United States District Court, E.D. Louisiana
ORDER & REASONS
E. FALLON JUDGE
the Court is Defendants' motion to withdraw the
reference. R. Doc. 1. Plaintiff responds in opposition. R.
Doc. 3. Having considered the parties' briefs and the
applicable law, the Court issues this Order & Reasons.
case arises out of an alleged breach of contract for
services. No. 17-5851, R. Doc. 1-1 at 3. In August 2014,
Plaintiff Factory Sales & Engineering, Inc.
(“FSE”) entered into a services agreement
(“Agreement”) with Defendants American Sugar
Refining, Inc. (“ASR”) and Florida Crystals
Corporation (“FCC”). No. 17-5851, R. Doc. 1-1 at
3. The Agreement was amended in January 2016. No. 17-5851, R.
Doc. 1-1 at 4. On July 28, 2015, FCC, acting for its
affiliate, Defendant Osceola Farms Co. (“OFC”),
executed a Statement of Work (“SOW”) under the
Agreement. No. 17-5851, R. Doc. 1-1 at 4. The Agreement
provided a payment schedule allowing Defendants to retain 10%
of the contract price for the services until two weeks after
the work was completed. No. 17-5851, R. Doc. 1-1 at 4. The
Agreement also allows Defendants to satisfy liens on the
serviced property from the retained 10%. No. 17-5851, R. Doc.
1-1 at 5.
FSE alleges that it authorized Defendants to pay off the four
liens on the serviced property and asked for the remaining
retained payment. No. 17-5851, R. Doc. 1-1 at 5. Plaintiff
further alleges that Defendants have failed to pay the
balance of the 10% retainage. Therefore, Plaintiff claims
damages for breach of contract and unjust enrichment. No.
17-5851, R. Doc. 1-1 at 5.
timely removed this case on the basis of diversity. No.
17-5851, R. Doc. 1. On September 29, 2017, this Court
transferred the case to the District of the Bankruptcy Court
because Plaintiff was put into involuntary Chapter 7
bankruptcy. No. 17-5851, R. Doc. 11. Defendants now move the
Court to withdraw the reference to the bankruptcy court. R.
Doc. 1. Pending before the bankruptcy court is FSE's
motion for the bankruptcy estate to assume the relevant
move to withdraw the reference to the bankruptcy court and
transfer this case to the Southern District of Florida. R.
Doc. 1. First, Defendants argue that the reference should be
withdrawn because the matter is a non-core, Florida state law
claim, the bankruptcy is involuntary, and this Court will be
required to review de novo the decision of the
bankruptcy court. R. Doc. 1 at 5-6. Second, Defendants ask
the Court to transfer the case because Florida law governs
the claims, evidence is located in the Southern District of
Florida, Plaintiff conducted business in Florida, Plaintiff
is liquidating in bankruptcy, and Defendants are located in
Florida. R. Doc. 1 at 6-7.
responds in opposition arguing that the withdrawal factors
weigh against granting Defendants' motion. R. Doc. 3.
First, Plaintiff argues that this contract claim is a core
proceeding because it will necessarily overlap with the
bankruptcy court's determination of the motion to assume
the contract. R. Doc. 3 at 8. Second, Plaintiff argues that
because of these overlapping issues, withdrawal of the claim
from the bankruptcy court is likely to lead to inconsistent
results, disruption of the bankruptcy proceeding, and a waste
of time and resources. R. Doc. 3 at 9-10.
Plaintiff argues that it is not forum shopping because the
contract was signed and partially executed in Louisiana and
it had no control over where the bankruptcy proceeding was
filed by its creditors. R. Doc. 3 at 11. Finally, Plaintiff
argues that the lack of jury demand weighs against
withdrawal. R. Doc. 3 at 12.
Plaintiff argues that this case should not be transferred
because Defendants have not met any requirements for
transfer. R. Doc. 3 at 13. Plaintiff argues that transfer
would not be in the interests of justice because of the
strong presumption of venue with the bankruptcy court and
inefficiencies that would result from withdrawal and
transfer. R. Doc. 3 at 13. Plaintiffs also argue that
transfer of the case would cause inconvenience to all parties
because they would be required to try the overlapping issues
in two courts. R. Doc. 3 at 14-15.