Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01327/USCOURTS-azd-2_09-cv-01327-3/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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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

In re Gorilla Companies LLC, et al., 

Debtors. _________________________________

Gorilla Companies, LLC, a Delaware

limited liability company,

Plaintiff, 

vs.

Sharon Van Tassel, and Darrell Van

Tassel, husband and wife; Robb M.

Corwin and Jillian C. Corwin, husband

and wife; 13, LLC, an Arizona limited

liability company; and 13 Holdings,

LLC, an Arizona limited liability

company,

Defendants. 

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No. CV-09-1327-PHX-DGC

No. AP-09-00507-RJH

No. BK-09-02898-RJH

No. BK-09-02901-CGC

No. BK-09-02903-GBN

No. BK-09-02905-CGC

ORDER

Gorilla Companies LLC (“Gorilla”) is a debtor-in-possession currently under chapter

11 bankruptcy. In re Gorilla, No. BK-09-02898-RJH (Bankr. D. Ariz. Feb. 20, 2009).

Gorilla filed an adversary pleading in the bankruptcy case. Doc. 1, Gorilla v. Van Tassel,

No. AP-09-00507-RJH (Bankr. D. Ariz. May 8, 2009). The adversary complaint alleges that

Sharon Van Tassel, a former employee, misappropriated funds from one of Gorilla’s whollyowned subsidiaries. Id.

Case 2:09-cv-01327-DGC Document 21 Filed 10/14/10 Page 1 of 3
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1

 Gorilla cites In re Cutter, 398 B.R. 6, (9th Cir. BAP 2008), but there is no indication

in Cutter that the two cases align procedurally. Because the procedural posture controls the

method of review, compare 28 U.S.C. §§ 157(b)(1) and (c)(2) with § 157(c)(1), Gorilla’s

argument is unpersuasive.

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Van Tassel commenced this action by filing a motion to withdraw the reference from

bankruptcy court. Doc. 1, Gorilla v. Van Tassel, No. CV-09-01327-PHX-DGC (D. Ariz.

June 19, 2009). The Court denied that motion and a subsequent one filed by Defendants

(Doc. 12) without prejudice. Docs. 11, 16.

On August 17, 2010, Gorilla filed a notice of no objection to withdrawal of the

reference and a request for a final pretrial conference. Doc. 17. Gorilla states that the

bankruptcy court has issued its summary judgment rulings, that certain tort and other claims

remain against Defendants (other than 13 Holdings, LLC), and that those claims are ready

for a jury trial in this Court. Id. On September 16, 2010, this Court issued an order directing

Defendants to file a response to Gorilla’s notice. Doc. 18. Defendants filed the response

(Doc. 19) and Gorilla replied (Doc. 20). 

Defendants concur in withdrawal of the reference as to the Van Tassels, 13, LLC, and

13 Holdings, LLC, and request a settlement conference. Doc. 19 at 4. Defendants Van

Tassels and 13, LLC also ask the Court to rule on their objections to the bankruptcy court’s

denial of summary judgment and denial of a motion to compel discovery against third-party

National Bank of Arizona. Id. at 2, 3. Defendants contend that they are entitled to de novo

review on the summary judgment ruling and at least clear-error review on the discovery

ruling. Id. Gorilla objects, arguing that the only means by which this Court can review the

bankruptcy court’s decisions is on appeal under Federal Rules of Bankruptcy Procedure

8001(b) and 8003. Doc. 20 at 3. The Court disagrees with Gorilla.1

Federal law allows bankruptcy courts to hear matters that are noncore but related to

a title 11 case. 28 U.S.C. § 157(c)(1). Under § 157(c)(1), the district court shall consider the

bankruptcy court’s proposed findings of fact and conclusions of law in entering a final order

or judgment in such proceedings, and shall review de novo “those matters to which any party

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has timely and specifically objected.” Id. This Court previously deemed the adversary

proceeding to be noncore and related to a title 11 case, and exercised its discretion under

§ 157(c)(1) and § 157(d) to continue the reference in bankruptcy court. Doc. 11 at 8, 9.

Accordingly, the Court will review de novo the bankruptcy court decisions to which

Defendants filed timely objections.

IT IS ORDERED that reference of the adversary proceeding (Doc. 17) is withdrawn.

The Parties shall appear at a status conference on November 9, 2010 at 4:00 p.m. The

purpose of the status conference will be to discuss Defendants’ request for a settlement

conference, what if any briefing should be permitted on Defendants’ objections, and

scheduling of a final pretrial conference.

DATED this 14th day of October, 2010.

Case 2:09-cv-01327-DGC Document 21 Filed 10/14/10 Page 3 of 3