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Jalbert v. Wessel GMBH

United States District Court, W.D. Louisiana, Lafayette Division

July 25, 2019

JALBERT
v.
WESSEL GMBH

          WHITEHURST MAGISTRATE JUDGE.

          MEMORANDUM RULING AND JUDGMENT

          MICHAEL J. JUNEAU UNITED STATES DISTRICT JUDGE.

         Currently pending before the Court is a “Motion to Withdraw Reference, ” Rec. Doc. [1], filed by Wessel GmbH Fördertechnik und Pelletieranlagen (“Wessel”) pursuant to 28 U.S.C. § 157(d), Fed. R. Bank. P. 5011, and Local Rule 83.4.3., to withdraw the reference to the bankruptcy court of all claims asserted by Craig Jalbert, the Chapter 11 Liquidating Trustee of Louisiana Pellets, Inc. and German Pellets Louisiana, LLC (collectively “Plaintiffs”) against Wessel, [1] and an Opposition filed by the Plaintiffs, Rec. Doc. [5]. For the following reasons, the motion is DENIED.

         I. Background

         On February 16, 2018, Plaintiffs filed a complaint[2] for recovery of alleged fraudulent transfers alleging that Wessel received numerous avoidable transfers. Wessel answered the Complaint on June 13, 2018 and filed an amended answer on June 18, 2018.[3] In both answers Wessel stated, “JURY TRIAL IS DEMANDED AS TO ALL ALLEGATIONS, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS IF ANY” and objected to the entry of final orders by the bankruptcy court.[4]

         On August 23, 2018, the bankruptcy court entered a Scheduling Order and set a bench trial date for February 21, 2019.[5] At the request of the parties, on December 19, 2018 the deadlines were extended, and the hearing on pretrial motions and the trial were reset for April 12, 2019.[6] The parties then engaged in discovery until March 22, 2019, when Wessel filed a Motion to Continue Trial Setting[7] requesting that the bankruptcy court delay the April 12, 2019 trial date until after the resolution of the Motion for Summary Judgment he intended to file.

         In accordance with the Scheduling Order, on March 25, 2019, Wessel filed a Motion for Summary Judgment, [8] which was set for hearing on April 12, 2019 - the day of the trial. Wessel filed the instant Motion to Withdraw the Reference, Rec. Doc. [1], on April 3, 2019, a mere nine (9) days before the trial was scheduled to begin. He then on April 10, 2019 filed an Amended Pretrial Stipulation acknowledging “that this is a bench trial, but without conceding any of the arguments made in the recent motion to withdraw the reference pending before the district court.”[9] On April 12, 2019, the bankruptcy court denied Wessel's Motion for Summary Judgment, held the bench trial and took the merits of the matter under advisement.[10] On June 21, 2019, the bankruptcy court entered judgment in favor of Wessel, and against Jalbert, [11] and on July 3, 2019, Jalbert filed an appeal in this Court.[12]

         Wessel requests this Court to withdraw the adversary proceeding from the bankruptcy court pursuant to 28 U.S.C. § 157(d), Fed. R. Bank. P. 5011, and Local Rule 83.4.3 and to allow the matter to proceed before this Court, Rec. Doc. [1], claiming cause exists for the withdrawal of this matter because: (1) Wessel has asserted the right to a jury trial under the Seventh Amendment of the United States Constitution and does not consent to the bankruptcy court conducting a jury trial and (2) Plaintiff's fraudulent conveyance claims may not be tried by the bankruptcy court pursuant to Stern v. Marshall, 131 S.Ct. 2594, (2011) reh'g denied, 132 S.Ct. 56, (U.S. 2011). Plaintiffs oppose the Motion, Rec. Doc. [5].

         II. Discussion

         Although Wessel initially requested a jury in its answers, Wessel's subsequent conduct shows its consent to proceed before the bankruptcy judge in a bench trial. Wessel's conduct includes:

(1) participation in a pre-trial scheduling conference which set a bench trial in the bankruptcy court, [13]
(2) filing two joint motions to set new bench trial dates in the bankruptcy court, [14]
(3) filing a Motion to Continue the Trial Setting in the bankruptcy court, [15]
(4) filing a Motion for Summary Judgment to have the Trustee's suit resolved by the bankruptcy ...

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