Angell, Trustee v. Babb

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
IN RE:
MALCOLM MCFALL BABB,
Debtors. 	Case No. 06-03003-8-JRL
JAMES B. ANGELL, Chapter 7
Trustee, 	Adversary Proceeding No.:
Plaintiff, 	L-07-00056-8-AP
v.
MALCOLM MCFALL BABB,
Defendant.
______________________________________________________________________________
ORDER
On July 18, 2007 the court conducted a pretrial scheduling conference in Wilmington,
North Carolina. Based upon the information obtained from that conference the court entered an
order dated July 26, 2007. The Pretrial Scheduling Order struck the pro se debtor’s demand for
a trial by jury. Subsequently, the debtor filed a motion requesting the court alter or amend the
Pretrial Scheduling Order as it pertained to his demand for a jury trial.
On September 22, 2006, the debtor filed a petition for relief under chapter 13 of the
SO ORDERED.
SIGNED this 04 day of September, 2007.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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Bankruptcy Code. The court later converted the debtor’s chapter 13 case to a case under chapter
7. On May 25, 2007, the chapter 7 trustee instituted an adversary proceeding against the debtor
seeking denial of the debtor’s discharge pursuant to 11 U.S.C. § 727(a). The allegations set forth
by the trustee pertain to real estate owned or allegedly owned by the debtor. The trustee asserts
that the debtor failed to disclose the debtor’s ownership of certain real estate properties on his
bankruptcy schedules. As to the properties the debtor did list on his schedules, the trustee
contends that the debtor grossly underestimated the value of those properties. In his motion to
amend, the debtor contends that the ownership of the real property is a matter law and should be
decided by a jury.
“The Seventh Amendment protects a litigants’s right to a jury trial only if a cause of
action is legal in nature and it involves a matter of ‘private right.’” Granfinanciera, S.A. v.
Nordberg, 492 U.S. 33, 42 n.4 (1989). The standard test is: Whether the action would have been
classified as legal or equitable in the eighteenth century England, and whether the remedy sought
is legal or equitable in nature. Id. at 42. “[A] bankruptcy discharge and questions concerning the
dischargeability of certain debts, involves issues with an equitable history and for which there
was no entitlement to a jury trial in the courts of England prior to the merger of law and equity.”
In re Hooper, 112 B.R. 1009, 1012 (B.A.P 9th Cir. 1990). The remedy or ultimate relief sought
by the trustee is that the debtor is not entitled to a discharge under the Bankruptcy Code, and this
type of remedy is equitable in nature. Id. at 1012.
In this case, the trustee is seeking denial of the debtor’s discharge, and under the test set
forth in Granfinanciera, the debtor is not entitled to a jury trial on the issue of his discharge. The
denial of the debtor’s discharge is the only relief sought in the trustee’s complaint, and therefore
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the debtor’s motion to amend the Pretrial Scheduling Order is DENIED.
“END OF DOCUMENT”
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