489 B.R. 711
Bankr. E.D. Tenn.2012Background
- Chapter 7 trustee and court-appointed auctioneer moved to dismiss a state-law action removed to bankruptcy court.
- Plaintiff husband sued the trustee and Phillips for turnover-related conduct, emotional distress, civil rights, and due-process claims arising from estate asset sales.
- Assets involved included the debtor’s residence at 3520 Orebank Road and personal property; turnover and sale were ordered by bankruptcy court.
- Trustee and auctioneer served notices of sale in 2011, with hearings on turnover and objections culminating in turnover and sale orders.
- Plaintiff amended the complaint in state court bringing nine counts alleging misconduct in administration of the bankruptcy estate and related matters.
- Removal was governed by 28 U.S.C. §§ 1441, 1452, and 1334; court treated the matter as a core related-to proceeding; Barton doctrine and immunity defenses were raised.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal was timely under § 1446(b). | Plaintiff contends removal was untimely. | Defendants assert formal service within 30 days triggered removal. | Removal timely; service occurred within 30 days before removal. |
| Whether removal was proper under bankruptcy related-to jurisdiction. | Action relates to state law; no bankruptcy connection. | Action is related to bankruptcy as it involves estate assets and turnover. | Removal proper under § 1452(a) as related to bankruptcy. |
| Whether Barton doctrine requires dismissal for lack of court approval before suit. | Barton doctrine does not apply or requires dismissal. | Trustee and auctioneer acted as officers of the court; Barton applies. | Barton doctrine does apply; but removal cures violation, so not mandatorily dismissed. |
| Whether immunity defeats the claims against trustee and auctioneer. | Actions outside official capacity; not immune. | Acts were within court orders and duties; shielded by immunity. | Defendants protected by quasi-judicial/absolute immunity; dismissal with prejudice. |
| Whether abstention/remand was warranted given Barton issue. | Discretionary abstention warranted; remand to state court. | Because of Barton, state court lacks jurisdiction; abstention inappropriate. | Abstention/remand denied; proceed with immunity-based dismissal. |
Key Cases Cited
- Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999) (removal clock runs on formal service, not mere receipt of complaint)
- In re Triple S Restaurants, Inc., 519 F.3d 575 (6th Cir. 2008) (Barton doctrine applies to trustees; dismissal not automatic for Barton violation)
- In re Lowenbraun, 453 F.3d 314 (6th Cir. 2006) (ultra vires not a universal bar to Barton applicability; immunity analysis governs)
- Sanders Confectionery Prods. v. Heller Fin., Inc., 973 F.2d 474 (6th Cir. 1992) (core proceedings in bankruptcy context when related to estate administration)
- In re DeLorean Motor Co., 991 F.2d 124 (6th Cir. 1993) (court-appointed officers acting within court orders have immunity)