JEFFERY A. DELLER, Bankruptcy Judge.
The matters before the Court are dueling motions for summary judgment. One Motion for Summary Judgment is jointly filed by the Plaintiff, ARDI Limited Partnership ("ARDI"), and the Debtor/Third Party Defendant, River Entertainment Co. ("River Entertainment"). Pursuant to their Motion for Summary Judgment, the movants seek the entry of an order granting ARDI's complaint for conversion of certain assets. Defendant/Third Party Plaintiff The Buncher Company ("Buncher") has also filed a Motion for Summary Judgment. Pursuant to its motion, Buncher seeks dismissal of that complaint against it. At the center of these motions is a dispute regarding the enforcement of a prior consent order entered by this Court, that will resolve the issue of the ownership and alleged conversion of a certain barge facility moored along the Allegheny River in Pittsburgh, Pennsylvania. For the reasons expressed below, the Motion for Summary Judgment filed by Buncher shall be granted and the Motion for Summary Judgment jointly filed by ARDI and River Entertainment shall be denied.
The Debtor in this case, River Entertainment, operated an entertainment complex commonly known as "The Boardwalk" which included a nightclub and restaurant on a barge facility for approximately seventeen years. The Boardwalk was operated in two buildings which, along with other "Improvements", sat atop four separate barges that were structurally bound together (the "Barge Facility"). The Barge Facility was moored in the Allegheny River in Pittsburgh, Pennsylvania and was connected to the land by several bridges and utility lines. Buncher owned the adjacent land that allowed access to the Barge Facility. Buncher also held various permits issued by the Department of Environmental Protection that allowed for the mooring of the Barge Facility in the Allegheny River.
Buncher and River Entertainment entered into a Facility Lease Agreement that provided for the lease of the Barge Facility
Pursuant to the Facility Lease Agreement, ownership of the Barge Facility vested in ARDI during the term of the lease. (See Doc. # 35, Buncher's Motion for Summary Judgment, Exhibit "1", ¶ 16.2). If an event of default occurred and was continuing at the end of the lease term, ownership of the Barge Facility then would vest in Buncher without further action. (Id.) If there was no default at the conclusion of the lease term, title to the Barge Facility would remain in the name of ARDI. (Id. at ¶ 16.3.) At that point, ARDI was then, at its sole expense, required to remove the Barge Facility within sixty (60) days following the lease expiration. (Id.) If the Barge Facility remained after that sixty day period, it was deemed to be abandoned and would become the property of Buncher. (Id.)
On July 16, 2007, the Debtor filed a voluntary Chapter 11 case. On April 3, 2008, a hearing was held on its Disclosure Statement and Plan.
(See Doc. #38, Plaintiff's Motion for Summary Judgment, Ex. A.). The Consent Order also provided that this Court would retain jurisdiction to enforce the Consent Order or resolve any dispute under the Consent Order. (Id.)
Pursuant to the Consent Order, ARDI was required to notify Buncher within sixty days, or on or before June 3, 2008, whether or not it had found a buyer for the Barge Facility. If there was no proposed buyer, ARDI was required to completely remove the Barge Facility on or before July 3, 2008. Alternatively, ARDI could do nothing and relinquish any claim or interest in the Barge Facility, which would be effective June 3, 2008.
On May 30, 2008, counsel for ARDI sent notice to Buncher that there was no proposed buyer for the Barge Facility and that ARDI intended to proceed with removing it. Specifically, counsel stated that the Debtor "will, at its sole cost and expense,
After notice was provided that the Barge Facility would be "fully and completely removed", ARDI proceeded to remove only the bridges and utility lines that provided land access and utility service to the Barge Facility. In its complaint filed in state court and in its Motion for Summary Judgment, ARDI alleges that it removed the bridges on August 6, 2008. (See Doc. #38, ¶ 11). However, Buncher asserts that this is in error and that the bridge removal occurred on July 6, 2008. ARDI admitted to the July 6, 2008 date when it was asserted by Buncher in its Statement of Undisputed Facts (see Doc. # 37, Statement of Undisputed Facts, ¶ 15; Doc. # 47, Response To Statement of Undisputed Facts, ¶ 15). In either event, the record demonstrates that the bridge removal occurred after the July 3, 2008 deadline for full and complete removal.
