Parmar v. Cauff (In Re Jet Network, LLC)
457 B.R. 895
Bankr. S.D. Florida2011Background
- Jet Network, LLC filed an involuntary Chapter 7; trustee Goldberg appointed in 2008.
- N.J. Case (MID-L-8700-07) was removed to federal court by ML Finance after Cauff’s Third-Party Complaint in 2008.
- Trustee and Cauff entered a settlement (Trustee/Cauff Settlement) approved January 21, 2010, giving the estate a financial interest in the N.J. Case.
- Segrave filed a Suggestion of Bankruptcy and Motion for Stay in N.J. Case on May 17, 2010, notifying ML Finance of the settlement.
- ML Finance filed its Notice of Removal on February 17, 2011; the Removed Case was later transferred to the Southern District of Florida and assigned to this court.
- Court grants remand to state court and awards costs/fees under 28 U.S.C. § 1447(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal was timely under § 1446(b) | Cauff: removal timely under second paragraph after notice identifying removability | ML Finance: removal timely only when added as party in Merrill Lynch Adversary | No; removal untimely; remand granted |
| When related-to jurisdiction existed for removal | Cauff: settlement created related-to basis early; May 17, 2010 notice sufficed | ML Finance: related-to existed only after joinder in Merrill Lynch Adversary | Related-to jurisdiction existed by May 17, 2010; removal deadline expired June 16, 2010 |
| Entitlement to fees under 28 U.S.C. § 1447(c) | Cauff seeks costs/attorney fees due to improper removal | ML Finance: removal was reasonable | Fees awarded; ML Finance lacked a reasonable basis for timeliness; costs and fees to be determined |
Key Cases Cited
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for related-to bankruptcy jurisdiction)
- Lovern v. General Motors Corp., 121 F.3d 160 (4th Cir. 1997) (reliance on four-corners of initial pleadings for notice)
- Foster v. Mutual Fire, Marine & Inland Ins. Co., 986 F.2d 48 (3d Cir. 1993) (notice determined from initial pleadings/documents, not subjective knowledge)
- Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (U.S. 1995) (removal permitted under 1441/1452 in bankruptcy cases)
- Miller v. Kemira, Inc. (In re Lemco Gypsum, Inc.), 910 F.2d 784 (11th Cir. 1990) (adopted Pacor approach to related-to jurisdiction)
- Chapman v. Powermatic, Inc., 969 F.2d 160 (5th Cir. 1992) (timeliness and removability standards in related contexts)