United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
L. WHITE UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' Motion to
Withdraw the Reference (ECF No. 1), seeking an order
withdrawing the reference of the contested matter from the
bankruptcy court to the district court for a jury trial.
Plaintiffs have filed a response in opposition, and
Defendants filed a reply brief. The motion is therefore fully
briefed and ready for disposition.
Darryl Lamar Allen ("Debtor"), the debtor in the
underlying bankruptcy action, filed for relief under Chapter
7 of the United States Bankruptcy Code on July 15, 2015.
Plaintiff David A. Sosne ("Trustee") is the duly
appointed Chapter 7 Trustee. On November 1, 2016, Plaintiffs
filed an Adversary Complaint against Defendants Critique
Services LLC, Beverly Holmes a/k/a Beverly Diltz
("Holmes-Diltz"), and Renee Mayweather
("Mayweather"), seeking damages related to
Defendants' representation of the Debtor in the
preparation and filing of his bankruptcy petition. On March
10, 2017, Holmes-Diltz and Mayweather filed a response to the
Complaint. On March 24, 2017, Holmes-Diltz filed an Amended
Answer and a Third Party Complaint against Plaintiffs'
counsel and firm ("Counsel"). In the answers and
the Third Party Complaint, Holmes-Diltz and Mayweather
requested a jury trial.
5, 2017, Third Party Defendants filed a Joint Motion to
Dismiss the Third Party Compliant by Holmes-Diltz, to which
Holmes-Diltz responded on June 16, 2017. After a hearing on
June 27, 2017, Kathy A. Surratt-States, Chief United States
Bankruptcy Judge for the Eastern District of Missouri entered
an order granting the Motion to Dismiss Third Party Complaint
on August 8, 2017. Four days earlier, on August 4, 2017,
Holmes-Diltz and Mayweather filed the instant Motion to
Withdraw the Reference, seeking a jury trial before this
Court's authority to withdraw the reference of a matter
to the bankruptcy court stems from § 157(d)."
In re Balsam Corp., 185 B.R. 54, 56 (Bankr. E.D. Mo.
1995). Under 28 U.S.C. § 157(d),
The district court may withdraw, in whole or in part, any
case or proceeding referred under this section, on its own
motion or on timely motion of any party, for cause shown. The
district court shall, on timely motion of a party, so
withdraw a proceeding if the court determines that resolution
of the proceeding requires consideration of both title 11 and
other laws of the United States regulating organizations or
activities affecting interstate commerce
28 U.S.C. § 157(d). "A party in an adversary
proceeding may waive its right to a jury trial by failing to
timely demand a jury trial under Fed.R.Civ.P. 38."
In re Balsam Corp. 185 B.R. at 58. However, under
bankruptcy law, "[a] litigant may also waive its Seventh
Amendment right to a jury trial by consenting explicitly or
tacitly to the jurisdiction of the bankruptcy court."
Id. (citations omitted). "In bankruptcy cases,
due to the structure of the bankruptcy court, additional
steps are required to perfect the jury demand. The failure to
complete these steps in the bankruptcy context ought to be
construed in precisely the same fashion as the failure to
file the requisite pleading contemplated by Rule 38 in an
ordinary civil trial context." In re Blackwell ex
rel. Estate ofl.G. Servs., Ltd., 279 B.R. 818, 820
the Local Rules of the Bankruptcy Court for the Eastern
District of Missouri, "[a] request to withdraw the
reference of a case or proceeding, in whole or in part, other
than a sua sponte request by the judge, shall be by motion.
Absent leave of Court, a party filing a motion to withdraw
the reference shall file the motion within 7 days of the
filing of the related pleading or response." L.R.
5011(A). Further, the local rule provides, "[t]his Rule
and the Local Rules of the United States District Court for
the Eastern District of Missouri regarding motion practice
and bankruptcy court matters shall govern the motion to
withdraw the reference and all proceedings related
thereto." L.R. 5011(C).
Court finds that Plaintiffs failed to timely file the Motion
to Withdraw the Reference, and therefore the motion will be
denied. The record shows that the motion was filed on August
4, 2017, nearly 5 months after Holmes-Diltz and Mayweather
filed their response to the Adversary Complaint. "A
party may waive its right to a jury trial by failing to move
timely to withdraw the reference." In re HA-LO
Indus., Inc., 326 B.R. 116, 123 (Bankr. N.D. 111. 2005)
(citation omitted). Here, Holmes-Diltz and Mayweather waived
their right to a jury trial by failing to file the motion to
withdraw the reference within the time period required by the
Local Rules. While Holmes-Diltz and Mayweather contend that
they timely sought a jury trial under Fed.R.Civ.P. 38 in
their response filed on March 10, 2017, the Court reiterates
that in bankruptcy proceedings, the additional step of filing
a timely motion to withdraw the reference is required.
"If neither party timely takes this additional step (the
essential last step to assure that one gets the jury they
desire before the tribunal they prefer), then that failure
can only be construed as a waiver of the party's right to
a jury trial." In re Blackwell, 279 B.R. at
820. Because Holmes-Diltz and Mayweather did not file the
present motion until nearly 5 months after they filed their
original answer and have not offered any reasons justifying
this delay, the Court denies the Motion to Withdraw the
Reference. See In re H & W Motor Express Co.,
243 B.R. 208, 214 (Bankr. N.D. Iowa 2006) (denying motion to
withdraw filed 5 months after the party filed its answer as
IT IS HEREBY ORDERED that Defendants'
Motion to Withdraw the ...