Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-01245/USCOURTS-azd-2_10-cv-01245-0/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

In re:

Elizabeth Woldrich,

Debtor.

Ticor Title Insurance Co., 

Plaintiff, 

vs.

Elizabeth Woldrich, 

Defendant. 

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No. CV-10-1245-PHX-GMS

BK-08-17307-PHX-RJH

Adv. No. 09-242-PHX-RJH

ORDER

Pending before this Court is Plaintiff’s Motion for Withdrawal of Reference of its

adversary proceeding from the bankruptcy court. (Doc. 2). For the reasons set forth below,

Plaintiff’s Motion is denied without prejudice. 

BACKGROUND

On December 1, 2008, Defendant Elizabeth Woldrich (“Defendant”), filed for Chapter

7 bankruptcy. (Doc. 2 at 4). Plaintiff Ticor Title Insurance Co. (“Plaintiff”), timely filed an

adversary proceeding in the bankruptcy court asserting that, pursuant to 11 U.S.C. §

523(a)(2) and (6), a debt allegedly owed by Defendant to Plaintiff should not be discharged

because of fraud. Id. Plaintiff alleges that Defendant provided a forged Release and

Reconveyance upon which Plaintiff relied and was subsequently harmed. Id. Plaintiff timely

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filed a request for a jury trial on the issues of liability and damages. It does not, however,

seek a jury trial on the issue of dischargeability of the debt. Id. at 4, 6. Defendant contends

that Plaintiff is not entitled to a trial by jury. (Doc. 6, p. 3). Plaintiff now moves for

withdrawal of the adversary proceeding to the District Court pursuant to 28 U.S.C. § 157(d).

(Doc. 2).

LEGAL STANDARD

28 U.S.C. § 157 states, “Each district court may provide that any or all cases under

title 11 and any or all proceedings arising under title 11 or arising in or related to a case

under title 11 shall be referred to the bankruptcy judges for the district.” 28 U.S.C. § 157(a).

This District refers all bankruptcy cases to the bankruptcy court. See General Order 01-15

(June 29, 2001). However, district courts “may withdraw, in whole or in part, any case or

proceeding referred [to the bankruptcy court] under this section, on its own motion or on

timely motion of any party, for cause shown.” 28 U.S.C. § 157(d). 

When determining whether there is cause to withdraw, “a district court should

consider the efficient use of judicial resources, delay and costs to the parties, uniformity of

bankruptcy administration, the prevention of forum shopping, and other related factors.” Sec.

Farms v. Int’l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers, 124 F.3d 999, 1008

(9th Cir. 1997) (citing In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993). Further,

courts “should first evaluate whether the claim is core or non-core, since it is upon this issue

that questions of efficiency and uniformity will turn.” In re Orion, 4 F.3d at 1101 (cited

approvingly by the Ninth Circuit in Sec. Farms, 124 F.3d at 1008). “[H]earing core matters

in a district court could be an inefficient allocation of judicial resources given that the

bankruptcy court generally will be more familiar with the facts and issues”, and “may enter

appropriate orders and judgments.” Id. (internal quotation and citation omitted). 

A bankruptcy judge may only conduct a jury trial if specially designated to do so by

the district court and with the express consent of all the parties. See 28 U.S.C. § 157(e).

Consequently, a demand for a trial by jury may have the effect of mandating withdrawal to

the district court for trial. See Growe ex rel. Great Northern Paper, Inc. v. Bilodard Inc., 325

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B.R. 490, 492 (D. Me. 2005). “However, it does not follow that withdrawal must be granted

as a matter of course at any point during a proceeding in which a jury demand is made.” Id.

“Only by allowing the bankruptcy court to retain jurisdiction over the action until trial is

actually ready do we ensure that our bankruptcy system is carried out.” In re

Healthcentral.com, 504 F.3d 775, 788 (9th Cir. 2007). “Thus, a court may deny a motion

to withdraw on the basis of a jury demand while allowing the movant to renew the motion

when the bankruptcy court certifies that the adversary proceeding is ready for trial.” Growe

ex rel., 325 B.R. at 492. 

DISCUSSION

Plaintiff seeks a determination that Defendant’s alleged debt owed to Plaintiff should

not be discharged in bankruptcy because of fraud. Section 157 clearly states that

“determinations as to the dischargeability of particular debts” are core proceedings. 28

U.S.C. § 157(b)(2)(I). It is also clear that “there is no right to a jury trial in an adversary

proceeding to determine whether a debt is dischargeable.” In re Locke, 205 B.R. 592, 599

(9th Cir. BAP 1996) (citing In re Hooper, 112 B.R. 1009, 1012–13 (9th Cir. BAP 1990)).

The bankruptcy court is already familiar with the facts and issues of this case, and Plaintiff

does not seek a jury trial as to the issue of dischargeability. 

Plaintiff believes the determination of whether Plaintiff has a right to a jury trial for

its underlying fraud claim is separate from whether this Motion for Withdrawal should be

granted. While that may be, since it is not clear whether a trial on the issues of liability and

damages is necessary, the Court need not determine at this time whether Plaintiff is entitled

to a jury trial. See In re Hooper, 112 B.R. at 1013 (“[T]he bankruptcy court found the debt

dischargeable and did not reach the damages question.”). The Court notes that the parties

have submitted Statements of Position to the bankruptcy court concerning whether this Court

or the bankruptcy court should decide whether Plaintiff is entitled to a jury trial. The

necessity of deciding the question will become apparent when the bankruptcy court rules on

the dischargeability issue. The bankruptcy court is then fully capable of determining whether

Plaintiff has a jury right on the liability and damages questions. If it does, the reference will

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then be withdrawn as to these issues. Plaintiff’s Motion for Withdrawal of Reference is

premature. 

IT IS THEREFORE ORDERED:

1. Plaintiff’s Motion for Withdrawal of Reference (Doc. 2) is DENIED without

prejudice.

2. The Clerk of the Court is directed to TERMINATE this action.

DATED this 6th day of August, 2010.

Case 2:10-cv-01245-GMS Document 9 Filed 08/06/10 Page 4 of 4