Opinion ID: 172814
Heading Depth: 1
Heading Rank: 4

Heading: Bankruptcy Court's Jurisdiction to Enter Money Judgment [10]

Text: As part of its order denying discharge of the debt, the bankruptcy court entered judgment against Riebesell for the non-dischargeable portion of the debt. Riebesell argues it lacked jurisdiction to do so. He contends the underlying state law action on the debt neither arises under nor is related to a case under Title 11 and is therefore outside the jurisdiction of the bankruptcy court. 28 U.S.C. § 1334(b). Pursuant to § 1334(b), the district courts have exclusive jurisdiction of all bankruptcy cases under Title 11 of the United States Code, and original but not exclusive jurisdiction of all civil proceedings arising under Title 11, or arising in or related to cases under title 11. 28 U.S.C. § 1334(b). In accordance with this grant of jurisdiction, district courts may refer core and related-to proceedings to the bankruptcy courts for adjudication. See 28 U.S.C. § 157. As Riebesell acknowledges, a proceeding to determine non-dischargeability of a debt under § 523 is a core proceeding arising under the bankruptcy code and may be determined by a bankruptcy court. See Morrison v. W. Builders of Amarillo, Inc. (In re Morrison), 555 F.3d 473, 478 (5th Cir.2009). The question is whether a bankruptcy court, in addition to declaring a debt non-dischargeable, has jurisdiction to liquidate the debt and enter a monetary judgment against the debtor. Id. According to the circuit courts that have considered this issue, bankruptcy courts do possess such jurisdiction. See, e.g., Morrison, 555 F.3d at 478-80; Cowen v. Kennedy (In re Kennedy), 108 F.3d 1015, 1017-18 (9th Cir.1997); Longo v. McLaren (In re McLaren), 3 F.3d 958, 965-66 (6th Cir. 1993); cf. Porges v. Gruntal & Co. (In re Porges), 44 F.3d 159, 163-65 (2d Cir.1995) (holding bankruptcy court had jurisdiction to enter money judgment after determining validity of contested proof of claim, even after voluntary dismissal of bankruptcy case); N.I.S. Corp. v. Hallahan (In re Hallahan), 936 F.2d 1496, 1507-08 (7th Cir.1991) (rejecting debtor's claim of a right to jury trial on underlying debt in dischargeability proceeding). The reasons usually given include: 1) determination of the debt lies within the equitable jurisdiction of the bankruptcy court; 2) the debtor by filing bankruptcy has consented to jurisdiction of the bankruptcy court over matters necessary to the determination of adversarial proceedings; and 3) judicial economy and efficiency require that the bankruptcy court be empowered to settle both the dischargeability of the debt and the amount of the monetary judgment. See, e.g., Hallahan, 936 F.2d at 1507-08. Our prior case law is not inconsistent with these rationales. See generally RTC v. McKendry (In re McKendry), 40 F.3d 331, 336 (10th Cir.1994) (In bankruptcy court there are two separate and distinct causes of action[.] One cause of action is on the debt and the other cause of action is on the dischargeability of that debt. (quotation omitted)). Finding these cases persuasive, we conclude that the bankruptcy court had jurisdiction to enter a monetary judgment against Mr. Riebesell as a part of this adversarial proceeding.