United States District Court, N.D. Alabama, Southern Division
GUY V. FORRESTER, SR., and KIMBERLY M. FORRESTER, Plaintiffs,
MIDFIRST BANK, Defendant. v.
MEMORANDUM OPINION AND ORDER
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE.
case is before the Court on MidFirst Bank's amended
motion to withdraw the general order of reference pertaining
to an adversary proceeding that the Forresters filed against
MidFirst in bankruptcy court. (Doc. 4).
August 16, 2013, plaintiffs Guy and Kimberly Forrester filed
a Chapter 13 bankruptcy petition. (Doc. 4, ¶ 1; Doc. 6,
¶ 6). The Forresters included in their Schedule D a
secured mortgage debt and identified MidFirst Bank as a
secured creditor. (Doc. 4, ¶ 1; Doc. 6, ¶ 2). While
the bankruptcy proceedings were pending, on at least three
occasions, MidFirst mailed a “Bankruptcy Message”
to the Forresters. (Doc. 6, ¶ 3; Doc. 6-1; Doc. 6-2;
Doc. 6-3). The document states:
records show that you are a debtor in bankruptcy. We are
sending this statement to you for
informational and compliance purposes only. It is not an
attempt to collect debt against you. If your
bankruptcy plan requires you to send your regular monthly
mortgage payments to the Trustee, you should pay the Trustee
instead of us. Please contact your attorney or the Trustee if
you have questions.
you want to stop receiving statements, write to us.
FORMAT AND PROOF AGAINST DOCS] (Doc. 6-1, p. 1; Doc. 6-2, p.
1; Doc. 6-3, p. 1).
response, the Forresters filed an adversary proceeding in the
bankruptcy court. (Doc. 6, ¶ 4). The Forresters contend
that MidFirst's mailings constitute demands for payment
that violate the automatic bankruptcy stay under 11 U.S.C.
§ 362(a)(3). (Doc. 6, ¶ 3). Pursuant to 28 U.S.C.
§ 157(d), MidFirst asks the Court to withdraw the
reference and exercise jurisdiction over the adversary
proceeding. (Doc. 4).
courts possess “original and exclusive
jurisdiction” of cases under Title 11 of the Bankruptcy
Code. 28 U.S.C. § 1334. A district court may refer those
cases to a bankruptcy court. 28 U.S.C. § 157(a)
(“Each district court may provide that any or all cases
under title 11 and any or all proceedings arising under title
11 or arising in or related to a case under title 11 shall be
referred to the bankruptcy judges for the district.”).
This Court has issued a general order of reference for
bankruptcy matters. Pursuant to § 157 (d), the Court
“may withdraw, in whole or in part, any case or
proceeding referred under this section, on its own motion or
on timely motion of any party, for cause shown.” 28
U.S.C. § 157(d). The Court must “on timely motion
of a party, so withdraw a proceeding if the court determines
that resolution of the proceeding requires consideration of
both title 11 and other laws of the United States regulating
organizations or activities affecting interstate
commerce.” 28 U.S.C. § 157(d).
Court grants MidFirst's motion to withdraw the general
order of reference with respect to the Forresters'
adversary proceeding because MidFirst has shown good cause
for doing so. There are multiple adversary proceedings
pending in this district against MidFirst, and those
proceedings will require interpretation of regulations that
the Consumer Protection Financial Bureau recently enacted.
The Forresters acknowledge that MidFirst's affirmative
defense concerning the regulations presents a question of
first impression that “requires the material
consideration of non-bankruptcy law.” (Doc. 6, p. 5).
Because the issues in the adversarial proceeding require the
material consideration of non-bankruptcy law and because a
decision by the bankruptcy court on a question of first
impression likely would generate an appeal to this Court,
withdrawal of the reference will promote efficient use of the
parties' and the Court's resources. Dionne v.
Simmons (In re Simmons), 200 F.3d 738, 742 (11th Cir.
pending before the Court is the parties' joint motion to
consolidate. (Doc. 9). Pursuant to Rule 42 of the Federal
Rules of Civil Procedure, the parties ask the Court to
consolidate this matter with other related matters pending in
this district. As a matter of settled practice, when parties
ask to consolidate related cases in this district, the cases
typically are consolidated by and before the judge presiding
over the first-filed case. The practice prevents judge
shopping. The Forresters' case, Case No.: 18-CV-1392, is
the first-filed case among the cases that the parties seek to
consolidate, but the parties have asked that their cases be
joined in Case No. 5:18-CV-01398-LCB. The parties' motion
to consolidate does not offer a reason for a deviation from
this Court's practice. (Doc. 9). Therefore, the Court
denies without prejudice the parties' joint motion to
consolidate the related adversarial proceedings before Judge
Burke. Judge Burke should decide whether the parties can show
good cause for an exception to the Court's practice.
Court asks the Clerk to please term Docs. 1, 4, and 9.