Preview
FILED: KINGS COUNTY CLERK 08/15/2016 05:42 PM INDEX NO. 510844/2016
NYSCEF DOC.Case
NO. 1:14-cv-06282-BMC
48 Document 13 Filed 11/13/14 Page 1 of 6 PageIDNYSCEF:
RECEIVED #: 437 08/15/2016
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------- X
:
CHERRY HILL GOURMET, INC., :
:
Plaintiff, :
: DECISION AND ORDER
- against - :
: 14 Civ. 6282 (BMC)
LUNDY’S MANAGEMENT CORP., :
Steve Pappas in his Individual and corporate :
capacity, “XYZ Corp #1” Through “XYZ Corp. :
#10” the last ten names being fictitious and :
unknown to Plaintiff, intended to be the persons
or parties, if any having contributed to the
violations,
Defendants.
----------------------------------------------------------- X
:
LUNDY’S MANAGEMENT CORP., :
:
Petitioner-Landlord, :
: 14 Civ. 6318 (BMC)
- against - :
:
CHERRY HILL GOURMET, INC., :
:
Respondent-Sub-Tenant. :
:
----------------------------------------------------------- X
:
LUNDY’S MANAGEMENT CORP., :
:
Petitioner-Landlord, :
: 14 Civ. 6572 (BMC)
- against - :
:
CHERRY HILL GOURMET, INC., :
:
Respondent-Sub-Tenant. :
:
Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 2 of 6 PageID #: 438
----------------------------------------------------------- X
:
LUNDY’S MANAGEMENT CORP., :
:
Petitioner-Landlord, :
: 14 Civ. 6573 (BMC)
- against - :
:
CHERRY HILL GOURMET, INC., :
and DAVID ISAEV, :
:
Respondent-Sub-Tenant. :
----------------------------------------------------------- X
:
LUNDY’S MANAGEMENT CORP., :
:
Petitioner-Landlord, :
: 14 Civ. 6574 (BMC)
- against - :
:
CHERRY HILL GOURMET, INC., :
and DAVID ISAEV, :
:
Respondent-Sub-Tenant. :
----------------------------------------------------------- X
:
LUNDY’S MANAGEMENT CORP., :
:
Petitioner-Landlord, :
: 14 Civ. 6575 (BMC)
- against - :
:
CHERRY HILL GOURMET, INC., :
and DAVID ISAEV, :
:
Respondent-Sub-Tenant. :
----------------------------------------------------------- X
COGAN, District Judge.
These six related cases are consolidated for the purpose of resolving the motions of
Lundy’s Management Corp. to remand the cases to state court.
2
Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 3 of 6 PageID #: 439
The cases arise out of a contract dispute and various landlord-tenant disputes between
Cherry Hill Gourmet, Inc. (“Cherry Hill”) and Lundy’s Management Corp. (“Lundy’s”),
pursuant to a sublease between the parties. Cherry Hill is the subtenant of retail space within
1901 Emmons Avenue, Brooklyn – a building leased by Lundy’s from Sheepshead Restaurant,
Inc. (“Overlandlord”). On May 8, 2014, Lundy’s filed a voluntary petition under Chapter 11 of
the Bankruptcy Code with the United States Bankruptcy Court for the Eastern District of New
York. Cherry Hill filed Notices of Removal in each of these cases pursuant to 28 U.S.C. §§
1334, 1452 and Federal Rule of Bankruptcy Procedure 9027, as matters arising in or related to
Lundy’s’ chapter 11 case.
When a claim or cause of action is removed as related to a bankruptcy case, 28 U.S.C. §
1452(b) provides that “[t]he court to which such claim or cause of action is removed may remand
such claim or cause of action on any equitable ground.” In determining whether to remand an
action on equitable grounds, courts consider a number of factors, including:
(1) the effect on the efficient administration of the bankruptcy estate; (2) the
extent to which issues of state law predominate; (3) the difficulty or unsettled
nature of the applicable state law; (4) comity; (5) the degree of relatedness or
remoteness of the proceeding to the main bankruptcy case; (6) the existence of the
right to a jury trial; and (7) prejudice to the involuntarily removed defendants.
