United States District Court, M.D. North Carolina
For UDX, LLC, Plaintiff, Counter Defendant: C EVAN LOHR, LEAD ATTORNEY, HANSEN LAW FIRM, PLLC, RALEIGH, NC; AARON Z. TOBIN, J. SETH MOORE, KENDAL B. REED, ANDERSON TOBIN, PLLC, DALLAS, TX; LINDSEY E. POWELL, ANDERSON JONES, PLLC, RALEIGH, NC.
For JAMES A HEAVNER, Defendant, Counter Claimant: RICHARD M. HUTSON, II, HUTSON HUGHES & POWELL, DURHAM, NC.
MEMORANDUM OPINION AND ORDER
Thomas D. Schroeder, United States District Judge.
Before the court are the motion of Defendant James A. Heavner to refer this case to the bankruptcy court for consideration with related proceedings (Doc. 17) and the competing motion of Plaintiff UDX, LLC (" UDX" ) for abstention and remand (Doc. 19). For the reasons set forth below, UDX's motion will be denied, Heavner's motion will be granted, and the case will be referred to the bankruptcy court.
On October 22, 2014, UDX, a North Carolina limited liability company, initially filed suit in State court against several companies -- University Directories, LLC; Vilcom, LLC; Vilcom Interactive Media, LLC; Vilcom Properties, LLC; Vilcom Real Estate Development, LLC, (collectively, the " Corporate Defendants" ) -- as well as Heavner, University Directories, LLC's manager and allegedly the registered agent for at least one of the other Corporate Defendants. (Doc. 24 ¶ ¶ 1-2; Doc. 2 ¶ ¶ 4-5.) The lawsuit arises out of certain loans made by Harrington Bank, FSB, now held by UDX and allegedly guaranteed by Heavner, and raises numerous State law claims regarding them. (See Doc. 2 ¶ ¶ 2-8, 30-67.) On October 24, 2014, Corporate Defendants filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code; the bankruptcy case is assigned Case No. 14-81184. (Doc. 1 ¶ 4; Doc. 24 ¶ 15.)
On October 31, 2014, Corporate Defendants removed this action to this court pursuant to 28 U.S.C. § 1452, contending that this court has jurisdiction because the action arises under Title 11 or arises in or relates to cases under Title 11. (Doc. 1.) The Corporate Defendants then moved to refer UDX's claims against them to the pending bankruptcy case. (Doc. 11.) On November 6, UDX voluntarily dismissed all of its claims against the Corporate Defendants, mooting the Corporate Defendants' motion and leaving Heavner as the only defendant. (Doc. 13.)
On December 23, 2014, Heavner filed the current motion to refer this case to the bankruptcy court on the grounds that the case relates to Case No. 14-81184. (Doc. 17.) Heavner also answered UDX's original complaint. (Doc. 18.) UDX responded to Heavner's motion (Doc. 19) and, contrary to this district's local rules, titled a section of its response brief " motion for abstention and remand" (id. at 4-6). See Local Rule 7.3 (requiring that all motions be accompanied by a brief and be " set out in a separate pleading" ). After filing its response, UDX also amended its complaint,
asserting three causes of action under North Carolina law against Heavner: breach of contract, defamation, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1. (Doc. 24 ¶ ¶ 20-38.)
Filing no reply on his motion to refer, Heavner nevertheless responded to UDX's request for abstention and remand (Doc. 25), to which UDX replied (Doc. 32). Heavner also answered UDX's amended complaint. (Doc. 26.) With UDX's motion fully briefed and the time for Heavner's reply on his motion to refer having expired, the motions are now ripe for consideration.
The parties seek different forums for adjudication of this case. Heavner seeks to have the case referred to the bankruptcy court. (Doc. 17.) UDX argues that the court must abstain and moves the court to equitably remand the case to the ...