court erred in concluding that the bankruptcy court had jurisdiction or alternatively that the bankruptcy court should not have abstained from exercising jurisdiction over a prior pending state court action if the court conclude matter jurisdiction and whether this court's holding in in re national gypsum applied i would like during my argument more to focus on a different jurisdictional ground which i frankly think is easier for the court to grasp and that is the issue of mandatory abstention now there are a few key points that the court should keep in mind number one this was a prior pending state court action in the texas state court that was brought by mr cla eighteen months after the bankruptcy case was closed after mrs catone his creditors were fully paid and after the case was officially closed the there was no plan in place nothing to administer this was a state court action that brought claims really had nothing whatsoever to do with bankruptcy court it was purely state law causes of action  has questioned the texas state court's jurisdiction to hear those matters that is not at all in dispute nevertheless miskatonic filed the declaratory judgment action after the state court action had been filed in which she s declaration that mr claus's claims were barred by discharge the district court when it dealt with the issue of mandatory extension really only devoted a small portion of its opinion and basically said that we didn't meet the third element that this was a non core matter so it as centrally dispatched the argument that the bankruptcy court should have exercised mandatory abstention and what the district court reason was because  declaratory judgment action in which she sought a declaration that the claim was discharged it didn't matter what happened beyond that the district court was allowed to hear all of that the claims she made even claims that were based purely on state law defenses and in the court didn't have to state the problem with the district court's reasonings your honor is that just because the district court is not required to abstain on one claim doesn't mean it's not required to abstain over other claims and why wasn't the analysis concerning the settlement agreement which is basically what the bankruptcy court did why wasn't that coup or since it was a settlement that arose in the bankruptcy it affected the it's the state arguably well that's an excellent question your honor and mr glosson was not a party to that settlement agreement he's not bringing any claims from that settlement agreement he's not suing to enforce that settlement agreement his claims came from marion osha against whom he foreclosed in california the california court held that he is entitled to foreclose upon that interest in j and so he's bringing purely claims that he inherited when he foreclosed on marion oshie that these are two non parties essentially to the bankruptcy algo laws and mareena should a bankruptcy court found the settlement agreement that was entered into during the bankruptcy was a relief sir had broke loose of the fact prevented these new claims from going forward so why isn't that interpret it hinged on the interpretation of the settlement agreement i agree with you did the bankruptcy court never found that this was dischargeable under the discharge order it was focused on the settlement agreement but why isn't that cool or because the real it affected the administration of the estate well the finding was clearly erroneous because mr glaus his claims are do not depend whatsoever upon any order from the bankruptcy he was not a party to the settlement agreement his claims come from a california court that had nobody's questioning the jurisdiction of a california court to foreclose his interest on that on marrying of sheena's interest in the company so you just tell me the bankruptcy court was wrong maybe maybe it was but whether it was right or wrong doesn't go to whether the general issue is cool or not so why is the nature of that issue not cool or according to you then the nature of the algo laws its claims he's not suing under that that was a release to which he was not even a party his only claims come from what he got out of the california court that had nothing whatsoever to do with the bankruptcy mr was not a party to that agreement the order didn't directly affect him he was a party to an adversarial proceeding in that bankruptcy a separate adversary proceeding but not that particular order he did miss catona relies upon the in this it came up in a case that this court heard out of the same bankruptcy in re colossi you can have some core claims and non core claims that just because you have both doesn't mean the bankruptcy court can exercise jurisdiction over the whole thing that's what the required to abstain with regard to the issue of discharge and arguably the issue of that settlement agreement but at the very least it was required to abstain from all these other state laws offenses like statute of limitations and things like that we cited some cases for the proposition that you can extend that reasoning to extension the first to lower court cases in doing some research i found additional authorities out of actually the third circuit court of appeals agrees that in looking at a you have to look at each claim separately just because the bankruptcy court is not required to abstain on one claim doesn't mean it's not required to abstain on other claims in the cases in re exide out of the third circuit court of appeals five forty four of th ird one ninety six there the third circuit health each state court claim or move to bankruptcy court must be considered individually non core claims to not become core simply by virtue of being pursued in the same litigation as core c to really doesn't take issue with our extension argument other than claiming that the we didn't meet the non core requirement she also claims that there was no evidence on the sixth element of a mandatory abstention that the state court action can be timely and juda case while in that very same paragraph in her brief she concedes that yes it can because she even cite statistics which show that both the bankruptcy court and the texas state court are equally efficient at disposing claims if the court is not convinced that mandatory extension or jurisdiction doesn't apply then at the very least the doctrine of permissive abstention should apply and i won't go through each and every one of those elements but i would like to talk to several of them factor number one which was the effect or lack thereof on the administration of the state the state state had been closed for