United States District Court, W.D. Missouri, Central Division
NANETTE K. LAUGHREY United States District Judge
matters are pending before the Court. One is a motion to
reconsider filed by Bruce Cole and Nanette Cole, Doc. 53,
with respect to an Order entered by the Court concerning a
discovery dispute, Doc. 50. The Court has also entered an
order to show cause, directing the parties to address whether
the Court has subject matter jurisdiction to resolve the
reasons discussed below, the Court concludes that while it
does have subject matter jurisdiction of the dispute, it also
has the authority to refer the dispute to the Bankruptcy
Court for further proceedings, and referral is appropriate
here. Accordingly, the Court will refer the dispute to the
Bankruptcy Court for further proceedings, and denies the
Coles' motion to reconsider as moot.
case originally came before the Court in 2013, on Bruce and
Nanette Coles' appeal of a Bankruptcy Court order entered
against them in an adversary proceeding, concerning avoidance
and recovery of fraudulent or preferential transfers. The
Court treated the Bankruptcy Court's order as proposed
findings of fact and conclusions of law, and granted partial
summary judgment to Trustee Strauss. Docs. 26 and 28. The
Eighth Circuit Court of Appeals affirmed. Doc. 32.
the mandate issued, the Trustee as judgment creditor served
the Coles with written discovery in aid of execution,
specifically, requests for production of documents captioned
in the style of this District Court case. See Doc.
47-2. The Coles asked the Trustee for additional
time to respond. The Trustee did not consent to giving them
additional time, but did tell the Coles that they could
produce documents on a rolling basis or as documents became
available to them.
Coles subsequently filed motions in this Court, requesting 60
additional days in which to respond, Doc. 36 (filed 6/3/2016)
and Doc. 39 (filed 6/9/2016), which the Trustee
opposed. The Coles argued that the requests were
extensive, they had objections to the requests, and it was
difficult to respond to the requests in view of Bruce
Trustee argued that the Coles had not identified good faith
objections to the discovery. The Court denied the Coles'
motions and further ordered:
On the Court's own motion, the Coles are granted 30 days
from the date of this order -- until 7/8/2016 -- to produce
the documents and tangible things requested in the
Trustee's First Request for Production. The 30 days
addresses any complications owing to Bruce Cole's
incarceration. But the Coles' failure to timely respond
to the Trustee's First Request for Production will be
treated as a waiver of any objections they may have had to
the First Request for Production. The Trustee has attempted
to work with them, for example by agreeing to accept
production on a rolling basis, but the Coles have not worked
with the Trustee. Further, both Coles are trained attorneys.
Doc. 40 (Order of 6/8/2016).
Cole moved for reconsideration. Doc. 41. Nanette Cole moved
to join the request and asked for entry of a protective
order. Doc. 42. They argued that notwithstanding their
previously-filed motion for a 60-day extension, they had
nonetheless timely served the Trustee with written responses
and objections to the Trustee's requests for production.
They also requested more time in which to produce the
materials requested. The Trustee advised the Court that the
Coles had timely served their written responses and
objections, but opposed a further extension. The Trustee also
stated that he had advised Nanette Cole that he would agree
to entry of a protective order, but she had not communicated
any proposed terms. Doc. 45. The Court granted the motion for
reconsideration in part and set aside the portion of its
prior order about waiver of objections to the requests for
production, but denied the request for additional time to
respond. Doc. 50. The Court also ordered the parties to
submit proposed language for a protective order. Id.
Court subsequently entered an order on its own motion,
directing the parties to show cause why it should not deny
all further relief related to discovery disputes, for lack of
subject matter jurisdiction:
Upon further reflection, the Court is concerned about its
subject matter jurisdiction to resolve the discovery issues
the Coles are presenting to the Court. Because federal courts
are courts of limited jurisdiction, this Court may raise sua
sponte issues of subject matter jurisdiction, even if the
parties concede the issues. Thomas v. Basham, 931
F.2d 521, 523 (8th Cir. 1991). A district court has
jurisdiction to hear appeals from final orders of a
bankruptcy court, pursuant to 28 U.S.C. § 158(a)(1), and
from interlocutory orders with leave of the court, pursuant
to 28 U.S.C. § 158(a)(3). See In re M & S
Grading, Inc., 526 F.3d 363, 368 (8th Cir. 2008).
Further, an appeal from a bankruptcy court order does not
divest the bankruptcy court of jurisdiction with respect to
matters not raised and decided in the order appealed from.
See In re J. M. Fields, Inc., 8 B.R. 638, 641
(Bankr. S.D.N.Y. 1981) (and citations therein) and In re
Brown, 2007 WL 3326684, at *1 (M.D. Fla. Nov. 6, 2007)
(and citations therein). Bruce Cole and Nanette Cole's
discovery disputes with ...