Opinion ID: 2982386
Heading Depth: 2
Heading Rank: 1

Heading: P. 555 (Mot. for Sanctions).

Text: 4 Nos. 13-5629, 13-5630, 13-5728 Spradlin et al. v. Richard et al. The bankruptcy court then acted on the motion of PEG, Richard, and Banner to dismiss Spradlin and THC’s second amended complaint, concluding that the bankruptcy court lacks subject-matter jurisdiction over THC’s claims. A.P. 610 (Mem. Op. & Order Granting Mot. to Dismiss Second Am. Compl.). The bankruptcy court concluded that all of the parties in the adversary proceeding were nondebtors, and the proceeding was not “related to” the Chapter 11 proceeding because the 2009 Settlement Agreement gave control over the claims in the adversary proceeding to THC and others, and the bankruptcy estate was left with only “an extremely tenuous connection [to the adversary proceeding] . . . which is not a sufficient basis upon which this Court may rely for subject-matter jurisdiction.” Id. at 19–20. Spradlin and THC moved to alter or amend this decision. A.P. 624 (Mot. to Alter or Amend). The bankruptcy court did not change its position that the bankruptcy court lacked subject-matter jurisdiction over the non-Banner claims, but the bankruptcy court concluded that the Banner claims were at least “related to” the bankruptcy case and so the bankruptcy court had subject-matter jurisdiction over those claims, but those claims were noncore matters. A.P. 640 (Order on Mot. to Alter or Amend at 8–9). The bankruptcy court declined to exercise supplemental jurisdiction over the non-Banner claims, id. at 9–10, and exercised “its discretion to abstain from exercising jurisdiction over the Banner Claims” under 28 U.S.C. § 1334(c)(1), id. at 11. Accordingly, the bankruptcy court entered an order dismissing Spradlin and THC’s second amended complaint. A.P. 643 (Order Dismissing Second Am. Compl.). 5 Nos. 13-5629, 13-5630, 13-5728 Spradlin et al. v. Richard et al. On September 21, 2012, the bankruptcy court granted Spradlin and THC’s request for sanctions against PEG, Banner, and Richard and awarded $30,052.09 in sanctions to THC. A.P. 649 (Sanctions Order at 8). Spradlin and THC filed a notice of appeal of the dismissal of their second amended complaint for lack of subject-matter jurisdiction. A.P. 644 (THC Notice of Appeal) (appealing from A.P. 610, 611, 640, 642, and 643). PEG filed a timely notice of the cross-appeal of the dismissal of its first amended cross-claims for failure to state a claim, A.P. 647 (PEG Notice of Cross-Appeal) (appealing from A.P. 208, 209, 305, and 306), but failed to meet a deadline for submitting a cross-designation of items to be included in the record of appeal and a statement of additional issues to be pursued on appeal, as required by Bankruptcy Procedure Rule 8006. PEG, Banner, and Richard moved for an extension of time.3 A.P. 651 (Mot. for Extension). The bankruptcy court overruled the motion because it concluded that the failure to comply with the deadline was not the result of excusable neglect. A.P. 657 (Order Den. Mot. for Extension). PEG, Richard, and Banner then filed a notice of appeal of the bankruptcy court’s award of sanctions and denial of the motion for extension of time. A.P. 661 (PEG Notice of Appeal) (appealing A.P. 649, 657). Additionally, Spradlin and THC moved in the district court to dismiss PEG’s cross-appeal of the dismissal of its first amended cross-claims for failure to state a claim, arguing that the cross-appeal could not proceed without the designation of items to be included in the record and statement of issues to be presented on appeal, and even if dismissal 3 PEG brought the first amended cross-claims on its own behalf. It is not clear why Richard and Banner moved with PEG for the extension of time, since they were not parties to the first amended cross-claims. 6 Nos. 13-5629, 13-5630, 13-5728 Spradlin et al. v. Richard et al. was not mandated, the late filing of these documents permitted dismissal of the cross-appeal under Bankruptcy Rule 8001(a). 113 R. 2-1 (Memo. for Mot. to Dismiss at 5–7).4 The district court issued three opinions disposing of Spradlin and THC’s appeal and PEG’s cross-appeal and appeal. First, the district court affirmed the dismissal of Spradlin and THC’s second amended complaint for lack of subject-matter jurisdiction. Spradlin I, 2012 WL 6706188. Spradlin and THC did not appeal this decision. Second, the district court affirmed the bankruptcy court’s sanctions award. Richard v. Spradlin (“Spradlin II”), No. 12-127-ART, 2013 WL 1571059 (E.D. Ky. Apr. 12, 2013). Finally, the district court reversed the bankruptcy court’s denial of PEG’s motion to extend time; denied Spradlin and THC’s motion to dismiss PEG’s cross-appeal for want of prosecution; and held that the bankruptcy court lacks subjectmatter jurisdiction over PEG’s cross-claims and so reversed the bankruptcy court’s dismissal of the cross-claims for failure to state a claim. Pikeville Energy Grp., LLC v. Spradlin (“Spradlin III”), Nos. 12-113-ART, 12-127-ART, 2013 WL 1718801 (E.D. Ky. Apr. 19, 2013). Spradlin and THC appealed this decision, initiating Case Nos. 13-5628 and 13-5630 in this court. 113 R. 24 (THC Notice of Appeal) (appealing 113 R. 21, 22, 23); 127 R. 33 (THC Notice of Appeal) (appealing 127 R. 29, 30, 31). 5 PEG, Richard, and Banner cross-appealed the affirmance of the sanctions, initiating Case No. 13-5728 in this court. 127 R. 37 (PEG Notice of Cross-Appeal) (appealing 127 R. 27, 31). 4 “113 R.” refers to documents in district court Case No. 12-113-ART. 5 The April 19, 2013, decision disposed of issues in Case No. 12-113-ART and Case. No. 12-127-ART; hence THC’s appeal from the decision was docketed under both case numbers. 7 Nos. 13-5629, 13-5630, 13-5728 Spradlin et al. v. Richard et al.