Opinion
A04-58 CIV (JWS).
September 17, 2004
I. BACKGROUND
It is appropriate to begin with a brief recitation showing events relevant to this court's decision to withdraw in part the reference to the Bankruptcy Court. The chronology is as follows:
The background in this case is extensively set forth in the Order From Chambers at docket 114 and is not replicated here except as necessary to an understanding of the instant order.
August 28, 2000 — Plaintiffs Certain Underwriters of Lloyds, London issued Insurance Certificate OP01 0025.
August 28, 2001 — Certificate OP01 0025 was renewed for another year.
October 19, 2001 — Inlet Fisheries, Inc. filed a voluntary petition under chapter 11 of the Bankruptcy Code, Case No. A-01-01134 in the United States Bankruptcy Court, District of Alaska.
August 26, 2002 — The Quanirtuuq Princess, an asset of defendant Inlet Fisheries, Inc., sank in the Steamboat Slough near Bethel, Alaska, resulting in a spill of oil and toxic substances.
April 28, 2002 — Certificate OP01 0025 was renewed for another year.
September 16, 2002 — The Bankruptcy Court entered its order confirming the Chapter 11 Liquidating Plan of Inlet Fisheries, Inc., ("Inlet Plan") which order became effective September 26, 2002.
Part IV.B. of the Inlet Plan contains an express reservation of exclusive jurisdiction in the bankruptcy court until such time as the bankruptcy case is closed as to the following matters:
"1. classification and allowance of claims;
"5. allowance of applications for payment of Administrative Expenses, * *
"6. resolution of all causes of action, controversies, questions, and disputes regarding title to estate assets."
According to the record of the Bankruptcy Court, In re Inlet Fisheries, Inc., Bankruptcy Case No. A-01-01134, has not been closed, and no final decree has been entered.
II. DISCUSSION
This court has an obligation to examine sua sponte its jurisdiction in this matter. It is clear from the record in this court and the records of the Bankruptcy Court that the claims for which coverage is at issue in the instant lawsuit arose during the pendency of the chapter 11 proceedings and prior to the time the bankruptcy court entered its order confirming the Inlet Plan and are, therefore, post-petition pre-confirmation claims against the bankruptcy estate. It is also clear that the Insurance Certificate that is the subject matter of this action was an asset of the bankruptcy estate. The bankruptcy court having specifically reserved exclusive jurisdiction over the matters affecting interests in assets of the estate, jurisdiction is properly in that court, to which this court has made a general reference of all matters arising under title 11 of the United States Code.
See Bender v. Williamsburg Area School District, 745 U.S. 534, 541 (1986).
11 U.S.C. § 5419a) (1); see Home Insurance Co. of Illinois v. Adco Oil Co., 154 F.3d 739, 741 (7th Cir. 1998); Homsy v. Floyd ( In re Vitek, Inc.), 51 F.3d 530, 535 (5th Cir. 1995) A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1001 (4th Cir.) (holding that insurance policies existing at time of petition are property of estate), cert. denied, 479 U.S. 876 (1986).
See, e.g., Schwartz v. Aquatic Development Group, Inc. ( In re Schwartz), 352 F.3d 671, 673-74 (2nd Cir. 2003); Ernst Young, LLP v. Baker O'Neal Holdings, Inc., 304 F.3d 753, 756 (7th Cir. 2002); Universal Seismic Associates, Inc. v. Harris County ( In re Universal Seismic Associates, Inc.), 288 F.3d 205, 206 (5th Cir. 2002); Bergstrom v. Dalkon Shield Claimants Trust ( In re A.H. Robins Co., Inc.), 86 F.3d 364, 373 (4th Cir. 1996).
Miscellaneous General Order 503 (on file with the Clerk of the Court); see also 28 U.S.C. § 157(a).
This court may withdraw for cause on its own motion, in whole or in part, any case referred to the bankruptcy court.
In determining whether cause exists, the district court should consider the efficient use of judicial resources, delay and costs to the parties, uniformity of bankruptcy administration, the prevention of forum shopping, and other related factors.
Security Farms v. International Brotherhood of Teamsters, Chauffers, Warehousemen, Helpers, 124 F.3d 999, 1008 (9th Cir. 1997)
A district court should also take into consideration whether the matter depends on bankruptcy law for its existence or whether the outcome is dependent upon non-bankruptcy law. It also necessary that the district court articulate its reasons for withdrawing the reference.
Id.
Canter v. Canter ( In re Canter), 299 F.3d 1150, 1154 (9th Cir. 2002)
After consultation with and the concurrence of the bankruptcy court, this court has determined that withdrawal of the reference of the dispute in the case at bar is appropriate. This action was initiated by the plaintiffs in the U.S. District Court for the Western District of Washington in April 2003 and has been pending in this court since March of this year, after transfer from the Western District of Washington. This court has already issued its pretrial orders, entered rulings on motions, has pending before it motions that are ripe for decision, and is generally already familiar with the legal and factual issues presented; these efforts would have to be duplicated by the bankruptcy court if the matter were transferred to it. In addition, transfer of this matter to the bankruptcy court could result in additional delay. Withdrawal of the reference is in the interests of judicial efficiency and will likely prevent additional cost and/or delay to the parties. Significantly, resolution of this case on the merits depends on principles of admiralty and/or state law; its outcome is not dictated or effected, directly or indirectly by bankruptcy law.
III. ORDER
Based on the preceding discussion, IT IS ORDERED:
(1) The reference to the United States Bankruptcy Court for the District of Alaska of In re Inlet Fisheries, Inc., Bankruptcy Case No. A01-01134, and those matters related thereto, is WITHDRAWN IN PART as to all matters, issues, and controversies embraced within the dispute framed by the pleadings in Case No. A04-58 CV (JWS), the case at bar.
(2) The Clerk of Court shall transmit a certified copy of this Order to the Clerk of the United States Bankruptcy Court for the District of Alaska.