Drexel Burnham Lambert Grp., Inc. v. Vigilant Ins. Co., 130 B.R. 405, 407 (Bankr. S.D.N.Y.
1991); see also In re 183 Lorraine St. Assocs., 198 B.R. 16, 32 (Bankr. E.D.N.Y. 1996).
Virtually all of the factors weigh in favor of remanding the cases. First, efficient
administration of the bankruptcy estate is best served by remand. The actions are close to final
dispositions and/or have trial dates scheduled in the near future. In addition, the state courts are
intimately familiar with the facts and issues involved in these cases. Transferring these matters
to the bankruptcy court would essentially require these proceedings to be re-litigated, generating
tremendous waste, and likely hindering the efficient administration of Lundy’s’ Chapter 11 case.
3
Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 4 of 6 PageID #: 440
Cherry Hill argues that the Related Actions can be handled just as efficiently by the bankruptcy
court and that Lundy’s has not complied with the terms of the settlement in one of the cases.
Neither of these arguments is persuasive considering that the state courts are already well-
acquainted with the cases. 1
All parties also concede that state law issues predominate in all of these cases, and that
the state law issues are neither difficult nor complex. The Related Actions involve either state
contract law issues or state real property laws governing summary eviction proceedings. None
of the Related Actions implicates federal law. Cherry Hill maintains that because these state law
actions are generic, the bankruptcy court can easily resolve these issues. Even if Cherry Hill is
correct, the interest in judicial efficiency and economy is best served by remand, and these
principles would be undercut by transferring the Removed Actions for the reasons described
above. Moreover, the fact that the state law issues are not complex does not require me to deny
the motions for remand. See In re Montague Pipeline Techs. Corp., 209 B.R. 295, 301 (Bankr.
E.D.N.Y. 1997) (explaining that lack of complexity in state law claims does not necessitate
remand).
Comity, the fourth factor, also favors remand. The state courts have been intimately
involved in these actions and have an interest in retaining these cases, as Cherry Hill concedes.
Cherry Hill’s argument that any issues of comity “are minimal and are outweighed by the other
factors” is incorrect. It is an unnecessary insult to oust state courts of jurisdiction on purely state
law issues on the eve of trial in matters in which they have expended substantial resources
without a good federal justification for doing so. There is no such justification here.
1
Cherry Hill’s contention that there is a viable dispute concerning the stipulation of settlement in one of these
matters, and that it planned on seeking the bankruptcy court’s approval of that stipulation in the event of transfer, is
immaterial. There is nothing preventing Cherry Hill from seeking the bankruptcy court’s approval of the stipulation
whether or not the cases are transferred to that court.
4
Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 5 of 6 PageID #: 441
The fifth factor also weighs in favor of remand, as these state actions are “non-core”
proceedings that do not implicate any bankruptcy law or rules. See 28 U.S.C. § 157. Although
the parties do not spend much time on the core/non-core distinction, the actions are non-core
proceedings. Generally, a “core proceeding” is one that would have no existence outside of the
bankruptcy case. See In re Burger Boys Inc., 183 B.R. 682, 685 (Bankr. S.D.N.Y. 1994).
Having been commenced and litigated for months in state courts, the cases do not need the
bankruptcy case to proceed. Cherry Hill asserts that the claims and issues involved in the actions
are “inextricably intertwined” with Lundy’s efforts to reorganize under the Bankruptcy Code.
However, Cherry Hill was on notice of any dispute between Lundy’s and the Overlandlord since
at least June 14, 2014, a time months after the commencement of any of the cases. Cherry Hill
offers no reason for its delay in removing the “inextricably intertwined” cases and seeking their
transfer to the bankruptcy court. Furthermore, nothing prevents Cherry Hill from participating in
Lundy’s Chapter 11 case if it has an interest therein.
Finally, the sixth and seventh equitable factors also point to remand. Lundy’s would
suffer significant prejudice if they are not remanded. The cases have either been litigated in state
court for a number of years, or are on the eve of trial. All of the cases were commenced prior to
Lundy’s’ Chapter 11 filing, yet Cherry Hill waited over five months to remove these actions.
This smacks of bad faith.
5
Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 6 of 6 PageID #: 442
Accordingly, the Motions for Remand [8, 5, 7, 6, 7, and 6] are granted. The Clerk of the
Court is directed to remand these cases to the state courts from which they were removed.