On July 7, 2008, Buncher sent a letter to counsel for ARDI stating that ARDI had failed to comply with the Consent Order because ARDI had not removed the Barge Facility. Further, the letter notified ARDI that any rights ARDI may have possessed in the Barge Facility were forfeited due to ARDI's failure to timely remove the Barge Facility. On July 9, 2008, Buncher again wrote to counsel for ARDI reiterating its position that it had not complied with the Consent Order and that ARDI had forfeited any rights in the
A final letter was sent by Buncher to counsel for ARDI dated July 24, 2008 again advising of Buncher's position that ARDI had failed to comply with the Consent Order, thereby entitling Buncher to dismantle and remove the Barge Facility. The letter also advised that Buncher would begin the demolition process on July 28, 2008 and if there was any objection by ARDI, it should file a motion with the bankruptcy court.
ARDI did not respond to the July 24, 2008 letter. Nor did it file an objection to the demolition with this Court. Buncher subsequently proceeded to have the Barge Facility dismantled and fully removed. No action was taken by ARDI upon receiving notice prior to, during or after removal of the Barge Facility by Buncher.
Subject to a retention of jurisdiction over any dispute relating to the Consent Order, the bankruptcy case was ultimately dismissed on June 3, 2008. (See Case No. 07-24515JAD, Doc. # 60, Notice to Creditors and Other Parties in Interest). On August 2, 2010, approximately two years later, a complaint was filed by ARDI against Buncher in the Court of Common Pleas of Allegheny County alleging conversion of the Barge Facility and seeking punitive damages. The complaint was removed to this Court by Buncher on September 9, 2010 and the bankruptcy case was reopened.
The parties have each filed motions for summary judgment and supporting briefs. The motions have been orally argued and the matter is now ripe for adjudication.
Motions for summary judgment in adversary proceedings are governed by Fed. R. Bankr.P. 7056 which makes Fed. R.Civ.P. 56 applicable in the instant adversary proceeding. The rule provides, in relevant part, that summary judgment should be rendered "if movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(a). In considering a motion for summary judgment, the Court may rely upon the contents of the pleadings, the discovery and disclosure materials on file, and any affidavits. See Fed.R.Civ.P. 56(c). A dispute of material fact is "genuine" if a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Upon the moving party meeting its burden, the burden shifts to the non-moving party who must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
While ARDI characterizes the instant proceeding as the adjudication of its state law action for conversion, both summary judgment motions before the Court hinge entirely on the enforcement of the Consent Order. Indeed, the parties agree that the Consent Order dictates their respective rights and interests in the Barge Facility.
In Pennsylvania, conversion "is the deprivation of another's right of property in, or use or possession of a chattel, or other interference therewith without the owners consent and without lawful justification."
The Consent Order required ARDI to either: 1) "execute an agreement with a buyer or user" of the Barge Facility on or before June 3, 2008; or 2) "completely remove" the Barge Facility on or before July 3, 2008. If ARDI accomplished neither of these acts, the Consent Order was clear that ARDI would be "deemed to have abandoned" all rights and interest in the Barge Facility to Buncher effective June 3, 2008.
ARDI urges this Court to read the Consent Order to mean that because ARDI gave notice prior to June 3, 2008 that it intended to remove the Barge Facility, ARDI had not abandoned its interest in the Barge Facility. ARDI also alleges that by removing the bridges and utility lines which connected the Barge Facility to the land, it rendered the Barge Facility a "vessel" under "federal law and regulations" and thus the Barge was "completely remove[d]" as required by the Consent Order. This Court finds both of ARDI's interpretations of the Consent Order to be without merit.
The Court does not find ARDI's reading of the Consent Order, that it could prevent abandonment by merely notifying Buncher of its intent to remove the Barge Facility, to be accurate or persuasive. ARDI's interpretation ignores the language denoted by the asterisk at what would otherwise be the conclusion of the sentence in paragraph (3)(A). This additional language states that only upon "such removal", will Buncher relinquish its claim or interest in the Barge Facility. "Such removal" refers back to the earlier part of the sentence in (3)(A) requiring ARDI to "fully and completely" remove the Barge Facility by July 3, 2008. Thus under the plain language in the Consent Order, ARDI's mere notice of its intent to move the Barge Facility did not prevent abandonment of any interest it had in the Barge Facility to Buncher.
