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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

IN RE DZIERZAWSKI, 

 Bankruptcy Case No. 13-47986 

 Adversary Proceeding No. 14-05199 

Debtor, HON. THOMAS J. TUCKER 

RANDY K. DZIERZAWSKI, 

 

 Appellant, Civil Action No. 14-CV-14615 

vs. HON. MARK A. GOLDSMITH 

VULPINA, LLC, 

 

 Appellee. 

and 

KIMBERLY DZIERZAWSKI, 

 

 Appellant, Civil Action No. 14-CV-14734 

 HON. MARK A. GOLDSMITH 

vs. 

VULPINA, LLC, 

 Appellee. 

_______________________________/ 

OPINION AND ORDER DENYING WITHOUT PREJUDICE MOTIONS TO 

WITHDRAW THE REFERENCE (Dkts. 1, 8) 

I. INTRODUCTION 

 Presently before the Court are motions to withdraw the reference to the bankruptcy court, 

filed by husband and wife Appellants Randy and Kimberly Dzierzawski. The briefing is 

complete on these motions, and the Court held a hearing on April 23, 2015. For the reasons 

discussed below, the Court denies the motions without prejudice. 

 

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II. FACTUAL BACKGROUND 

 On December 28, 2012, Vulpina, LLC (“Vulpina”) filed a complaint in this Court against 

Randy and Kimberly Dzierzawski and Vinifera Wine Co., LLC (“Vinifera”), seeking to avoid 

and recover an allegedly fraudulent transfer made from Randy to his wife, Kimberly. See 

Vulpina v. Dzierzawski, No. 12-15688, Am. Compl. (Dkt. 6). Vulpina’s Complaint raised 

allegations that Randy had transferred 99% of his shares in Vinifera to Kimberly for less than 

adequate consideration, in an attempt to avoid a monetary judgment entered against him, 

assigned to Vulpina, and on which Vulpina was attempting to collect. See id. 

 On April 19, 2013, Randy filed for Chapter 7 voluntary bankruptcy. See In re 

Dzierzawski, No. 13-47986. In May 2013, Randy and Vinifera filed a notice of the Chapter 7 

bankruptcy proceeding and automatic stay of litigation in the civil case against them. Vulpina, 

No. 12-15688, Notice (Dkt. 19). Vinifera was subsequently terminated from the litigation on its 

motion to dismiss. Id., 6/13/2013 Op. & Order (Dkt. 22). Thereafter, Kimberly filed a motion to 

stay, id., Mot. to Stay (Dkt. 24), which was granted, and the case was administratively closed, 

id., 10/15/2013 Op. & Order (Dkt. 28). 

 In November 2014, Vulpina filed an adversary proceeding in Randy’s bankruptcy case, 

naming Randy and Kimberly as defendants, seeking to avoid and recover the same allegedly 

fraudulent transfer at issue in Vulpina’s previous civil case. See In re Dzierzawski, No. 13-

47986, Adversary Case No. 14-05199 (Dkt. 206). In December 2014, Randy filed a motion in 

this Court to withdraw the reference to the bankruptcy court. In re Dzierzawski, No. 14-14615, 

Debtor Mot. to Withdraw (Dkt. 8) [hereinafter Debtor Mot. to Withdraw]. Kimberly also filed a 

motion and joinder with Randy’s motion to withdraw the reference. In re Dzierzawski, No. 14-

14734, Appellant Mot. to Withdraw and Joinder (Dkt. 1) [hereinafter Appellant Mot. to 

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Withdraw].1 

III. ANALYSIS 

 Pursuant to this District’s Local Rules, “all cases under Title 11 of the United States Code 

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

are referred to bankruptcy judges,” unless otherwise withdrawn. E.D. Mich. LR 83.50. Title 11 

sets forth grounds for both mandatory and permissive withdrawal, see 28 U.S.C. § 157(d), and 

the Dzierzawskis submit that, under the circumstances, the latter is appropriate here. 

The Court may withdraw “in whole or in part, any case or proceeding . . . for cause 

shown.” Id. What constitutes sufficient “cause” to withdraw a matter is not defined in the 

statute, and the Sixth Circuit appears not to have addressed the issue. However, courts in this 

District have identified several factors to consider: (i) whether a claim is core or non-core; 

(ii) the promotion of judicial economy; (iii) minimizing delay and costs to parties; (iv) the 

uniformity of bankruptcy administration; (v) discouraging forum-shopping; and (vi) any other 

related factors. Venture Holdings, Co., LLC v. Winget, No. 05-73639, 2006 WL 800790, at *1 

(E.D. Mich. Mar. 6, 2006) (citing In re Burger Boys, 94 F.3d 755, 762 (2d Cir. 1996)); see also 

In re Motions to Withdraw Reference in Various Cases, Nos. 12-11555-11560, 12-11563-11565, 

2012 WL 5381208, at *7 (E.D. Mich. Oct. 31, 2012) (most courts consider whether the claim is 

core or non-core before turning to considerations of (i) judicial economy; (ii) uniformity in 

bankruptcy administration; (iii) forum-shopping; (iv) economical use of debtor and creditor 

resources; (v) expediting the bankruptcy process; and (vi) the presence of a jury demand (citing 

In re Appalachian Fuels, LLC, 472 B.R. 731, 737 (E.D. Ky. 2012))). 

