United States District Court, W.D. Louisiana, Shreveport Division
DAVID M. DOOLEY, SR., ET AL.
MB INDUSTRIES, L.L.C., ET AL.
MAURICE HICKS, JR., CHIEF JUDGE.
the Court is Petitioners David M. Dooley, Sr., individually
and as Trustee for the BD 2008 Family Trust No. 1, Brenda
Dooley, individually and as Trustee for the DMD 2008 Family
Trust No. 1, David M. Dooley, Jr., and Chris Vallot's
(collectively the “Dooley Parties”)
“Renewed Motion to Withdraw Reference” (Record
Document 28) re-urging their previous Motion to Withdraw
Reference (Record Document 1). Defendants Carmel Enterprises,
LLC, Carmel Foods, LLC, Carmel Group, Inc., X-Treme Doors,
LLC, Frederick J. Gossen, Jr. (“Gossen”),
Hallwood Financial Limited, Hallwood Modular Buildings, LLC,
Gert Lessing (“Lessing”), and Anthony Gumbiner
(“Gumbiner”) (collectively the
“Defendants”) have opposed the Motion.
See Record Document 31. For the reasons contained
herein, the Dooley Parties' Motion is
March 1, 2018, the Court denied the Dooley Parties'
initial Motion to Withdraw Reference, finding the Dooley
Parties had waived their right to a jury trial for their
rescission claims because said claims would
“necessarily require the resolution” of the
Dooley Parties' claims against the debtor, MBI
Industries, LLC, and were “integral to the
restructuring of the debtor-creditor relationship.”
See Record Document 25 at 27. Later in the ruling
the Court, addressing the Dooley Parties' argument that
they properly requested a jury trial for the Defendants'
counterclaims, stated, “[i]f it is determined at a
later date that Defendants' counterclaims require a jury
trial, then the Dooley Parties may seek withdrawal at that
time; but for now, the Court finds it more appropriate for
the matter to remain in Bankruptcy Court.” Id.
April 19, 2018, the Dooley Parties filed the instant
“Renewed Motion to Withdraw Reference” re-urging
their initial motion since “all pretrial matters
[relating to the counterclaims] have been completed.”
Record Document 28-1 at 2. The Dooley Parties argue that
since the constitutional right to a jury trial has been
invoked with respect to the Defendants' counterclaims,
their motion to withdraw should be granted. See id.
at 4. The Defendants opposed the motion on April 30, 2018,
arguing primarily that the Dooley Parties' renewed motion
is premature. See Record Document 31 at 7.
Dooley Parties argue the Court in its Memorandum Ruling
reserved them the right to “re-file the motion [to
withdraw the reference] after the Bankruptcy Court completed
preliminary matters relating to the counterclaims filed
against [the Dooley Parties].” Record Document 28-1 at
1-2. However, the Dooley Parties misconstrued the Court's
pronouncement in its Memorandum Ruling. The Court stated,
““[i]f it is determined at a later date that
Defendants' counterclaims require a jury trial, then the
Dooley Parties may seek withdrawal at that
time….” Record Document 25 at 28. It is clear
from the Court's ruling that a precondition for the
Dooley Parties re-urging their Motion to Withdraw Reference
is that the Bankruptcy Court determine that the Dooley
Parties have a right to a jury trial first. Any other
interpretation of the Court's statement is illogical. The
Court did not instruct the Dooley Parties to re-urge their
motion once “all pretrial matters [relating to the
counterclaims] have been completed.” The Dooley
Parties' argument is incorrect.
Bankruptcy Court determines that the Dooley Parties have a
right to jury trial on the counterclaims, then the Dooley
Parties may re-file their motion to withdraw reference. As
Defendants assert, “[a] bankruptcy court is an
appropriate tribunal for determining whether there is a right
to a trial by jury of issues for which a jury trial is
demanded.” Am. Universal Ins. Co. v. Pugh, 821
F.2d 1352, 1355 (9th Cir. 1987); In re Energy Res. Co.,
Inc., 49 B.R. 278, 281 (Bankr. D. Mass. 1985); In re
Washington Mfg. Co., 133 B.R. 113, 116 (M.D. Tenn.
1991); In re Envisionet Computer Servs., Inc., 276
B.R. 1, 6 (D. Me. 2002); In re Commercial Maint. &
Repair, Inc., 2007 WL 2815211, *3 (N.D. Ohio 2007)
(reasoning that the right to a jury trial is not itself a
jury question; therefore, the bankruptcy court could
determine this issue itself); see also In re Wolfe,
68 B.R. 80, 88 (Bankr. N.D. Tex. 1986), approved sub nom.
M & E Contractors, Inc. v. Kugler-Morris Gen.
Contractors, Inc., 67 B.R. 260 (N.D. Tex. 1986),
citing Hayutin v. Grynberg, 52 B.R. 657, 660 (Bankr.
D. Colo. 1985) (“Regardless of whether this court has
the authority to hear jury trials, it still possesses the
power to determine whether there is a right to trial by
jury.”). It is clear that the Bankruptcy Court has not
determined whether the Dooley Parties are entitled to a jury
trial since the Dooley Parties bring this argument before
this Court, and not the Bankruptcy Court. Until the
Bankruptcy Court determines the Dooley Parties are entitled
to a jury trial regarding Defendants' counterclaims, the
Dooley Parties' renewed motion is premature.
to the Court's Memorandum Ruling issued March 1, 2018,
the Dooley Parties cannot re-urge their Motion to Withdraw
Reference until the Bankruptcy Court determines they are
entitled to a jury trial regarding the Defendants'
counterclaims. See Record Document 25 at 28. The
Dooley Parties have failed to bring this issue before the
Bankruptcy Court. Therefore, the Dooley Parties'
“Renewed Motion to Withdraw Reference” (Record
Document 28) is DENIED as premature.