Topfer v. Topfer (In re Topfer)

Decision Date25 July 2018
Docket NumberAdversary No.: 5-18-ap-00066 RNO,Case No.: 5-18-bk-01966 RNO
Citation587 B.R. 622
Parties IN RE: Kurt Alan TOPFER, Debtor 1 Kurt Alan Topfer, Plaintiff(s) v. Evelyne Ruetimann Topfer, Defendant(s) Evelyne Ruetimann Topfer, Movant(s) v. Kurt Alan Topfer and Robert P. Sheils, Jr., Chapter 7 Trustee, Respondent(s)
CourtU.S. Bankruptcy Court — Middle District of Pennsylvania

Kurt Alan Topfer, Mountaintop, PA, pro se.

Lisa M. Doran, Doran & Doran, P.C., Wilkes-Barre, PA, for Defendant.

Nature of Proceeding: Motion for Remand

Nature of Motion for Relief from Automatic Proceeding: Stay


Robert N. Opel, II, Chief Bankruptcy Judge

The Chapter 7 Debtor removed a state court divorce action to the Bankruptcy Court. His wife, the plaintiff in the state court, moved to remand the matter. She also sought relief from the automatic stay to have the state court determine equitable distribution and other marital issues. I will permissively abstain from hearing the divorce action, which will be remanded to State Court. Limited relief from the automatic stay will be granted to the Debtor's wife.


Kurt Alan Topfer ("Kurt") filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code on May 9, 2018. Kurt is self-represented and filed schedules and statements along with his bankruptcy petition. Voluntary Petition for Individuals Filing for Bankruptcy and Schedules A through J and Summary of Schedules, May 9, 2018, BK ECF No. 1 ("Petition").

On June 6, 2018, Kurt commenced an Adversary Proceeding by filing a Notice of Removal. Notice of Removal, June 6, 2018, AP ECF No. 1 ("Removal Notice"). The Removal Notice relates to a pre-petition divorce action against Kurt filed by Evelyne R. Topfer ("Evelyne"). The divorce action was filed to Number 384 of 2015 in the Court of Common Pleas of Luzerne County ("State Court"), the Pennsylvania trial court ("Divorce Action").

After the Removal Notice was filed with this Court, an Order was entered directing Kurt to file with the Bankruptcy Clerk the complete docket and the pleadings filed in the Divorce Action. Pursuant to Federal Rule of Evidence 201, I take judicial notice of matters not reasonably subject to dispute in the docket in the underlying Chapter 7 bankruptcy case and in the Adversary Proceeding where the Removal Notice is pending. It is noted that copies of the State Court documents filed to the Adversary Proceeding total more than 140 in number.

In the Adversary Proceeding, Evelyne responded to the Removal Notice by filing a Motion for Remand of Removed Case. Mot. for Remand of Removed Case, June 28, 2018, AP ECF No. 14 ("Remand Motion"). The Remand Motion seeks remand of the Divorce Action to the State Court.

An Order was entered requiring that any objection to the Remand Motion be filed by July 13, 2018. Kurt did not file a timely objection to the Remand Motion. A hearing was held on the Remand Motion on July 20, 2018, and at that time Evelyne's counsel and Kurt presented argument. Most of Kurt's argument suggested that the State Court had not fairly handled the Divorce Action.

On July 2, 2018, Evelyne filed a Motion for Relief from Stay in the Chapter 7 bankruptcy case. Mot. for Relief from Automatic Stay to Allow Equitable Distribution to Proceed in State Court and to Conclude Divorce Action, July 2, 2018, BK ECF No. 21 ("RFS Motion"). Essentially, the RFS Motion alleges that there is cause to grant relief from the automatic stay imposed by 11 U.S.C. § 362(a) of the Bankruptcy Code2 to allow Evelyne to proceed with the Divorce Action, and have the State Court determine the "issues of equitable distribution, alimony, and attorney fees and costs between the parties." RFS Motion, ¶ 23 BK ECF No. 21.

A deadline was set requiring that objections to the RFS Motion be filed by July 16, 2018. Kurt did not file any timely response to the RFS Motion. A hearing was held on the RFS Motion on July 20, 2018, at which time Kurt argued, in part, that I should "fast track" the Divorce Action and decide it.

The July 20, 2018, proceeding was a consolidated hearing on the Remand Motion and the RFS Motion. The matters are now ripe for decision.


The Court has jurisdiction over these matters pursuant to 28 U.S.C. §§ 157 and 1334. The Divorce Action is a non-core related to proceeding. The RFS Motion is a core proceeding under 28 U.S.C. § 157(b)(2)(G). At the time of the July 20, 2018 hearing, both counsel for Evelyne and Kurt consented to my entry of final judgments or orders concerning the Remand Motion and the RFS Motion.

