Drew et al v. Hart et al

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United States Bankruptcy Court

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NO oO FP Wo Ne FP OO UO WAN DH FPF WwW NY FPF OO

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AUTHENT]

Entered on Docket
December 30, 2011

GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

The following constitutes
the order of the court. Signed December 29, 2011

wouremasmer 7] fT

William Yyltg | Latierty, Ul
OAKLAND DIVES, ptcy Judge

In re DEBRA A FART,

Case No. 11-42424 WL

Debt or. Chapter 7

GARY DREW and J ANEITTE DREW
Plaintiffs,

Adv. Proc. No. 11-4175

Vv.
DEBRA A. HART, et al.,
Def endants.

MEMORANDUM OF DECISION AND ORDER GRANIT NG MOITON TO DLSM SS
ADVERSARY PROCEEDING AS ‘TO NON DEBTOR DEFENDANIS

Se a a ee Ne a a a

On Decenber 7, 2011, this matter cane on for hearing on
defendant Clyde Hart and defendant Lance Hart’s notion to dismss
the adversary proceeding. Followng the hearing, the Court took
the matter under submssion. For the followng reasons, the
Court is disinclined to adjudicate the Section 523 non-
dischargeability action as to the non-debtor defendants and

therefore grants the notion to dismss wthout leave to anend.

INFORMAION

GPO

ER od 11-04175 Doc# 33 Filed: 12/29/11 Entered: 12/30/11 16:12:57 Page1of4

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The adversary proceeding was filed by Plaintiffs Gary and
Janette Drew on June 4, 2011. 	The complaint names debtor Debra
A. Hart, as well as non-debtors Clyde Hart and Lance Hart as
defendants. 	Defendants Clyde and Lance Hart moved to dismiss on
the ground that the Court does not have jurisdiction to enter a
judgment against non-debtor defendants.
Defendant Lance Hart previously filed a Chapter 7 bankruptcy
in 2009, and received a discharge in 2010. 	As Lance Hart is not
a debtor in this case, the adversary proceeding against him must
be dismissed. 	Any action against him would be properly brought
under the auspices of his own case (Case No. 09-71053). 	If that
case is re-opened and Plaintiffs proceed with an adversary
proceeding therein, the Court will be willing to consider a
motion to consolidate the cases at the appropriate time.
Pursuant to Sections 1334(b) and 157(c), subject matter
jurisdiction in this Court is limited to proceedings “arising
under title 11 or arising in or related to a case under title
11.” 	Defendant Clyde Hart does not have a bankruptcy case
pending before this Court, nor has he ever filed for bankruptcy.
The non-dischargeability action against Clyde Hart cannot be said
to arise under, arise in or relate to Debra Hart’s bankruptcy
case. 	It does not “arise under” Debra Hart’s case because the
U.S. Bankruptcy Code does not provide a basis for relief in an
action by a non-debtor plaintiff against a non-debtor defendant.
Nor does this matter “arise in” a case under Title 11 because it
is not a matter that would have no existence outside of a
bankruptcy case. 	As this defendant is a non-debtor, a cause of
action on these facts would be more appropriately asserted in
Case: 11-04175 Doc# 33 Filed: 12/29/11 Entered: 12/30/11 16:12:57 Page 2 of 4

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another court.
Lastly, contrary to plaintiffs’ assertions, this matter is
not “related to” a case under Title 11. 	Plaintiffs’ reliance on
Pacor v. Higgins is misplaced. 	743 F.2d 984, 994 (9 th . Cir.
1984). 	Pacor held that an action is “related to” bankruptcy “if
the outcome could alter the debtor's rights, liabilities,
options, or freedom of action (either positively or negatively)
and which in any way impacts upon the handling and administration
of the bankrupt estate.” 	Even under this liberal standard, the
action as to Clyde Hart must be dismissed. 	The Court notes that
the Trustee in this case filed a Report of No Distribution on
June 9, 2011, indicating that there are no assets in Debra Hart’s
estate to be administered for the benefit of her creditors.
While this does not affect a creditor’s right to liquidate a debt
against the debtor, and pursue the collection of that debt if the
Court determines the debt to be non-dischargeable, it makes it
absolutely clear that a finding of liability against Clyde Hart
simply would have no impact whatsoever on the bankruptcy estate
of his wife, Debra Hart.
CONCLUSION
Based on the foregoing, the motion to dismiss the adversary
proceeding as to defendants Clyde Hart and Lance Hart is GRANTED.
**END OF DOCUMENT**
Case: 11-04175 Doc# 33 Filed: 12/29/11 Entered: 12/30/11 16:12:57 Page 3 of 4

COURT SERVICE LIST
Case: 11-04175
Doc# 33 Filed: 12/29/11 Entered: 12/30/11 16:12:57
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