- Case No. 12-11811
- Adv. No. 13-1022
Soundra Temple Johnson, et al. v. Woodlands Development, LLC, et al., Adv. No. 13-1022. ISSUES: Whether the court should dismiss or abstain from considering the plaintiffs/debtors' amended complaint for declaratory judgement regarding ownership insurance proceeds, objecting to claims and seeking to avoid preferential transfers; whether the court should dismiss or abstain from considering the cross-claim filed by Regions Bank seeking a ranking of claims to the insurance proceeds.
RULING: The court concluded that: (1) using the standard for ruling on motions for failure to state a claim under Fed. R. Bankr. Proc. 7012(b) enunciated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and In re Katrina Canal Breaches Litigation, 495 F.3d 191 (5th Cir. 2007), the claims of the plaintiffs' amended complaint were sufficient to "state a claim that is plausible on its face;" (2) that there were no grounds for mandatory abstention under 28 U.S.C. §1334(c)(2) or for permissive abstention under 28 U.S.C. §1334(c)(1); but (3) that the pronouncements of Stern v. Marshall, ___ U.S. ___, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), as explained by the Fifth Circuit in In re BP RE, L.P., 735 F.3d 303 (5th Cir. 2013), regarding the bankruptcy court's authority to issue a final ruling on the claims of the plaintiffs' amended complaint raised sufficient concerns that the court required the parties to consent to bankruptcy court jurisdiction or move to withdraw the reference of the case to the United States District Court.