Labgold v. Healey

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
WILLIAM J. HEALEY,
Debtor.
___________________________
MARC R. LABGOLD,
Plaintiff,
v.
WILLIAM J. HEALEY,
Defendant.
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Case No. 04-01343
(Chapter 7)
Adversary Proceeding No.
05-10078
DECISION RE DISMISSING ADVERSARY PROCEEDING
The court has dismissed, pursuant to the United States
Trustee’s motion seeking dismissal under 11 U.S.C. § 707(b),
the bankruptcy case in which this adversary proceeding was
filed. On mootness grounds, the court will dismiss this
adversary proceeding as well.
The decision below is hereby signed. Dated: March
5, 2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 A request for entry of default is pending based on
Healey’s failure to plead or otherwise defend.
2
The complaint in this adversary proceeding sought to
declare nondischargeable (that is, unaffected by any discharge
that might have been issued in the bankruptcy case had it
remained pending) the debts owed by the defendant Healey to
the plaintiff Labgold, and objected to granting Healey a
discharge (that is, the discharge to which Healey would have
been entitled, absent Labgold’s timely objection, had this
case remained pending).1
Both types of relief sought, although they were core
matters under 28 U.S.C. § 157(b)(2)(I) and (J), are now moot.
Because no case is pending, no discharge will issue.
Accordingly, the dischargeability of the debts owed by Healey
to the plaintiff Labgold, had a discharge issued, is an
academic issue. Similarly, there is no occasion to deny the
granting of a discharge. The court can grant a discharge
under 11 U.S.C. § 727(a) only in a pending bankruptcy case,
and with the bankruptcy case having been dismissed, no purpose
is served by Labgold’s objection under 11 U.S.C. § 727(c)(1)
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2 Because the United States Trustee’s motion to dismiss
was pending under F.R. Bankr. P. 1017(e), there was no
possibility of a discharge being granted by the clerk until
that motion was adjudicated. F.R. Bankr. P. 4004(c). Once
the case was dismissed, there was no case pending in which to
grant a discharge.
3
to the court’s granting a discharge.2 Theoretically the same
claims could arise in some future bankruptcy case filed by
Healey, but by then Healey’s debt to Labgold may be fully
paid, thus precluding Labgold from pursuing the types of
relief he seeks in this adversary proceeding in the future
bankruptcy case. Labgold’s requests for relief in this case
are thus moot.
Mootness deprives the court of subject matter
jurisdiction. Muhammad v. City of N.Y. Dep't of Corr., 126
F.3d 119, 122 (2d Cir. 1997). “[A] case is moot when it no
longer presents a live controversy with respect to which the
court can give meaningful relief.” Fla. Ass'n of Rehab.
Facilities, Inc. v. Fla. Dep't of Health & Rehab. Servs., 225
F.3d 1208, 1217 (11th Cir. 2000) (citation omitted). “When
events subsequent to the commencement of a lawsuit create a
situation in which the court can no longer give the plaintiff
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3 This case does not fall within the exception to the
mootness doctrine for circumstances which are “capable of
repetition, yet evading review.” In any future bankruptcy
case, Labgold will still have the opportunity to seek
determinations of nondischargeability and to object to the
debtor’s obtaining a discharge. Although Healey might obtain
dismissal of such a future case before such issues are tried,
the issues are relevant only if Healey obtains a discharge but
for Labgold objecting. Necessarily any issues Labgold presses
in such a future case would be tried if Healey were ever to
obtain a discharge in that future case.
4
meaningful relief, the case is moot and must be dismissed.”
Id.3
Mootness is an exception to the general rule that subject
matter jurisdiction is determined as of the date of the filing
of the complaint. See Kitty Hawk Aircargo, Inc. v. Chao, 418
F.3d 453, 460 (5th Cir. 2005). Mootness thus distinguishes
this case from those in which courts have held that the
court’s jurisdiction was determined based on whether
jurisdiction existed when the adversary proceeding complaint
was filed, and have held that dismissal of the bankruptcy case
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4 See Chapman v. Currie Motors, Inc., 65 F.3d 78, 80-82
(7th Cir. 1995); In re Porges, 44 F.3d 159, 162-63 (2d Cir.
1995); In re Querner, 7 F.3d 1199, 1201-02 (5th Cir. 1993); In
re Carraher, 971 F.2d 327, 328 (9th Cir. 1992) (per curiam);
In re Morris, 950 F.2d 1531, 1534 (11th Cir. 1992); In re
Smith, 866 F.2d 576, 580 (3d Cir. 1989); Williams v.
Citifinancial Mortg. Co. (In re Williams), 256 B.R. 885, 892
(8th Cir. BAP 2001) (holding that jurisdiction continues, and
suggesting that it is more likely to be an abuse of discretion
to dismiss a core matter than to dismiss a non-core matter
over which the bankruptcy court had only “related to”
jurisdiction).
5	O:\JUDGTEMP\Labgold vs Healey Decsn re Dismssl.wpdJuly 8, 2003 (12:57pm)
did not destroy jurisdiction over the adversary proceeding.4
Each of those cases involved a matter which, despite the
dismissal of the main bankruptcy case, was still a live
controversy (for example, imposing sanctions for misconduct in
the bankruptcy case), not some speculative possibility that
the same issue might arise in a future bankruptcy case even
though the issue was a dead issue in the dismissed bankruptcy
case.
An order follows dismissing this adversary proceeding
without prejudice to reinstatement should the dismissal of the
main case be vacated, and without adjudicating the claims
asserted in the complaint.
[Signed and dated above.]
Copies to: Copies to: All counsel of record; debtor; Office of
U.S. Trustee.
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