over a year and a half it's been fully administered whether thirteen thirty four d says any decision to abstain or not abstain made under the permissive statute is not reviewable by appeal in your honor i'm sorry i overlooked that and i'll address that in the supplemental briefing if i may that's about all i have to say in any event even if there was jurisdiction or if the court was not required to abstain then clearly it erred on the ruling on the merits as i mentioned the defense of judicial a stop which was not raised we've gotten into the in our briefing the problems with doing that but let me actually get to the merits of those claims the bankruptcy court reasoned that mr claus predecessor an interest on a separate issue was a party to that release and made statements in court that mary initiated didn't hold an interest in this company worldwide subsidies there was no evidence whatsoever that marion oshie or mr glaus ever made any statement like that or that mr claus or marion a shita were parties to any type of settlement agreement they were not they never released any claims those whether denise byrne and took inconsistent positions has nothing whatsoever to do with mr claus his claims because he's stepping into the shoes of mary no she didn't he got those from the california court as i said nobody is questioning the jurisdiction of really like this with i know it gets kind of confusing because you have a lot of different claims that get assigned but it's really no different than if this were a promissory note if miskatonic had executed a promissory note in favor of marion a she whether they were releases by denise byrne and along the way it really don't matter the fact of the matter is if mr claus went to california for close the judgment and became the holder of that promissory note he would absolutely be entitled what i think this court ever envisioned i have not been able to find a case where you are this far removed from bankruptcy you're a year and a half after the bankruptcy is closed it's a state court don't post confirmation there is no jurisdiction except for claims relating to the implementation of the plan well this doesn't affect the implementation of the plan or not nobody is challenging mr clause is not seeking to enforce rights under the plan he's not questioning the terms of the plan since the bankruptcy court never reached the issue of discharge and couldn't reach the issue of discharge this is a tremendous overly bro this is a different part of this is mr alford laws that i mean he has a chosen action he has a claim that he paid valuable money for and so really the history of the laws and catona litigation really should know have have no  is one particular claim in even though mr toner's counsel repeatedly brings up issues of mr clause a sign and other issues in litigation those should have no bearing on this  we have two cases on our docket dealing with golan's people there's a case pending in this court now where the briefing hasn't been completed what would make you all go away i mean have you ever been referred far  professional settlement counseling your own to the parties have engaged in settlement discussions yes they have not come to fruition recently within the last two or three months informal discussions among counsel would it help to get the court involved i am not sure about that your honor there is a great deal obviously of bad blood between the parties and perhaps but  were the source of funding for her chapter thirteen plan and alkalies was an active participant in her bankruptcy throughout the time the bankruptcy court approved settlement your honor is the one hundred approximately one hundred ninety five thousand dollars that became the monthly payments that were the source of her plan payments from two thousand and eight until the fall of two thousand and eleven when there was a second settlement in which mr goh lies his daughter denise vernon used company funds ws g funds to i'm going to estimate judge weight we never got that far in discovery but i think it's up proximately three hundred fifty to five hundred thousand dollars which is in the range within an order of magnitude of the judgment suggest to you judge that this is the whole point of this case is to create the leverage for rubbled the laws to make the other pending case go away both no objection got notice but made no objection to the two thousand and eight settlement got notice and made no objection to the two thousand and eleven settlement clearly had actual notice of lisa's bankruptcy in two thousand and eleven before the bankruptcy court approved the second settlement and before lisa received her discharge we know that because mary  i'm not saying she appeared i'm saying should person i'm sorry should personal knowledge of the bankruptcy it appears that she had personal knowledge of the bankruptcy going back as early as two thousand and eight attached as an exhibit attorneys motion for summary judgment is a letter from miss oshie his counsel in two thousand and eight confirming oh she does knowledge of the finances the said in compton the ninth circuit has said in gregory when a creditor a close claimant has actual knowledge of a debtors bankruptcy actually no it was in time to do something about it could have objected to lisa's receipt of these payments the payments that became the very word they didn't become they were the source of her chapter thirteen plan which means these payments were the source of her discharge and her fresh start everyone involved here it might be a different case if this was a clear creditor who didn't know about the bankruptcy it might be a different case if these were funds that were the source of her fresh start but this is the source of her fresh start and there's no policy reason why this creditor an active participant in her bankruptcy for years should be able to pull back the fresh start from her after he participated throughout the bankruptcy and watched these settlements be approved without objection and watch these payments be made to lisa the court that neither the bankruptcy court the district court did not err in not abstaining this was a core proceeding both because it's about the approval of bankruptcy courts approval of two settlements and because the events that happened happened inside the bankruptcy court during the administration of her bankruptcy now algal up areas how long does the jurisdiction last from t thousand and eight sat on if they go on forever it goes on your honor as long as is necessary to protect the implementation of the plan if this were about events that happened after the plan if it