Inland Boat Club, LLC v. Lee, 22-02071

Inland Boat Club, LLC (Debtor) operated a boat sharing service and filed for Chapter 11 bankruptcy in 2022; Adam Lee and Casey Warren (Creditors) claimed they had secured loans with the Debtor.
Disputes arose when Debtor borrowed $3.9M from Rock Canyon Bank (later Hillcrest Bank), which was secured by the same boats Creditors claimed as collateral; their claims were not repaid, leading to litigation.
During bankruptcy, Debtor’s assets and related secured claims were sold and assigned to the Charles David Westover Revocable Trust as part of a reorganization plan, after various settlements and court approvals.
Creditors filed third-party claims against the Bank, asserting (1) voidable transfer under Utah law, (2) a declaratory judgment regarding lien priority, and (3) damages for negligence.
The Bank moved for summary judgment, seeking dismissal with prejudice; Creditors sought to dismiss without prejudice to allow state court litigation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Bankruptcy Court had jurisdiction over the third-party claims	Claims are state law and shouldn’t concern the Bankruptcy Court post-plan	Court retains core jurisdiction, especially over plan enforcement	Court had jurisdiction over Avoidance and Declaratory Judgment claims; not over Negligence claim
Whether the Avoidance claim (UVTA) could proceed	Creditors can pursue UVTA claims individually	Only the Debtor can pursue UVTA; claims were released, res judicata applies	Avoidance Action dismissed with prejudice as improper collateral attack
Whether Declaratory Judgment claim on lien priority could proceed	Creditors’ lien was prior to Bank’s (now Westover’s)	Lien issues are settled, plan confirmed, issue is moot/resolved	Declaratory Judgment Action is moot, dismissed with prejudice
Whether Negligence claim should be dismissed with prejudice	Should be dismissed without prejudice for state court	Dismissed with prejudice for lack of merit or summary judgment appropriate	Court lacks jurisdiction; dismissed without prejudice

Celotex Corp. v. Edwards, 514 U.S. 300 (scope of bankruptcy “related to” jurisdiction)
Travelers Indem. Co. v. Bailey, 557 U.S. 137 (court’s authority to interpret and enforce its own orders)
United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (finality and res judicata effect of confirmed bankruptcy plan)
Gardner v. United States (In re Gardner), 913 F.2d 1515 ("conceivable effect" test for bankruptcy jurisdiction)
Stern v. Marshall, 564 U.S. 462 (core vs. non-core proceedings and judicial authority under bankruptcy law)