 

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 Kimberly’s motion joins in Randy’s motion and incorporates his arguments and analysis in 

their entirety. Appellant Mot. to Withdraw at 2. 

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 The Dzierzawskis argue permissive withdrawal is appropriate here because (i) fraudulent 

transfer proceedings are non-core, and (ii) the Dzierzawskis have demanded a jury trial and do 

not consent to have the trial conducted by the bankruptcy judge. Debtor Mot. to Withdraw at 6. 

Because the matter will ultimately have to be withdrawn for the Court to conduct a jury trial, 

they argue that judicial economy is best served by immediate withdrawal. Id. at 14-15. Vulpina 

disputes that a fraudulent transfer proceeding is non-core, but appears to concede that should the 

matter proceed to trial, it will ultimately have to be withdrawn. Resp. at 6-10 (Dkt. 9). 

Nonetheless, Vulpina contends that the Dzierzawskis’ jury demand does not warrant withdrawal 

at this time and urges the Court to consider, as other courts in this District have (i) whether the 

case is likely to reach trial, (ii) the likelihood of protracted and lengthy discovery, and (iii) the 

bankruptcy court’s familiarity with the issues presented. Id. at 7. 

 Some courts have found the core/non-core distinction central to whether a matter should 

be withdrawn. See, e.g., In re Motions to Withdraw the Reference in Various Cases, 2012 WL 

5381208, at *7; In re Skyline Concrete Floor Corp., 410 B.R. 564, 566-567 (E.D. Mich. 2008); 

In re Appalachian Fuels, 472 B.R. at 737. The bankruptcy code permits bankruptcy judges to 

issue final judgments and orders in a non-exhaustive list of core proceedings contained in the 

statute, but requires bankruptcy judges to submit proposed findings of fact and conclusions of 

law in non-core proceedings, which are then subject to the objections of the parties and de novo 

review by the district court. 28 U.S.C. §§ 157(b)(1), (c)(1); see also Boyd v. King Par, LLC, 

No. 1:11-CV-1106, 2011 WL 5509873, at *1 (W.D. Mich. Nov. 10, 2011). Accordingly, a 

stronger case for withdrawal may be made where a matter is non-core and will inevitably require 

the involvement of a district court. 

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However, regardless of whether this adversary proceeding is core or non-core, the 

Dzierzawski’s jury demand and refusal to consent to a jury trial before the bankruptcy court 

necessarily renders the bankruptcy judge unable to enter a final judgment in this case.2 

Nonetheless, as the parties acknowledge, it is permissible for the bankruptcy court to retain 

authority over all pretrial proceedings leading up to trial, and for the district court to withdraw 

the matter only on the eve of trial. Indeed, some judges in this District have a standard policy of 

doing just that. E.g. In re Energy Conversion Devices, Inc., No. 12-12653, 2012 WL 5383165, 

at *2 (E.D. Mich. Oct. 26, 2012) (Rosen, C.J.) (“[T]he standard practice of this Court, and of 

others in this District, is to ‘permit[ ] the Bankruptcy Judge to manage the pre-trial phase of the 

litigation, with this Court revisiting the matter of withdrawal if and when the case is ready for 

trial.’” (quoting In re Collins & Aikman Corp., No. 06-11512, 2006 WL 6584164, at *2 (E.D. 

Mich. June 15, 2006))); Official Comm. of Unsecured Creditors ex rel. Estate of Greektown 

Holdings, LLC v. Papas, Nos. 10-cv-12628, 10-cv-12742, 10-cv-12774, 2010 WL 4807067, at 

*2 (E.D. Mich. Nov. 18, 2010) (Borman, J.) (“Generally, the Courts of this District have denied 

withdrawing the reference until the case is ready for trial.”) (collecting cases). 