ARDI's suggestion that removal of the bridges and utility lines constituted "full and complete removal" of the Barge Facility is also contrary to the plain language of the Consent Order. The language of the Consent Order clearly provides that removal of the Barge Facility would be nothing less than removing "the Barge facility
Not only does the language of the Order itself bely the argument set forth by ARDI, but ARDI's own action—and inaction—contradict its argument. At the hearing held on April 3, 2008, counsel for ARDI stated "If they'll [Buncher] let it go, I think if we had a reasonable period of time,
See id., Ex. A, pp. 32-33.
Counsel for ARDI did not object, clarify, modify or in any way dispute the agreement as stated on the record. For these reasons, the Court finds ARDI's alleged interpretation of the Consent Order to be without merit.
Having failed to timely remove the Barge Facility pursuant to the Consent Order, ARDI did not have any right to possession of it. Without a right to possession of the Barge Facility, ARDI is precluded from successfully asserting an action for conversion, as there could be no interference with that right by Buncher. See Serafini v. Mariani, No. 3: CV-08-0469, 2010 WL 1342926, *7 (M.D.Pa., Mar. 31, 2010) ("[W]here, as here, a party has not retained an ownership interest in the property delivered to another, it may not maintain an action for conversion of that property.")
In the alternative, there is no genuine dispute of material fact that ARDI's conversion action is barred by the statute of limitations. Conversion actions in Pennsylvania are subject to a two year statute of limitations as set forth in 42 Pa.C.S.A. § 5524(7). See Shonberger v. Oswell, 365 Pa.Super. 481, 530 A.2d 112, 114 (1987) ("Conversion is an action at law and is, therefore, subject to the two-year statute of limitations.") The statute of limitations begins to accrue when the "`the first significant event necessary to make the claim suable' occurs." Lake v. Arnold, 232 F.3d 360, 366 (3d Cir.2000) (citations omitted). There is no genuine dispute that ARDI's complaint was filed on August 2, 2010, which is two years after Buncher commenced demolition of the Barge Facility on July 28, 2008.
While ARDI asserts that the two year period began to run on August 6, 2008, ARDI has not pointed to anything that would contravene the July 24, 2008 letter
Accordingly, Buncher's request for dismissal of the conversion complaint must be granted, and ARDI's Motion for Summary Judgment will be denied.
In a supplemental brief, ARDI relies on the recent Supreme Court decision in Stern v. Marshall, ___ U.S. ___, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), in attempting to argue that this Court lacks the ability to enter a final judgment both on its claim and Buncher's counterclaims. This Court cannot accept ARDI's assertion for two reasons. First, Stern does not apply in the instant matter as resolution of the current proceeding is entirely dependent on this Court's interpretation and enforcement of its own Consent Order, and is
ARDI contends that this Court does not have authority to hear the competing claims or enter final judgment because "the pending actions are state common law claims, do not stem from the bankruptcy proceeding and will not be resolved by resolution of the claim filed by Buncher against the Debtor...." (Doc. # 52, pp. 3-4). ARDI incorrectly alleges that its common law claim does not "stem" from the bankruptcy proceeding.
In Stern, the Supreme Court held that bankruptcy courts lack the constitutional authority to enter a final judgment on a state law tort counterclaim, when the adjudication of that counterclaim would not "necessarily be resolved in the claims allowance process." Stern, 131 S.Ct. at 2618. In its analysis, the Supreme Court explained that the constitutional issue arose because of the separation of powers principles implicated in Article III of the United States Constitution, and the nature of the "core" counterclaim asserted in Stern.