A. Removal and Remand

The Divorce Action might be remanded to State Court pursuant to two of the jurisdictional provisions which grant decision-making authority to bankruptcy courts.

Decisions to remand removed actions back to state court frequently consider the principle of abstention.

28 U.S.C. § 1334(c)(2) provides:

(2) Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. (emphasis added)

This provision is commonly referred to as mandatory abstention. This provision governs the situation where the bankruptcy court must abstain. Stoe v. Flaherty , 436 F.3d 209, 215 (3d Cir. 2006) ; In re Donington, Karcher, Salmond, Ronan & Rainone, P.A. , 194 B.R. 750, 757 (D.N.J. 1996).

Alternatively, a bankruptcy court may abstain, "in the interest of justice, or in the interest of comity with State courts or respect for State law." 28 U.S.C. § 1334(c)(1) ; In re 19-21 N. George, Inc. , 2011 WL 1841556, at *4 (Bankr. M.D.Pa., May 13, 2011) ; In re Kessler , 430 B.R. 155, 165-166 (Bankr. M.D.Pa. 2010). This is referred to as permissive abstention.

Whether I am considering mandatory or permissive abstention, an important component of the analysis is the type of jurisdiction I have with respect to the Divorce Action. In the next section, I will examine the extent of my jurisdiction and then return to the abstention questions.

B. Jurisdiction

Like all Federal courts, bankruptcy courts are courts of limited jurisdiction. Bankruptcy courts have the limited authority vested in them by Congress within certain Federal statutes. In re Resorts Intern., Inc. , 372 F.3d 154, 161 (3d Cir. 2004) ; also see Smalis v. City of Pittsburgh School District , 556 B.R. 703, 709-710 (W.D.Pa. 2016) ; In re Remington Develop. Group, Inc. , 180 B.R. 365, 372 (Bankr. D.R.I. 1995).

"Bankruptcy jurisdiction extends to four types of title 11 matters: (1) cases ‘under’ title 11; (2) proceedings ‘arising under’ title 11; (3) proceedings ‘arising in’ a case under title 11; and (4) proceedings ‘related to’ a case under title 11." Stoe , 436 F.3d at 216 ; Donington , 194 B.R. at 757-758.

The Bankruptcy Court's jurisdiction is most fulsome in two types of matters. First, where the cause of action arises under a specific provision of the Bankruptcy Code. For example, an adversary proceeding to avoid an alleged preferential transfer under § 547(b) of the Bankruptcy Code. Second, fulsome jurisdiction would exist for a type of proceeding which would only arise in a bankruptcy proceeding. For example, an objection to a claimed exemption as provided for by Fed. R. Bankr. P. 4003(b).

I completed a summary review of copies of the Divorce Action documents which were filed as exhibits in the Adversary Proceeding. After review, I conclude that the matter presents family law questions which should be decided under Pennsylvania substantive law. The Divorce Action does not invoke any substantive provision of the Bankruptcy Code, nor any provision of the Federal Rules of Bankruptcy Procedure. Further, the Divorce Action is clearly not the type of matter which would only arise in a bankruptcy proceeding.

In the statutory jurisdictional scheme for bankruptcy matters, Congress gave bankruptcy courts plenary authority over certain matters, and more limited authority over other matters. This distinction is codified in 28 U.S.C. § 157. That provision gives bankruptcy judges the authority to hear and render judgments in matters which are "core proceedings."

28 U.S.C. § 157(b)(2) provides an illustrative list of core proceedings, including, "matters concerning the administration of the estate," "allowance or disallowance of claims against the estate or exemptions from property of the estate," "orders in respect to obtaining credit, proceedings to determine, avoid or recover preferences," and, "motions to terminate, annul or modify the automatic stay."

Bankruptcy courts utilize a review process to determine if the claim at issue is a core proceeding. The first step is to refer to 28 U.S.C. § 157(b) to determine if the claim fits within the provision's illustrative list of core proceedings. A proceeding is core if it invokes a substantive right provided by the Bankruptcy Code or, if it is a proceeding "that by its nature, could arise only in the context of a bankruptcy case." In re Winstar Commc'ns, Inc. , 554 F.3d 382, 405 (3d Cir. 2009) ; Donington , 194 B.R. at 758-759.

There is a broader universe of claims over which a bankruptcy court has more limited authority. A bankruptcy court may hear a non-core proceeding, but absent the consent of the parties, a bankruptcy court may not enter a final judgment and may only submit proposed findings of fact and conclusions of law that are subject to de novo review by the district court. 28 U.S.C. § 157(c)(1) ; In re Winstar Commc'ns, Inc. , 554 F.3d at 405 ; In re Exide Techs. , 544 F.3d 196, 205-206 (3d Cir. 2008) ; In re Kessler , 430 B.R. at 163.

I have already concluded that the Divorce Action does not arise under a provision of the ...

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