 

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 Still, the Court observes that Vulpina’s reliance on the statutory text for its argument that 

fraudulent transfer claims are core proceedings may be misplaced. Resp. at 4 (referring to 28 

U.S.C. § 157(b)(2)(H)). The Supreme Court has recently identified a class of claims — so-called 

Stern claims — as to which bankruptcy courts may not issue final judgments, even though the 

bankruptcy code designates the claims as core. See Stern v. Marshall, 131 S. Ct. 2594, 2608 

(2011); see also Exec. Benefits Ins. Agency v. Arkison, 134 S. Ct. 2165, 2172 (2014). It has also 

assumed, without deciding, that fraudulent transfer claims are a type of Stern claim, and held 

separately that Stern claims should be treated as non-core claims. Exec. Benefits Ins. Agency, 

134 S. Ct. at 2172-2174. Perhaps taking a cue from that decision, other courts in this circuit have 

also concluded that fraudulent transfer claims are Stern claims and, therefore, are non-core. E.g. 

Williams v. Flying J Inc., No. 14-1184, 2014 WL 7411798, at *2, 3 (W.D. Tenn. Dec. 31, 2014); 

Emerson v. Treinish, No. 1:13-mc-52, 2014 WL 2807481, at *2-3 (N.D. Ohio June 20, 2014); In 

re Fisher, No. 10-63481, 2014 WL 8276560, at *2 (Bankr. S.D. Ohio Dec. 22, 2014) 

(recognizing that fraudulent transfer claims brought against individuals who have not filed proofs 

of claim are Stern claims); In re River City Resort, Inc., No. 14-10745, 2014 WL 3700564, at *9-

11 (Bankr. E.D. Tenn. July 24, 2014). 

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To the extent those courts have a firm practice of denying motions to withdraw until the 

matter is ready for trial, the Court declines to adopt a similar policy. Given the varying issues 

that may arise in an adversary proceeding, the Court believes that a flexible analysis is the more 

prudent approach. Accordingly, the Court turns to the remaining factors to determine which 

court should handle the pretrial stage of this adversary proceeding. 

 At the hearing, it was revealed that the parties remain in the thick of fact discovery, as 

electronically-stored information (“ESI”) has yet to be produced in the underlying bankruptcy 

matter and other ongoing adversary proceedings; a review of the ESI may necessitate further 

depositions or requests for rulings on the produced material. Vulpina stated that it believed the 

requested ESI would likely touch upon the transfer of interest at issue in the present adversary 

proceeding. Vulpina suggested that withdrawal of the proceeding at this stage would lead to the 

unfolding of ESI discovery in the district court and the bankruptcy court simultaneously. 

Furthermore, the parties have not yet commenced expert discovery, and at least one of the parties 

indicated that a dispute over expert methodology is likely. 

From the Court’s perspective, this matter remains in the early stages of litigation, and the 

certainty and timing of trial are far from clear. The bankruptcy judge has already adjudicated a 

number of discovery disputes between these parties, and is familiar with the issues likely to arise 

in the course of further discovery. Moreover, were the Court to withdraw the reference and 

oversee pretrial litigation on this particular matter, it would set the parties on two distinct, but 

concurrent, discovery paths — one in this Court and one in the bankruptcy court, where related 

discovery is continuing outside of the adversary proceeding. This could potentially result in 

duplicative efforts by the two courts, as well as run the risk of inconsistent rulings with regard to 

that discovery and the parties’ obligations thereunder. Such dual track efforts could cause 

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confusion and delay, which may ultimately hinder the resolution of both the adversary 

proceeding and the underlying bankruptcy. 

This leads the Court to conclude that judicial economy, in addition to the parties’ own 

time and resources, will be best served by permitting the bankruptcy judge to continue to oversee 

the pretrial litigation stage. If and when the matter comes to trial, the Court will have the benefit 

of a streamlined and uniform discovery process, making it easier for the Court to become 

familiar with the facts and issues to be presented at trial. Accordingly, the Court denies the 

Dzierzawskis’ motions to withdraw, without prejudice and subject to a re-filing of the motions at 

a later date. 

IV. CONCLUSION 

For the reasons discussed above, Debtor/Appellant Randy Dzierzawski’s motion to 

withdraw, In re Dzierzawski, 14-14615, (Dkt. 8), and Appellant Kimberly Dzierzawski’s motion 

to withdraw, In re Dzierzawski, 14-14734, (Dkt. 1), are denied without prejudice. 

SO ORDERED. 

Dated: June 22, 2015 s/Mark A. Goldsmith 

 Detroit, Michigan MARK A. GOLDSMITH 

 United States District Judge 

 

 

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing document was served upon counsel of record and 

any unrepresented parties via the Court's ECF System to their respective email or First Class 

U.S. mail addresses disclosed on the Notice of Electronic Filing on June 22, 2015. 

 s/Carrie Haddon__________ 

 Case Manager 

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