Stichting Pensioenfonds ABD v. Countrywide Financial Corp.
2010 U.S. Dist. LEXIS 139289
| C.D. Cal. | 2010Background
- Plaintiff ABP sues regarding fourteen RMBS offerings alleging misrepresentations and omissions in offering documents under 15 U.S.C. §§ 11, 12(a)(2) and 15 and related California claims.
- One Trust, 2006-HYB1, included loans originated by American Home Mortgage Corp. purchased by CHL, representing a material portion of the Trust’s loans.
- American Home filed Chapter 11 bankruptcy; CHL asserted indemnification rights under a Purchase Agreement with American Home to defend CHL and cover costs.
- The Plan in American Home’s bankruptcy was confirmed and became effective, creating a framework for claims administration and potential indemnification.
- Defendants removed the action to federal court arguing it was related to the American Home bankruptcy; Plaintiff moved to remand to state court.
- The court held removal proper and declined to remand on equitable grounds, finding the action related to the bankruptcy plan and its administration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the action 'related to' the American Home bankruptcy after plan confirmation? | ABP contends no close nexus post-confirmation. | CHL argues indemnification and plan administration establish relatedness. | Yes; court applies close nexus, finds related to the confirmed plan. |
| Was removal to federal court proper under §1452? | Remand should be granted if not related to bankruptcy. | Removal proper given related-to jurisdiction. | Removal proper; court denied remand. |
| Should the case be remanded on equitable grounds under §1452(b)? | Equitable remand is warranted due to non-core, non-debtor status. | Equitable factors do not favor remand; court should keep in federal court. | No equitable remand; factors weigh against remand. |
Key Cases Cited
- In re Pegasus Gold Corp., 394 F.3d 1189 (9th Cir. 2005) (post-confirmation close nexus limited to plan administration matters)
- In re Resorts Int'l, Inc., 372 F.3d 154 (3d Cir. 2004) (post-confirmation related-to jurisdiction; plan administration focus)
- In re Fietz, 852 F.2d 455 (9th Cir. 1988) (broadly defines related-to to include possible effect on estate)
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for related-to jurisdiction)
- City of Ann Arbor Employees' Retirement Sys. v. Citigroup Mortg. Loan Trust, Inc., 572 F. Supp. 2d 314 (E.D.N.Y. 2008) (indemnification claims can render action related to bankruptcy)
- Federal Home Loan Bank of Seattle v. Deutsche Bank Sees., Inc., 736 F. Supp. 2d 1283 (W.D. Wash. 2010) (indemnification defense costs tie action to bankruptcy)
- Sizzler Restaurants, Inc. v. Belair & Evans LLP, 262 B.R. 811 (Bankr. C.D. Cal. 2001) (indemnification-related context cited in related-to analysis)
- In re Roman Catholic Bishop of San Diego, 374 B.R. 756 (Bankr. S.D. Cal. 2007) (multifactor equitable remand framework for §1452(b))