were events about events that happened after the discharge no there wouldn't be jurisdiction for that but this is about events that happened beginning alkalis says in the petition for his state court case he says these payments began in two thousand and seven before lisa filed a bankruptcy and then continued into two thousand and eight and two thousand and eleven throughout the time of the administration of her estate so how long does bankruptcy court jurisdiction continue well it continues judge as long as is necessary to effect the discharge post discharge complaints typically come on that but by definition they have to come up post discharge and for chapter eleven chapter thirteen debtors they typically come up after the plan is approved and often after the plan is implemented what matters is when did the events on which the claims are based occur and as long as those events occur pre partition as they did here and during the course of the bankruptcy the bankruptcy jurisdiction continues and if the court never dealt with the question of whether the discharge order applied here i understand you're saying that still gives you jurisdiction to that's a wage and for jurisdiction you just look at whether a non frivolous claim is alleged but then in deciding whether what the bankruptcy decided actually decided was core non core there do we need to look at this issue surrounding the settlement agreement i think you do judge i think this court should look to the this court's all of the appellate courts well settled rule that this court can affirm on any basis in the record in any base is supported in the record this court could affirm on the basis of discharge this court could affirm on the basis of latches which is i think just a step away from the discharge this court could affirm on the grounds that were stated in misca town as motion for s judgment or the grounds the bankruptcy court relied on and the district court affirmed i think if you look at the settlement agreement judge and ask could denise vernon have asserted these claims the answer is clearly no the settlement the release the scope of the release couldn't be broader it expressively says the most comprehensive release of matters relating to debbie u s g a allowed by law the whole reason i suggest to you that denise vernon is not the plaintiffs or claimant is because the go laws litigation side knew well that would never get off the ground denise vernon simply couldn't assert these claims alkalis says he stepped into the shoes of mariano shita but he stepped into two sets of shoes he took the oh she declaims true enough but he got them through denise vernon and denise vernon inescapably is in his chain of title and because she's in his chain of title he takes these claims subject to the defenses that would apply against her it doesn't matter that the defenses are based on state law this court said in morrison versus western builders that when the court considers a core proceeding relating to a debt the court can decide as a part of that jurisdiction the court can decide the very existence and validity of the debt it's a bankruptcy court after all the whole point of the of the bankruptcy court and b jurisdiction is deciding the debts that are road that are not owed and adjusting the payment of those debts so there is core jurisdiction arising under because under this court's decision in morse and vs western builders the discharge issue is squarely before the lower courts and it's now squarely before you finally i would urge the court to consider mr glosses statement of issues because for mr goss his complaints about the merits of the lower court's decision there's simply not raised by his statement of issues in  in the initial appeal and under this court's decision i think it's in rema combs those issues are waived thank you your honour's judge kosta you raise the issue earlier of whether the interpretation of the settlement agreement confers jurisdiction is that core jurisdiction and will respectfully disagree on that point but even if it is even if the bankruptcy bankruptcy court did have the jurisdiction to hear the issue of discharge and the interpretation of its order that's the limit it was required to abstain on the other claims the claim is clearly not it was not provided for in the chapter thirteen plan the settlement agreement clearly does not apply neither oshie to nor of the laws were parties to that agreement what claims beyond saying the settlement agreement release these claims what did the bankruptcy court decide that it should and well it also decided the issue of traditionalist up well my point being the bankruptcy court was wrong on those issues it was not discharged the settlement agreement does not bar the cause of the claim the bankruptcy court clearly completely immaterial the fact that the bankruptcy court might have a so called approved the distributions of which mr claus is complaining i would point out there is no evidence in the record of that that each particular distribution to lisa catona was approved by the bankruptcy court that's not in the record second neither alga laws and in more so marion oshie to were involved in that particular aspect of the case at best al the last was a defendant in a separate adversary action and marion oh she was never a party the extent of her parents was a telephone call after the the claims deadline in which the bankruptcy court reassured her that her appearance was not necessary and that her rights would not be affected so for those reasons we asked if the court is convinced that there is jurisdiction i would submit that at the very least the bankruptcy court should have limit its rulings to the discharge issue perhaps the settlement agreement issue those clearly do not bar the state state law claims it should have ruled that way and then abstain for the remainder of it if you're convinced there's jurisdiction building clearly the court erred ingraining summary judgment on these defenses the issue was not waived that the whole point of the designation of issues is simply to give the other party notice of what you're going to be arguing so they can designate appropriate parts of the record ms could tone is not arguing that somehow we us not being more specific in our statement of issues prevented her from bringing materials before the court or that there's an incomplete record so we respectfully request that the court and she was not your honor the the only relationship of course other than being a business partner partner to laws at some point she was i believe his legal assistant before they became business partners but no blood relation you