United States District Court, M.D. Florida, Orlando Division
SOUTHSTAR CAPITAL GROUP, I, LLC, COTTINGTON ROAD TIC, LLC and DURBAN ROAD TIC, LLC, Plaintiffs,
1662 MULTIFAMILY LLC, HINES 1662 MULITFAMILY, LLC, HINES INVESTMENT MANAGE ME NT HOLDINGS LIMITED PARTNERSHIP, HIMH GP, LLC, HINES REAL ESTATE HOLDINGS LIMITED PARTNERSHIP, HINES INTEREST LIMITED PARTNERSHIP, JCH INVESTMENTS, INC. and URBAN OAKS BUILDERS, LLC, Defendants.
G. BYRON, UNITED STATES DISTRICT JUDGE
cause comes before the Court without oral argument on the
Plaintiffs' Motion for Leave to Appeal (Doc. 59);
Urban Oaks Builders LLC's Response (Doc. 60);
Plaintiffs' Reply (Doc. 63);
Plaintiffs' Amended Motion for Stay Pending Appeal (Doc.
Urban Oaks Builders LLC's Response (Doc. 65); and
Plaintiffs' Reply (Doc. 66).
briefing complete, the matter is ripe. Upon consideration,
the Motions for Leave to Appeal and to Stay will be granted.
hot potato of a case is before the Court for consideration of
Plaintiffs' Motion for Leave to Appeal a May 7, 2019,
order from the U.S. Bankruptcy Court for the Middle District
of Florida. The Court begins with a brief overview of the
winding trail trod by this action through three courts and
six judges and counting.
a trio of limited liability companies, initiated this suit in
state court against Defendants, an octet of affiliated
entities, asserting five Counts stemming from Defendants'
sale of an allegedly defective apartment property for $67,
000, 000.00 (the “Defect
Lawsuit”). (Doc. 2). After Defendant Urban
Oaks Builders LLC (“UOB”) filed
for Chapter 11 bankruptcy relief in the Bankruptcy Court for
the Southern District of Texas, the Defect Lawsuit was
removed to this Court pursuant to 28 U.S.C. §§ 1334
and 1452, which vest district courts with subject matter
jurisdiction over cases “related to” pending
bankruptcy actions. (Doc. 1). Once here, the action spent
time on three judges' dockets before the Honorable Judge
Anne C. Conway transferred the suit to the Bankruptcy Court
for the Middle District of Florida (“First
Transfer Order”) based on 28 U.S.C. §
157(a). (Docs. 16, 27, 55).
there, the Defect Lawsuit was again transferred, this time to
the Bankruptc y Court for the Southern District of Texas on
UOB's motion. (Doc. 57-1, pp. 16-22
(“Second Transfer Order”)). The
Second Transfer Order denied Plaintiffs' request to
abstain and transfer the action back to state court, opting
instead to transfer the suit pursuant to 28 U.S.C. §
1412 to the Texas Bankruptcy Court principally because that
court “can resolve all issues between the
parties.” (Id. at p. 21). Now, Plaintiffs move
for leave to appeal the Second Transfer Order, contending the
Bankruptcy Court exceeded its authority in transferring the
Defect Lawsuit and violated both the mandatory and permissive
abstention statutes. (Doc. 59). Plaintiffs seek leave under
the collateral order doctrine or, alternatively, 28 U.S.C.
§ 158(a)(3), the interlocutory appeal statute.
Collateral Order Doctrine
Appellants argue that leave to appeal should be granted under
the collateral order doctrine. (Doc. 59, p. 7). The
collateral order doctrine-a narrow exception to the rule that
appeals may only be taken of final judgments-enables
litigants to appeal prejudgment orders under prescribed
circumstances. To be appealable, “an order must (1)
conclusively determine the disputed question, (2) resolve an
important issue completely separate from the merits of the
action, and (3) be effectively unreviewable on appeal from a
final judgment.” In re Celotex Corp., 187 B.R.
746, 749 (M.D. Fla. 1995). “The collateral order
doctrine is a ‘narrow exception,' whose reach is
limited to trial court orders affecting rights that will be