612 B.R. 655
Bankr. M.D. Penn.2020Background
- Debtor Ross Roggio filed bankruptcy (converted from Chapter 13 to Chapter 7 on Dec. 10, 2018); adversary complaint filed Sept. 18, 2019 by Ross and his mother, Soon Ja Roggio, against estranged wife Kristy Roggio.
- Complaint asserts five counts: Count I (willful violation of the automatic stay — alleged refusal to turn over non-marital personal property) and Counts II–V (state-law claims: fraudulent inducement / misappropriation of $25,000 from sale proceeds, conversion, and request for injunctive relief).
- Defendant Kristy moved to dismiss under Fed. R. Civ. P. 12(b)(6) (via Rule 7012) and Rule 20, arguing improper party (Soon Ja), lack of jurisdiction, and failure to state claims.
- Court held Count I is a core bankruptcy claim (stay violation) but found Ross’s pleading inadequate and dismissed Count I without prejudice, granting 21 days to amend.
- The Court permissively abstained from adjudicating Counts II–V (non-core state-law claims) and declined to give leave to amend those counts; it also dropped Soon Ja as a plaintiff (no leave to rejoin).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kristy willfully violated the automatic stay (Count I) | Ross: Kristy exercised control over estate property and refused turnover of non-marital items | Kristy: Pleadings lack factual detail; passive possession does not equate to a stay violation | Count I dismissed for failure to state a claim; 21 days leave to amend; court retained jurisdiction as core matter |
| Whether the bankruptcy court has jurisdiction / whether Count I is core | Ross: Stay-violation claim invokes bankruptcy substantive rights | Kristy: Challenges overall jurisdiction of adversary | Court: Count I is a core proceeding invoking Bankruptcy Code rights; jurisdiction retained |
| Whether to hear Counts II–V (state-law claims) or abstain | Plaintiffs implicitly seek federal adjudication of related state-law claims | Kristy: State-law claims predominate and are non-core; bankruptcy court should abstain | Court permissively abstained from Counts II–V (non-core, predominately state-law, related state proceedings exist); no leave to amend those counts |
| Whether Soon Ja is a proper plaintiff (esp. for stay relief) | Soon Ja included as co-plaintiff asserting claims including against Kristy | Kristy: Soon Ja lacks standing for automatic stay relief; misjoinder | Court dropped Soon Ja as a plaintiff (automatic stay is personal to debtor; no unusual circumstances pled); no leave to amend |
Key Cases Cited
- In re Combustion Eng’g, Inc., 391 F.3d 190 (3d Cir. 2004) (describing categories of bankruptcy jurisdiction)
- Halper v. Halper, 164 F.3d 830 (3d Cir. 1999) (core/non-core proceeding framework)
- In re Denby-Peterson, 941 F.3d 115 (3d Cir. 2019) (passive retention of prepetition repossessed property may not violate the automatic stay)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard and requirement to plead factual content)
- Stoe v. Flaherty, 436 F.3d 209 (3d Cir. 2006) (elements governing mandatory abstention)
- In re Exide Technologies, 544 F.3d 196 (3d Cir. 2008) (scope of "related to" jurisdiction)
- McCartney v. Integra Nat’l Bank North, 106 F.3d 506 (3d Cir. 1997) (automatic stay is personal to the debtor)