473 B.R. 89
Bankr. W.D. Pa.2012Background
- Complaint in state court alleges Defendants, hired by the Chapter 7 Trustee to aid in marketing real estate, misrepresented zoning to Plaintiff.
- Defendants moved to dismiss; Plaintiff moved to remand or abstain; motions are ripe for decision.
- Barton doctrine requires bankruptcy-court leave before suing a trustee or court-approved professionals; VistaCare confirms ongoing viability of the doctrine.
- Court finds Defendants fall within Barton protection as court-appointed professionals, but Plaintiff had not obtained prior Court approval.
- Court elects nunc pro tunc Barton approval to allow case to proceed and denies remand; abstention denied; Plaintiff must amend complaint to remove fraudulent misrepresentation and clarify damages.
- Remaining issues concern related-to jurisdiction and the potential impact on main bankruptcy case orders, with denial of remand and abstention.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Barton doctrine apply to allow this action? | No prior Court approval; proceeding should be barred. | Defendants are court-approved professionals covered by Barton; action may proceed. | Yes; nunc pro tunc Barton approval granted, case may proceed. |
| Is there related-to jurisdiction to deny remand? | No nexus to estate; no assets affected. | Damages would affect bankruptcy process and orders. | Related-to jurisdiction established; remand denied. |
| Should the case be abstained from or remanded per 11 U.S.C. § 1334? | Abstention requested by Plaintiff. | Abstention warranted; court should abstain. | Abstention denied; neither discretionary nor mandatory abstention granted. |
Key Cases Cited
- Barton v. Barbour, 104 U.S. 126 (U.S. 1881) (establishes Barton doctrine requiring court leave for suits against trustees/estate professionals)
- In re VistaCare Group, L.L.C., 678 F.3d 218 (3d Cir. 2012) (Barton doctrine viable post-VistaCare; plaintiff bears prima facie burden)
- Lawrence v. Goldberg, 573 F.3d 1265 (11th Cir. 2009) (doctrine extended to court-approved professionals aiding trustee)
- Carter v. Rodgers, 220 F.3d 1249 (11th Cir. 2000) (antique company appointed to sell debtor property covered by Barton doctrine)