2:12-cv-00778
W.D. Wash.May 21, 2012Background
- Plaintiff Pacific International Grout Co. sued Zinkova in state court for losses from embezzlement.
- Zinkova filed counterclaims against PIGCO and Stephens; PIGCO moved for summary judgment in state court proceedings.
- Zinkova petitioned for Chapter 13 bankruptcy; the automatic stay stayed the state court litigation.
- PIGCO filed an adversary proceeding in Bankruptcy Court seeking non-dischargeability determinations related to the state court claims.
- Zinkova answered in the adversary with counterclaims against PIGCO and Stephens, raising state-law claims tied to alleged misconduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to withdraw the reference to the district court. | Zinkova's counterclaims are non-core state-law claims; efficiency favors withdrawal. | Not specified in the record. | Withdrawals granted; reference to district court is withdrawn. |
| Whether the counterclaims are core or non-core proceedings. | Counterclaims are non-core state-law claims. | Not specified in the record. | Counterclaims are non-core proceedings. |
| Whether judicial efficiency supports a single proceeding in district court. | District court review avoids duplicative work and aligns with Article III limits. | Not specified in the record. | Efficiency supports withdrawing the reference and proceeding in district court. |
Key Cases Cited
- Stern v. Marshall, 564 U.S. 462 (Supreme Court 2011) (non-core proceedings require district court review when tied to bankruptcy)
- Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (U.S. 1982) (Article III limits on bankruptcy jurisdiction; de novo review by district court)
- Vacation Village, Inc. v. Clark County, 497 F.3d 902 (9th Cir. 2007) (judicial resources and efficiency inform withdrawal decisions)
- Secruity Farms v. International Brotherhood of Teamsters, 124 F.3d 999 (9th Cir. 1993) (factors for determining cause to withdraw include efficiency and core/non-core status)
- In re Larry's Apartment, LLC, 210 B.R. 469 (Bankr.D.Ariz.1997) (burden on movant to show cause for withdrawal)