Alberts, Trustee v. Gietz Master Builders, A.C.C.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREATER SOUTHEAST COMMUNITY
HOSPITAL CORP. , et al.,
Debtors.
____________________________
SAM J. ALBERTS, TRUSTEE FOR
THE DCHC LIQUIDATING TRUST,
Plaintiff,
v.
GARY GIETZ MASTER BUILDERS,
A.C.C.,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 02-02250
(Chapter 11)
Adversary Proceeding No.
04-10453
MEMORANDUM DECISION RE JURY
TRIAL ISSUE AND MAKING RECOMMENDATION
TO DISTRICT COURT REGARDING MOTION TO WITHDRAW THE REFERENCE
The Bankruptcy Court concludes that the right to a jury
trial in this adversary proceeding has not been waived, and that
any jury trial would have to be conducted before a District
Judge, but that certain motions could appropriately be disposed
of in the Bankruptcy Court that might moot the necessity of a
jury trial. 	Accordingly, the Bankruptcy Court recommends that
The decision below is signed as a decision of
the court.
Signed: August 16, 2007.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 1 of 10

2
the District Court act on the pending Motion to Withdraw the
Reference (pending as Miscellaneous No. 05-00304-TFH in the
District Court) by entering an order that directs that the
District Court will enter an order withdrawing the reference as
to a count of the Amended Complaint if, as to that count,
notification (accompanied by a proposed order) is filed in
Miscellaneous No. 05-00304-TFH in the District Court advising
that:
(1) the Bankruptcy Court has denied all timely filed
motions for summary judgment as to that count; or
(2) the Bankruptcy Court has granted a motion to
determine that the count could not be referred to the
Bankruptcy Court,
and directing that otherwise the Motion to Withdraw the Reference
will stand denied without prejudice to a renewal based on further
developments in the adversary proceeding. 	A proposed order is
attached hereto as Attachment A.
I
THE RIGHT TO A JURY TRIAL WAS NOT WAIVED
Although the issue of whether the defendant waived its right
to a jury trial is subject to being determined de novo by the
District Court, the Bankruptcy Court concludes that the defendant
did not waive its right to a jury trial. 	The defendant timely
demanded a jury trial, and does not consent to the jury trial
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 2 of 10

3
being conducted in the Bankruptcy Court. 	Under 28 U.S.C.
§ 157(e):
If the right to a jury trial applies in a proceeding
that may be heard under this section by a bankruptcy
judge, the bankruptcy judge may conduct a jury trial if
specially designated to exercise such jurisdiction by
the district court and with the express consent of all
the parties.
The defendant accordingly moved for a withdrawal of the reference
based on its right to a jury trial. 	The plaintiff contends that
the defendant waived its right to a jury trial by failing to
request the District Court to withdraw the reference within the
time specified by DCt.LBR 5011-2(b).
The right to a jury trial did not evaporate when the
defendant declined to consent to a jury trial being conducted in
the Bankruptcy Court: it is implicit in § 157(e) that a refusal
to consent to a jury trial before a bankruptcy judge cannot
destroy the right to a jury trial. 	Under 28 U.S.C. § 157(d),
“[t]he district court may withdraw . . . [the]
proceeding . . . on its own motion,” and that would include
withdrawing the proceeding upon being notified by the Bankruptcy
Court that a jury trial has been demanded that the Bankruptcy
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 3 of 10

1 	The demand for a jury trial was not made until after the
deadline set by Rule 5011-2(b) had expired, and it would thus be
appropriate to enlarge the time for seeking a withdrawal of the
reference. 	But the point is that the reference will need to be
withdrawn, if it becomes ripe for a jury trial, regardless of
whether the District Court is prompted to address the issue of
withdrawal of the reference by a party’s motion, by the
recommendation of the Bankruptcy Court, or by the District
Court’s own initiative.
2 	In other words, the continued existence of the right to a
jury trial after the Rule 5011-2(b) deadline has passed does not
turn on whether the Bankruptcy Court is authorized to conduct the
jury trial under § 158(e). 	The continued existence of that right
to a jury trial could be destroyed neither by the District
Court’s declining to specially designate the Bankruptcy Court to
conduct the jury trial nor by the absence of consent of all
parties to the Bankruptcy Court’s conducting the jury trial. 	In
either event, the jury trial right would continue to exist and
the jury trial would have to be tried in the District Court.
4
Court is not authorized to conduct. 1 	In such a withdrawn
proceeding, the right to a jury trial would continue to exist: it
would not have disappeared based on the defendant’s having failed
to move for a withdrawal of the reference or having failed to
move for such within the time limit specified by DCt.LBR
5011-2(b) for filing such a motion. 2
II
THE REFERENCE OUGHT NOT BE
WITHDRAWN AS TO ANY COUNT OF THE
AMENDED COMPLAINT UNTIL THE
BANKRUPTCY COURT DISPOSES OF CERTAIN MOTIONS
Discovery has been completed. 	The parties have been given
until September 14, 2007, to file motions for summary judgment as
to Counts One, Two, and Five of the Amended Complaint. 	Because
those motions may dispose of those counts of the Amended
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 4 of 10

