In re McKenzie, 476 B.R. 515

This is an appeal from three bankruptcy court orders denying immunity and related relief in a consolidated involuntary Chapter 7 then Chapter 11 matter against Grant, Konvalinka & Harrison, P.C. and others.
Trustee C. Kenneth Still filed an adversary in 2010 alleging violations of the automatic stay and related acts by Grant and related entities tied to Cleveland Auto Mall, LLC and Exit 20, LLC.
Bankruptcy Judge Cook dismissed those claims in December 2010, concluding Cleveland Auto Mall, LLC was not property of the estate and finding no plausible claim against the defendants.
Appellant then asserted state-law claims (malicious prosecution and abuse of process) in bankruptcy court on February 11, 2011, which Judge Rucker dismissed in August 2011 on immunity grounds.
Separately, in l:11-CV-320, Appellant sought leave to sue in Bradley County, Tennessee, concerning the same parties; the bankruptcy court denied leave in August 2011 and denied post-judgment relief in September 2011.
In l:11-CV-346, Appellant challenged turnover-related claims in Hamilton County, Tennessee; the bankruptcy court dismissed in September 2011. The district court affirmed all three bankruptcy judgments on appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trustees have immunity when acting within authority	Grant contends trustees exceeded authority and immunity should not apply.	Still and counsel acted within statutory duties and immunity applies.	Immunity affirmed; trustees acted within authority.
Whether Barton Doctrine applies to sue the trustee in non-appointing fora	Leave should be required; Barton doctrine bars suit without leave.	Trustee acted under statutory duties; Barton doctrine not required here.	Trustee not required to obtain leave; denial affirmed.
Whether discovery is required before ruling on immunity disputes	Should allow discovery to probe motives and bad faith.	Immunity decisions should be made early to avoid prejudice and expense.	No discovery required; court did not abuse discretion.
Whether the malicious prosecution claim was plead plausibly	Trustee lacked probable cause and acted with malice.	Trustee had a legal basis to seek turnover and investigate; probable cause exists.	Dismissal affirmed; lack of plausible claim found.
Whether the abuse-of-process claim was plead plausibly	Defendants used process improperly post-complaint	Actions were within regular procedural use related to turnover.	Dismissal affirmed; not pleaded improper use of process.

In re Kashani, 190 B.R. 875 (9th Cir. BAP 1995) (trustee immunity and Barton Doctrine analysis; business-carrying exception)
Allard v. Weitzman (In re DeLorean Motor Co.), 991 F.2d 1236 (6th Cir. 1993) (counsel for trustee treated as functional equivalent of trustee; immunity analysis)
In re Heinsohn, 247 B.R. 237 (E.D. Tenn. 2000) (functional/immunity approach for bankruptcy officers)
In re Lowenbraun, 453 F.3d 314 (6th Cir. 2006) (presumption trustees act within duties; ultra vires acts exception)
In re Behlke, 358 F.3d 429 (6th Cir. 2004) (standards of review for bankruptcy court factual findings)