In re: Ronnie Louis Marvel Kahapea
1:25-cv-00124
D. Haw.May 5, 2025Background
- Pennymac initiated a foreclosure action against Kahapea in Hawaii state court regarding property in Volcano, HI, after a mortgage default.
- The state court granted summary judgment and an interlocutory decree of foreclosure to Pennymac; Kahapea appealed to the Hawaii Intermediate Court of Appeals.
- Kahapea subsequently filed for Chapter 13 bankruptcy, listing assets but reporting no creditors or liabilities, and did not acknowledge the Pennymac mortgage as a debt.
- Pennymac objected in the bankruptcy case, noting their claim was unlisted in Kahapea’s proposed plan.
- Kahapea then filed an adversary proceeding (AP) against Pennymac in bankruptcy court, seeking to invalidate Pennymac’s claims and enjoin foreclosure.
- Kahapea moved (and filed a supplemental petition) to withdraw the bankruptcy and AP references to the district court, arguing constitutional claims and a right to a jury trial.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Mandatory Withdrawal of Bankruptcy Reference | Bankruptcy and AP require resolving substantial federal (non-bankruptcy) and constitutional issues | No substantial, material federal (non-bankruptcy) issues exist requiring district court review | DENIED; No substantial and material non-bankruptcy federal law implicated |
| Permissive Withdrawal of Reference | Cites right to jury trial and federal constitutional questions as cause | Permissive withdrawal standards (judicial efficiency, consistency, etc.) not met | DENIED; No cause for permissive withdrawal shown |
| Jury Trial Right | Right to jury trial necessitates withdrawal to district court | Bankruptcy court can resolve dispositive motions pre-jury trial | DENIED; Jury trial right alone doesn’t require withdrawal |
| "Non-Core" Proceedings | AP involves non-core, constitutional claims so must be decided by district court | Bankruptcy court must first determine whether proceeding is core or non-core | DENIED; Premature to assert non-core status; bankruptcy court decides first |
Key Cases Cited
- Sec. Farms v. Int’l Bhd. of Teamsters, 124 F.3d 999 (9th Cir. 1997) (mandatory withdrawal hinges on substantial and material questions of federal law; factors for permissive withdrawal)
- In re Coupon Clearing Serv., Inc., 113 F.3d 1091 (9th Cir. 1997) (bankruptcy court initially determines whether case is core or related)
- In re Healthcentral.com, 504 F.3d 775 (9th Cir. 2007) (jury trial right does not itself require immediate withdrawal to district court)