Case No. 02-38913-BJH-7United States Bankruptcy Court, N.D. Texas, Dallas Division.
May 8, 2003
REPORT AND RECOMMENDATION TO DISTRICT COURT
BARBARA J. HOUSER, United States Bankruptcy Judge
On October 7, 2002, Linda Fay Jenkins (the “Debtor”) filed a voluntary petition for relief under Chapter 7. On that date, an action was pending against her in the United States District Court for the Northern District of Texas, entitled Donald E. Armstrong v. Linda Jenkins, Case No. 3-01CV2611-M (the “District Court Action”).
On November 26, 2002, Donald E. Armstrong (“Armstrong”) filed, pro se,
a motion for relief from the automatic stay (the “Stay Motion”) in order to pursue the District Court Action. The Debtor filed her response in opposition on December 5, 2002. On December 11, 2002, Armstrong filed, pro se, a “Reply Memorandum in Support of Creditor’s Motion for Relief from the Automatic Stay to Pursue Northern District of Texas Case 3-01CV2611-N to Pursue Nondischargeability, to Appear by Telephone and for Application to Withdraw Reference” (the “Withdrawal Motion”). In the Withdrawal Motion, Armstrong requested that the United States District Court withdraw the reference “and allow the Creditor to file the Creditor’s nondischargeability complaint as an amended complaint” in the District Court Action.
On December 17, 2002, this Court held a status conference on the Stay Motion, at which Armstrong and Debtor’s counsel appeared. The Court believed that it was premature for it to rule on the Stay Motion until Armstrong filed a nondischargeability complaint. As a result, the hearing on the Stay Motion was continued.
On December 18, 2002, the Clerk of the Bankruptcy Court transmitted the Withdrawal Motion to the United States District Court for the Northern District of Texas. Pursuant to N.D. Tx L.B.R. 5011.1, this Court held a status conference on the Withdrawal Motion on January 9, 2003, at which Armstrong and Debtor’s counsel appeared.
On January 10, 2003, this Court filed its Report and Recommendation, recommending that the Withdrawal Motion be denied as premature. On January 13, 2003, Armstrong filed a dischargeability complaint against the Debtor, Adv. Pro. No. 03-3138-BJH, and on January 14, 2003, Armstrong filed an Amended Motion to Withdraw Reference. On January 21, 2003, United States District Judge Sidney Fitzwater entered an Order referring to this Court, for Report and Recommendation, the Amended Motion to Withdraw Reference.
Pursuant to N.D. Tx L.B.R. 5011.1, this Court held a status conference on the Amended Motion to Withdraw Reference on February 20, 2003, at which Armstrong, the Debtor, and Debtor’s counsel appeared. At the status conference, the parties reached the following agreement: (i) the nondischargeability claims raised in Adv. Pro. No. 03-3138-BJH will proceed to a bench trial before this Court; (ii) the District Court Action will be referred to this Court for a bifurcated jury trial of the liability issues raised in that action; and (iii) damages issues in the District Court Action will be abated pending a determination of the Debtor’s liability on and/or the dischargeability of the claims, with each party reserving its right to assert that the damages issues should be tried, if necessary, either before this Court or in the District Court, to a jury or to the bench.
At the conclusion of the status conference, the Court directed the parties to submit a proposed agreed scheduling order. Although a draft scheduling order was submitted, no agreement as to all terms was reached. Since the parties had failed to agree to a form of order, the Court drafted its own form of scheduling order, provided such order to the parties for comment, and held a further telephonic status conference on April 24, 2003. At the status conference, the parties agreed to the Court’s scheduling order, a copy of which is attached. In light of the parties’ agreement, Armstrong has filed with this Court a notice of his withdrawal of the Amended Motion to Withdraw Reference.
The Court believes that the parties’ agreement will further judicial economy by avoiding duplicative actions here and in the United States District Court. Accordingly this Court recommends that (i) the Amended Motion to Withdraw Reference be denied as moot and (ii) the District Court Action be referred to this Court pursuant to the parties’ agreement, for a consolidated trial of the liability issues in the District Court Action with the trial of the nondischargeability issues in Adv. Pro. No. 03-3138-BJH, with each party reserving its rights with respect to a trial of the damages issues in the District Court Action, if the Debtor is found to be liable to Armstrong and such liability is found to be nondischargeable in the Debtor’s bankruptcy case.