SO ORDERED.
Digitally signed by Brian M. Cogan
U.S.D.J.
Dated: Brooklyn, New York
November 13, 2014
6
Preview
FILED: KINGS COUNTY CLERK 08/15/2016 05:42 PM INDEX NO. 510844/2016 NYSCEF DOC.Case NO. 1:14-cv-06282-BMC 48 Document 13 Filed 11/13/14 Page 1 of 6 PageIDNYSCEF: RECEIVED #: 437 08/15/2016 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ----------------------------------------------------------- X : CHERRY HILL GOURMET, INC., : : Plaintiff, : : DECISION AND ORDER - against - : : 14 Civ. 6282 (BMC) LUNDY’S MANAGEMENT CORP., : Steve Pappas in his Individual and corporate : capacity, “XYZ Corp #1” Through “XYZ Corp. : #10” the last ten names being fictitious and : unknown to Plaintiff, intended to be the persons or parties, if any having contributed to the violations, Defendants. ----------------------------------------------------------- X : LUNDY’S MANAGEMENT CORP., : : Petitioner-Landlord, : : 14 Civ. 6318 (BMC) - against - : : CHERRY HILL GOURMET, INC., : : Respondent-Sub-Tenant. : : ----------------------------------------------------------- X : LUNDY’S MANAGEMENT CORP., : : Petitioner-Landlord, : : 14 Civ. 6572 (BMC) - against - : : CHERRY HILL GOURMET, INC., : : Respondent-Sub-Tenant. : : Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 2 of 6 PageID #: 438 ----------------------------------------------------------- X : LUNDY’S MANAGEMENT CORP., : : Petitioner-Landlord, : : 14 Civ. 6573 (BMC) - against - : : CHERRY HILL GOURMET, INC., : and DAVID ISAEV, : : Respondent-Sub-Tenant. : ----------------------------------------------------------- X : LUNDY’S MANAGEMENT CORP., : : Petitioner-Landlord, : : 14 Civ. 6574 (BMC) - against - : : CHERRY HILL GOURMET, INC., : and DAVID ISAEV, : : Respondent-Sub-Tenant. : ----------------------------------------------------------- X : LUNDY’S MANAGEMENT CORP., : : Petitioner-Landlord, : : 14 Civ. 6575 (BMC) - against - : : CHERRY HILL GOURMET, INC., : and DAVID ISAEV, : : Respondent-Sub-Tenant. : ----------------------------------------------------------- X COGAN, District Judge. These six related cases are consolidated for the purpose of resolving the motions of Lundy’s Management Corp. to remand the cases to state court. 2 Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 3 of 6 PageID #: 439 The cases arise out of a contract dispute and various landlord-tenant disputes between Cherry Hill Gourmet, Inc. (“Cherry Hill”) and Lundy’s Management Corp. (“Lundy’s”), pursuant to a sublease between the parties. Cherry Hill is the subtenant of retail space within 1901 Emmons Avenue, Brooklyn – a building leased by Lundy’s from Sheepshead Restaurant, Inc. (“Overlandlord”). On May 8, 2014, Lundy’s filed a voluntary petition under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court for the Eastern District of New York. Cherry Hill filed Notices of Removal in each of these cases pursuant to 28 U.S.C. §§ 1334, 1452 and Federal Rule of Bankruptcy Procedure 9027, as matters arising in or related to Lundy’s’ chapter 11 case. When a claim or cause of action is removed as related to a bankruptcy case, 28 U.S.C. § 1452(b) provides that “[t]he court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground.” In determining whether to remand an action on equitable grounds, courts consider a number of factors, including: (1) the effect on the efficient administration of the bankruptcy estate; (2) the extent to which issues of state law predominate; (3) the difficulty or unsettled nature of the applicable state law; (4) comity; (5) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case; (6) the existence of the right to a jury trial; and (7) prejudice to the involuntarily removed defendants. Drexel Burnham Lambert Grp., Inc. v. Vigilant Ins. Co., 130 B.R. 405, 407 (Bankr. S.D.N.Y. 1991); see also In re 183 Lorraine St. Assocs., 198 B.R. 16, 32 (Bankr. E.D.N.Y. 1996). Virtually all of the factors weigh in favor of remanding the cases. First, efficient administration of the bankruptcy estate is best served by remand. The actions are close to final dispositions and/or have trial dates scheduled in the near future. In addition, the state courts are intimately familiar with the facts and issues involved in these cases. Transferring these matters to the bankruptcy court would essentially require these proceedings to be re-litigated, generating tremendous waste, and likely hindering the efficient administration of Lundy’s’ Chapter 11 case. 3 Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 4 of 6 PageID #: 440 Cherry Hill argues that the Related Actions can be handled just as efficiently by the bankruptcy court and that Lundy’s has not complied with the terms of the settlement in one of the cases. Neither of these arguments is persuasive considering that the state courts are already well- acquainted with the cases. 