff in this action would affect the bankruptcy estate in terms of the amount of funds available for distribution to claim holders, but such an eventuality is not determinative.
The following test has been used in contrasting "core" and "related" or non-core proceedings:
If the proceeding does not invoke a substantive right created by the federal bankruptcy law and is one that could exist outside of bankruptcy it is not a core proceeding; it may be related to the bankruptcy because of its potential effect, but under section 157(c)(1) it is an `otherwise related\' or non-core proceeding.
Barnett, supra, 909 F.2d at 981, quoting Wood v. Wood (In re Wood), 825 F.2d 90, 97 (5th Cir.1987) (emphasis in original); see also Gower v. Farmers Home Administration (In re Davis), 899 F.2d 1136, 1140-41, reh'g denied, en banc, 908 F.2d 980 (11th Cir.), cert. denied, 498 U.S. 981, 111 S.Ct. 510, 112 L.Ed.2d 522 (1990) (). RICO claims do not invoke a substantive right provided by title 11 nor do they arise only in the context of a bankruptcy case. Barnett, supra, 909 F.2d at 981. Based on the above discussion, the Court concludes that Plaintiff's RICO claims against Wilbourn constitute a non-core matter.5
As previously noted, Wilbourn has also filed a motion for withdrawal of the reference of the above-styled adversary proceeding. See 28 U.S.C. § 157(d). Under Fed.R.Bankr.P. 5011(c), a motion to withdraw the reference does not automatically stay administration of this bankruptcy case or this adversary proceeding. Even though this motion has not been forwarded to the district court, this Court is not prohibited from acting and in fact is required to consider whether a claim has been sufficiently pled before such a motion is transmitted. Accordingly, those matters addressed herein are being considered before transmission of the motion to withdraw the reference to the district judge. See generally Auto Specialties Mfg. Co. v. Sachs (In re Auto Specialties Mfg. Co.), 134 B.R. 227, 228-29 (W.D.Mich. 1990); see also Solomon v. Security Pacific Bank Nevada (In re Nady), 138 B.R. 608, 610 (D.Nev.1992); Citicorp North America, Inc. v. Finley (In re Washington Mfg. Co.), 128 B.R. 198, 200-01 (Bankr.M.D.Tenn.1991).
Having addressed the jurisdictional nature of Plaintiff's claims, the Court will next consider Wilbourn's motion wherein he seeks the dismissal of Plaintiff's amended complaint pursuant to Fed.R.Bankr.P. 7012(b)(2), (3), and (6) or, in the alternative, a more definite statement of the allegations asserted against him so that he might frame a response. See Fed.R.Bankr.P. 7012(e). With respect to Counts I and II, Wilbourn argues that the amended complaint fails to state a claim under federal or state RICO because it does not adequately allege: (1) that Debtor was injured by conduct prohibited by RICO; (2) that Wilbourn was a member of an enterprise as defined under RICO law; (3) that such alleged enterprise had a connection to interstate commerce; and (4) that Wilbourn engaged in specific conduct constituting a pattern of racketeering activity. Wilbourn further contends that Count V (tortious interference with business relations) fails to state a claim against him because the allegations show that he took no such action in preventing or making more burdensome Debtor's performance under a certain subconcessionaire agreement.6
A motion to dismiss may be granted if it appears that the plaintiff could not possibly prove any set of facts consistent with the...
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