United States District Court, M.D. Florida, Orlando Division
In Re Mojo Brands Media, LLC GENE T. CHAMBERS, Plaintiff,
PERKINS COIE, LLP and NIXON PEABODY, LLP, Defendants. In Re Mojo Brands Media, LLC GENE T. CHAMBERS, Plaintiff,
PERKINS COIE, LLP and NIXON PEABODY, LLP, Defendants.
E. MENDOZA UNITED STATES DISTRICT JUDGE.
CAUSE is before the Court on Defendant Nixon Peabody,
LLP's Motion to Withdraw the Reference ("Motion,
" Doc. 1). Plaintiff has not responded, and the time to
do so has now passed. For the reasons stated herein, the
Motion will be granted in part and denied in part.
1, 2015, Mojo Brands Media, LLC ("Mojo") filed a
Chapter 7 bankruptcy petition in the United States Bankruptcy
Court for the Middle District of Florida. (Compl., Doc. 5-2,
¶ 2). On April 28, 2017, Plaintiff, as Mojo's
trustee, filed a Complaint for damages against Defendants,
alleging legal malpractice, breach of fiduciary duty, and
aiding and abetting the breach of fiduciary duty. (See
generally id.). In response, Defendants each filed a
motion to dismiss the Complaint. (See generally Doc.
Nos. 5-3, 5-6). Now, Nixon Peabody seeks an order withdrawing
the reference from the bankruptcy court so that this Court
can exercise original jurisdiction over the legal malpractice
standard for permissive withdrawal is stated in 28 U.S.C.
§ 157(d): "The district court may withdraw, in
whole or in part, any case or proceeding referred under this
section, on its own motion or on timely motion of any party,
for cause shown." Congress has not defined the
"cause" required for permissive withdrawal, but the
Eleventh Circuit has specified that cause "is not an
empty requirement." Parklane Hosiery Co. v.
Parklane/Atlanta Venture (In re Parklane/Atlanta Joint
Venture), 927 F.2d 532, 536 (11th Cir. 1991). "[I]n
determining whether cause exist[s] to [withdraw the
reference, ] a district court should consider such goals as
advancing uniformity in bankruptcy administration, decreasing
forum shopping and confusion, promoting the economical use of
the parties' resources, and facilitating the bankruptcy
process." Dionne v. Simmons (In re Simmons),
200 F.3d 738, 742 (11th Cir. 2000) (quotation omitted).
Additional factors to consider include "(1) whether the
claim is core or non-core; (2) efficient use of judicial
resources; (3) a jury demand; and (4) prevention of
delay." Control Ctr., LLC v. Lauer, 288 B.R.
269, 274 (M.D. Fla. 2002). "Permissive withdrawal is
within the discretion of the district court, and the burden
of establishing cause for permissive withdrawal is on the
movant-----" Scharrer v. Troutman Sanders,
LLP (In re Fundamental Long Term Care, Inc.), No.
8:14-cv-01800-EAK, 2014 WL 4452711, at *1 (M.D. Fla. Sept. 9,
2014) (citation omitted).
Peabody argues that the Motion should be granted because the
above mentioned factors weigh in favor of withdrawing the
reference from the bankruptcy court. Those factors will be
addressed in turn.
or Non-Core Status of the Proceedings
a matter is core or non-core is a determination that should
first be made by the Bankruptcy Court." Scharrer v.
Quintairos, Prieto, Wood & Boyer, PA. (In re Fundamental
Long Term Care, Inc.), No. 8:14-cv-1377-T-17, 2014 WL
2882522, at *2 (M.D. Fla. June 25, 2014); see also
28 U.S.C. § 157(b)(3) ("The bankruptcy judge shall
determine, on the judge's own motion or on timely motion
of a party, whether a proceeding is a core proceeding under
this subsection or is a proceeding that is otherwise related
to a case under title 11."). Here, the bankruptcy court
entered an order granting the parties' joint stipulation
that "[t]he claims asserted against Nixon Peabody are
non-core claims" and that "the claims asserted
against Perkins Coie... shall be treated in the same manner
as non-core claims." (Aug. 15, 2017 Order, Doc. 5-10,
¶¶ 1-2). While such a determination weighs in favor
of transferring the matter to the district court, the Court
must also consider the parties' arguments regarding the
Efficient Use of Judicial Resources
Peabody asserts that withdrawing the reference now promotes
the efficient use of economic and judicial resources and will
prevent delay. Essentially, Nixon Peabody's argument is
that adjudication of the matter by the district court would
be more efficient because all orders by the bankruptcy court
would be subject to de novo review by the district
court, and therefore, this Court should bypass the bankruptcy
court entirely. "If accepted, this kind of reductionist
reasoning would result in the reference always being
withdrawn from the Bankruptcy Court in the name of efficiency
because of the omnipresent possibility of appeal."
Tate v. Citimortgage, Inc. (In re Tate), No.
09-0039-WS-M, 2010 WL 320488, at * 10 (S.D. Ala. Jan. 19,
2010) (emphasis omitted). "Without more, this argument
carries little, if any, weight in favor of withdrawal."
Eide v. Haas (In re H& W Motor Express Co.), 343
B.R. 208, 215 (N.D. Iowa 2006).
Peabody argues that Plaintiffs demand for a jury trial
necessitates the withdrawal of the reference from the
bankruptcy court. Jury trials are only permitted in
bankruptcy court "with the express consent of all the
parties." 28 U.S.C. § 157(e). Because Plaintiff has
made a jury demand and Nixon Peabody does not consent to a
jury trial before the bankruptcy court, the trial would have
to be conducted in the district court. While "[a] demand
for a jury trial in a non-core matter in itself may provide
sufficient cause to withdraw the reference[J" "a
court may wait until the case is ready to go to trial before
withdrawing the reference." In re Fundamental Long
Term Care, Inc., 2014 WL 4452711, at *3 (quotation
omitted); see also Hvide Marine Towing, Inc. v. Kimbrell
(In re Hvide Marine Towing, Inc.),248 B.R. 841, 845