1 All parties also concede that state law issues predominate in all of these cases, and that the state law issues are neither difficult nor complex. The Related Actions involve either state contract law issues or state real property laws governing summary eviction proceedings. None of the Related Actions implicates federal law. Cherry Hill maintains that because these state law actions are generic, the bankruptcy court can easily resolve these issues. Even if Cherry Hill is correct, the interest in judicial efficiency and economy is best served by remand, and these principles would be undercut by transferring the Removed Actions for the reasons described above. Moreover, the fact that the state law issues are not complex does not require me to deny the motions for remand. See In re Montague Pipeline Techs. Corp., 209 B.R. 295, 301 (Bankr. E.D.N.Y. 1997) (explaining that lack of complexity in state law claims does not necessitate remand). Comity, the fourth factor, also favors remand. The state courts have been intimately involved in these actions and have an interest in retaining these cases, as Cherry Hill concedes. Cherry Hill’s argument that any issues of comity “are minimal and are outweighed by the other factors” is incorrect. It is an unnecessary insult to oust state courts of jurisdiction on purely state law issues on the eve of trial in matters in which they have expended substantial resources without a good federal justification for doing so. There is no such justification here. 1 Cherry Hill’s contention that there is a viable dispute concerning the stipulation of settlement in one of these matters, and that it planned on seeking the bankruptcy court’s approval of that stipulation in the event of transfer, is immaterial. There is nothing preventing Cherry Hill from seeking the bankruptcy court’s approval of the stipulation whether or not the cases are transferred to that court. 4 Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 5 of 6 PageID #: 441 The fifth factor also weighs in favor of remand, as these state actions are “non-core” proceedings that do not implicate any bankruptcy law or rules. See 28 U.S.C. § 157. Although the parties do not spend much time on the core/non-core distinction, the actions are non-core proceedings. Generally, a “core proceeding” is one that would have no existence outside of the bankruptcy case. See In re Burger Boys Inc., 183 B.R. 682, 685 (Bankr. S.D.N.Y. 1994). Having been commenced and litigated for months in state courts, the cases do not need the bankruptcy case to proceed. Cherry Hill asserts that the claims and issues involved in the actions are “inextricably intertwined” with Lundy’s efforts to reorganize under the Bankruptcy Code. However, Cherry Hill was on notice of any dispute between Lundy’s and the Overlandlord since at least June 14, 2014, a time months after the commencement of any of the cases. Cherry Hill offers no reason for its delay in removing the “inextricably intertwined” cases and seeking their transfer to the bankruptcy court. Furthermore, nothing prevents Cherry Hill from participating in Lundy’s Chapter 11 case if it has an interest therein. Finally, the sixth and seventh equitable factors also point to remand. Lundy’s would suffer significant prejudice if they are not remanded. The cases have either been litigated in state court for a number of years, or are on the eve of trial. All of the cases were commenced prior to Lundy’s’ Chapter 11 filing, yet Cherry Hill waited over five months to remove these actions. This smacks of bad faith. 5 Case 1:14-cv-06282-BMC Document 13 Filed 11/13/14 Page 6 of 6 PageID #: 442 Accordingly, the Motions for Remand [8, 5, 7, 6, 7, and 6] are granted. The Clerk of the Court is directed to remand these cases to the state courts from which they were removed. SO ORDERED. Digitally signed by Brian M. Cogan U.S.D.J. Dated: Brooklyn, New York November 13, 2014 6