MATTER OF BRUFFEY, Bankruptcy No. 80-00642-SW

• Decision Date: 24 August 1981
• Docket Number: Adv. No. 80-0243-SW.,Bankruptcy No. 80-00642-SW,80-00643-SW
• Citation: 16 BR 171
• Parties: In the Matter of Thomas Blair BRUFFEY and Rubye Kathleen Bruffey, Debtors. ITT DIVERSIFIED CREDIT CORPORATION, Plaintiff, v. Thomas Blair BRUFFEY and Rubye Kathleen Bruffey, Defendants.
• Court: U.S. Bankruptcy Court — Western District of Missouri

16 B.R. 171 (1981)

In the Matter of Thomas Blair BRUFFEY and Rubye Kathleen Bruffey, Debtors ITT DIVERSIFIED CREDIT CORPORATION, Plaintiff, v. Thomas Blair BRUFFEY and Rubye Kathleen Bruffey, Defendants.

Bankruptcy Nos. 80-00642-SW, 80-00643-SW, Adv. No. 80-0243-SW.

United States Bankruptcy Court, W.D. Missouri, Southwestern Division.

April 13, 1981.

As Amended August 24, 1981.

Charles Buchanan, Joplin, Mo., for plaintiff.

Phillip Glades, Joplin, Mo., for defendants.

ORDER ABSTAINING FROM JURISDICTION AS PROVIDED IN § 1471(d), TITLE 28, UNITED STATES CODE AND TRANSFERRING ACTION TO THE CIVIL DOCKET OF THE DISTRICT COURT PURSUANT TO RULE 915(b) OF THE RULES OF BANKRUPTCY PROCEDURE

DENNIS J. STEWART, Bankruptcy Judge.

In this action, the plaintiff seeks leave of the bankruptcy court to liquidate certain property¹ which it has attached in connection with proceedings in the state courts of Maryland. The defendant trustee in bankruptcy counterclaims for possession of the property, contending that it is property of the estate in bankruptcy under § 541 of the Code.²

In this court, the action has been made the subject of several hearings, several factual stipulations, and several briefs.³ But, according to the court's current understanding, based upon statements made by counsel in the last hearing conducted by this court,⁴ the material issue to be resolved by the court is whether, under governing Maryland law, the prejudgment attachment which had been made by the plaintiff was released by the rendition of a judgment by the Maryland court which made no provision for disposition of the attached property.⁵

On this question generally, there is a split of authority, with some courts holding that the failure of the court to provide for the attached property in the judgment releases the attachment⁶ and others holding to the contrary.⁷ Even with respect to the reasoning underlying the conclusions of the respective cases, the courts are also equally divided with some holding that release of the attachment should result only when such is dictated by a governing statute and others holding that release is dictated by the rule of reason.⁸ According to the briefs which have been submitted by the parties and the research which has been independently conducted by the court, there is no Maryland statute or decision which would dictate a certain result in this action.

Rather, it appears that what is before the court is an undecided and unresolved question of state law. On such questions, the appellate courts have previously accorded a presumption of correctness to determinations made by district judges.⁹ Thus, practically speaking, it appears that the decision of a district judge on this issue would be insulated from reversal on appeal and, accordingly, that the matter could be most expeditiously, justly and inexpensively concluded if it were determined by a district judge. For, on the other hand, if the bankruptcy court should retain jurisdiction of this action, its decision would appear not to be entitled to the presumption of correctness and, to the contrary, would be reviewable under the simple "legal error" standard.¹⁰ Further, once reviewed under such a standard by the district court, it appears that the district court's decision might well, like any other appellate decision, be in turn reviewable under the simple "legal error" standard.¹¹ Thus, unless the appropriate district court¹² renders the decision in this action, it appears that its outcome may be further protracted by successive appeals and the time that is required to determine the legal issue anew on each of those appeals.

This prospect, however, appears to be remediable by appropriate orders in this court. The Bankruptcy Code contains an express exception to the new, expansive jurisdiction granted the bankruptcy courts in the unreviewable power of the court of bankruptcy to abstain from entertaining any action when it would be in the best interest of the estate not to do so. See § 1471(d), Title 28, United States Code.¹³ The circumstances detailed above would make it appear that abstention would be desirable for the estate and the creditors in this action and therefore in the interest of justice. And this refusal of jurisdiction would appear to bring into applicability Rule 915(b) of the Rules of Bankruptcy Procedure which would provide for transfer to the district court which has jurisdiction of the action under § 1471, Title 28, U.S.C. It is therefore

ORDERED that the bankruptcy court abstain from jurisdiction as provided in § 1471(d) of the Bankruptcy Code¹⁴ and it is further

ORDERED that the clerk transfer this action to the civil docket of the district court pursuant to Rule 915(b) of the Rules of Bankruptcy Procedure.

1 The property which constitutes the subject matter is a promissory note in the sum of $85,000 and certain described real property.

2 The trustee contends that the attachment was either not perfected prior the date of the order for relief in these bankruptcy proceedings or, if it was, the attachment was dissolved prior to that time. Thus, prior to bankruptcy, the property reverted in the debtors and, consequently, by operation of § 541, became property of the estate as of the date of the order for relief in these bankruptcy proceedings.

3 The briefs generally concern themselves with issues other than the issue of whether the attachment was released when no provision was made for it in the final judgment of the Maryland court. But see note 4, infra.

4 In the hearing conducted on January 12, 1981, the court asked counsel whether the issue of release of the attachment by failure of the Maryland court to provide for it in the final judgment was not the only issue in this action. Replies were in the affirmative.

5 The issue which has been joined in this action is outlined as follows in 7 C.J.S. Attachment § 216, p. 516: "In some states, a judgment for plaintiff in attachment is required to contain an order for special execution against, or sale of the attached property, and a general judgment and execution releases the lien of the attachment; but in others such an order, although customarily made, is not generally regarded as essential, and the lien of attachment is not discharged by a general judgment and execution."

6 Some cases hold that "as an attachment is purely ancillary to a suit, if the court entered judgment for the amount of plaintiff's claim, and made no order as to the attached effects, the attachment would be considered as released." 7 C.J.S. Attachment section 216, p. 516 (1980); Jennings v. Wysong, 276 Ala. 692, 166 So.2d 420 (1964); Kaylor v. Davy Pocahontas Coal Co., 118 Va. 369, 87 S.E. 551 (1916)....