Under Article III, the "judicial power of the United States" must vest
Thus, the question decided in Stern was "a `narrow' one", as the Supreme Court held that Congress had only exceeded its authority in "one isolated respect", i.e. providing bankruptcy courts with the ability to finally adjudicate state law tort counterclaims to a proof of claim, absent consent of the parties. Id. at 2620. In fact, the Supreme Court's entire public rights analysis in Stern occurred from the viewpoint of whether the specific state law tort counterclaim asserted fell into any of Supreme Court's admittedly "varied formulations" of the public rights exception.
Applying this narrow interpretation, Stern is plainly inapposite to the matter before the Court. Despite its origination as a state law claim for conversion, the instant matter hinges entirely on this Court's ability to interpret and enforce the terms of its own Consent Order. The entry of the Consent Order was the intended resolution of several issues in the bankruptcy which had the Barge Facility and its disposition at their root. This Court has already concluded that because ARDI did not remove the Barge Facility and, thus, did
It is clear that the Consent Order could and, in fact, did "arise in" the bankruptcy proceeding. Therefore, this Court finds that because the crux of actual dispute is the interpretation of the Consent Order, this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (O). See Factory Mut. Ins. Co. v. Panda Energy Int'l, Inc. (In re Hereford Biofuels, L.P), 2012 Bankr.LEXIS 22, *3-4 (Bankr. N.D.Tex.2012) (holding that the court could finally adjudicate an adversary proceeding where the interpretation of its previously entered sale order was at the "crux" of the dispute between the two non-debtor parties to the adversary). As such, the narrow holding in Stern simply does not apply to this Court's ability to finally adjudicate the matter before it. See Moore v. Paladini (In re CD Liquidation Co., LLC), 462 B.R. 124, at 135-36 (Bankr. D.Del.2011) (finding that Stern did not apply to bar the bankruptcy court from enforcing the terms of its own confirmation order which enjoined a plaintiff from filing a derivative suit in district court).
Even if the holding in Stern did apply to the instant matter, this Court finds that both parties have consented to entry of final judgment by the bankruptcy court. This Court further concludes that such consent is sufficient to allow this Court to hear and finally determine the instant matter, regardless of whether it is statutorily defined as "core" or "non-core".
To determine whether, and to what extent, consent to bankruptcy court adjudication remains viable following the Stern decision, courts must answer three questions: A) are parties capable of waiving their right to adjudication of an Article III case or controversy by an Article III tribunal? B) is the matter of a type that may be adjudicated based on consent? and C) can consent can be implied from the acts or inaction of the parties in question?
In determining whether parties are capable of consenting to final adjudication of a case or controversy by a non-Article III tribunal, courts must consider both the personal and structural protections of Article III.
The Supreme Court has consistently upheld a litigant's ability to waive its "personal" right to have its matter heard by an Article III judge. See Peretz v. United States, 501 U.S. 923, 936, 111 S.Ct. 2661, 115 L.Ed.2d 808 (1991) ("[L]itigants may waive their personal right to have an Article III judge preside over a civil trial.") (citing Commodity Futures Trading
However, the Supreme Court has simultaneously concluded that the separation of powers principles implicated in the "structural" protections of Article III, are beyond the ability of individual parties to waive. See e.g., Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 850, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986) (finding that parties cannot cure the constitutional defect in permitted non-Article III tribunals to exercise the "judicial power of the United States" through consent, the same as they cannot consent to extend the subject-matter jurisdiction of the courts); Peretz, 501 U.S. at 937-39, 111 S.Ct. 2661.
Despite this conclusion, the Supreme Court has repeatedly upheld final adjudication by non-Article III tribunals when it has concluded that the structural protections of Article III are not implicated. See Peretz, 501 U.S. at 937-39, 111 S.Ct. 2661; Schor, 478 U.S. at 851-52, 106 S.Ct. 3245. Whether the structural protections of Article are "implicated", depends primarily on the degree of control exercised by Article III judges over of the non-Article III tribunal in question. See e.g., Peretz, 501 U.S. at 937-39, 111 S.Ct. 2661; United States v. Raddatz, 447 U.S. 667, 685-86, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980) (Blackmun, J., concurring). This Court finds that based on the degree of control exercised by Article III judges over bankruptcy courts, the structural protections of Article III are not implicated in the bankruptcy statutory scheme and, therefore, parties may effectively consent to final adjudication of matters by non-Article III bankruptcy courts.