3 	I likely will rule that Count Five was properly referred
to the Bankruptcy Court.
5
Complaint, there is no need to withdraw the reference prior to
those motions being decided. 	A grant of summary judgment would
preclude a jury trial and thus moot the ground upon which
withdrawal of the reference was sought.
The defendant has additionally been given until September
14, 2007, to file a motion to determine that Counts Three, Four,
and Five of the Amended Complaint could not properly be referred
to the Bankruptcy Court based on this court’s decision in Premium
of America, LLC v. Sanchez (In re Premium Escrow Services, Inc.),
342 B.R. 390 (Bankr. D.D.C. 2006). 	The motion should be
susceptible of prompt disposition. 	It makes sense for the
District Court to withdraw any of those counts if the Bankruptcy
Court decides that the count could not be referred to it. 	But if
the Bankruptcy Court decides that one or more of those counts
could be referred to the Bankruptcy Court, it makes sense to
defer withdrawing that count (or counts) until the Bankruptcy
Court resolves all dispositive motions concerning those counts
properly referred to it.
Based on Premium Escrow, it is likely that I will determine
that Counts Three and Four could not be referred to the
Bankruptcy Court, thus necessitating a withdrawal of the
reference of those counts. 3 	Premium Escrow left open the
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 5 of 10

4 	The claims in Premium Escrow having been ones that could
not be referred to the Bankruptcy Court, the issue of whether the
District Court would have jurisdiction over the claims was not
one for the Bankruptcy Court to decide.
5 	Because of the substantial question of jurisdiction as to
Counts Three and Four, I did not set a deadline for motions for
summary judgment regarding Counts Three and Four. 	It would make
sense to dispose of the jurisdictional question first. 	As to
Count Five, however, it appears quite likely that I will find
that the count could be referred to the bankruptcy court and that
there is subject matter jurisdiction under § 1334.
6
question whether claims that could not be referred to a
bankruptcy court, like the ones addressed in Premium Escrow,
nevertheless could be heard by the District Court based solely on
the supplemental jurisdiction statute, 28 U.S.C. § 1367, in
conjunction with the bankruptcy jurisdiction statute, 28 U.S.C.
§ 1334. 4 	See In re Premium Escrow Services, Inc., 342 B.R. at
403-04. 	Accordingly, if I decide that Counts Three and Four
could not be referred to the Bankruptcy Court, I will promptly
alert the District Court so that Counts Three and Four may be
withdrawn in order to start addressing whether the District Court
itself could exercise jurisdiction over those counts, even if the
motions for summary judgment regarding other counts have not yet
been decided. 5
In the unlikely event that I determine that Counts Three and
Four could be referred to the Bankruptcy Court, then it would be
advisable not to withdraw the reference until motions for summary
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 6 of 10

7	O:\Judge Temp Docs\Alberts vs Geitz Builder Recommendation to District Court.wpd
judgment are filed and disposed of in the Bankruptcy Court.
[Signed and dated above.]
Copies to: All counsel of record; Office of United States
Trustee.
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 7 of 10

Attachment A
Proposed Order for Consideration of District Court
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 8 of 10

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREATER SOUTHEAST COMMUNITY
HOSPITAL CORP. , et al.,
Debtors.
____________________________
SAM J. ALBERTS, TRUSTEE FOR
THE DCHC LIQUIDATING TRUST,
Plaintiff,
v.
GARY GIETZ MASTER BUILDERS,
A.C.C.,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
[Case No. 02-02250
(Chapter 11)
in the Bankruptcy Court]
Misc. No. 05-00304-TFH
[Adversary Proceeding No.
04-10453
in the Bankruptcy Court]
ORDER REGARDING MOTION TO WITHDRAW THE REFERENCE
Upon consideration of the Motion to Withdraw the Reference
and its related papers, and the sua sponte recommendation of the
Bankruptcy Court, it is
ORDERED that this Court will enter an order withdrawing the
reference as to a count of the Amended Complaint if, as to that
count, notification is filed in this Miscellaneous matter that:
(1) the Bankruptcy Court has denied all timely filed
motions for summary judgment as to that count; or
(2) the Bankruptcy Court has granted a motion to
determine that the count could not be referred to the
Bankruptcy Court,
and if a proposed order for such withdrawal is submitted with the
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 9 of 10

notification. 	It is further
ORDERED that the Motion to Withdraw the Reference will
otherwise stand denied without prejudice to a renewal based on
further developments in the adversary proceeding.
SO ORDERED.
Dated: 	.
Thomas F. Hogan
Chief Judge
Copies to: Sam J. Alberts, Esq.; Mary Joanne Dowd, Esq.; Clerk,
Bankruptcy Court; Honorable S. Martin Teel, Jr.
Case 04-10453 Doc 66 Filed 08/16/07 Entered 08/16/07 15:19:52 Desc Main
Document Page 10 of 10