In Peretz v. United States, the Supreme Court held that there was no constitutional defect when, following the consent of the parties, a district court judge delegates the duty of conducting voir dire in a felony proceeding to a magistrate judge, because no structural protections were implicated. Peretz v. United States, 501 U.S. 923, 111 S.Ct. 2661, 115 L.Ed.2d 808 (1991). In so concluding, the Court recognized that under the Magistrate's Act, Article III judges maintained a substantial amount of control over both the magistrate judges and the matters delegated to them. Id. at 937-38, 111 S.Ct. 2661. Specifically, the Court noted that district court judges were responsible for appointing magistrate judges, removing them from office, and maintaining plenary authority over what matters were delegated to the magistrate judges once they were appointed. Id. at 937-39, 111 S.Ct. 2661. Citing United States v. Raddatz, 447 U.S. 667, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980), the Supreme Court held that because the entire process of magistrate adjudication "takes place under the district court's total control and jurisdiction," there was no danger that the structural protections of Article III would be violated. Id. at 937, 100 S.Ct. 2406.
Similar to the Magistrates Act, the current statutory scheme in bankruptcy provides Article III judges with substantial "control" over the bankruptcy courts. For example, bankruptcy judges are appointed and subject to removal by Article III judges. See 28 U.S.C. § 152(a), (e). Article III judges also have the ability to withdraw the reference of cases to the bankruptcy courts upon a motion of any party-in-interest, or sua sponte for "cause shown". See 28 U.S.C. § 157(d). Certainly "cause shown" would include the fact that the civil litigation at issue is an Article III case or controversy. Perhaps most importantly, motions to withdraw the reference must be heard by Article III district court judges, ensuring all parties access to an Article III forum. See Fed R. Bankr.P. 5011(a). Consequently it is an
There is, however, one distinction between the statutory scheme for magistrates under 28 U.S.C. § 636(b)(3) as described in Peretz, and the statutory scheme in bankruptcy with regard to core matters. While section 636(b)(3) of the Judiciary Code does not contain an express provision for de novo review by an Article III court, the Supreme Court found that "nothing in the statute precludes a district court" from reviewing the magistrate's judges determinations de novo, if such review was requested. See Peretz, 501 U.S. at 939, 111 S.Ct. 2661. The jurisdictional scheme in bankruptcy, however, does allow for Article III judges to engage in ordinary appellate review of the findings of fact entered by the bankruptcy courts with regard to core matters. See Fed. R. Bankr.P. 7052 and 8013.
Id. at 590, 123 S.Ct. 1696. Nothing in Stern abrogates this precept.
Where the parties have consented, the scope of review provisions contained in the Bankruptcy Code and Magistrate's Act are identical. Under section 636(c)(1) of Title 28, full-time magistrate judges may hear and enter judgment on any civil proceeding "[u]pon the consent of the parties...." Id. Similarly, pursuant to 28 U.S.C. § 157(c)(2), bankruptcy courts may hear and determine any non-core matter "with the consent of all the parties to the proceeding...." Id. The constitutionality of the Magistrate's Act which permits parties to consent to final adjudication of civil matters by non-Article III magistrate judges has been consistently upheld. See In re Olde Prairie Block Owner, LLC, 457 B.R. 692, 701 (Bankr.N.D.Ill.2011) (citing cases from the United States Courts of Appeals for the First,
As the structural protections of Article III appear not to be implicated or eroded in the bankruptcy scheme when the parties consent, this Court can easily conclude that a party's waiver of the personal protections of Article III is sufficient to allow bankruptcy courts to finally adjudicate Article III cases and controversies. To find otherwise would be to completely ignore recent Supreme Court precedent in cases upholding the constitutionality of the Magistrate's Act. See Menotte v. United States (In re Custom Contractors, LLC), 462 B.R. 901, 910 (Bankr.S.D.Fla.2011) (quoting Olde Prairie Block Owner, LLC, 457 B.R. 692, 701 (Bankr.N.D.Ill.2011)). Such a finding would also ignore the portion of the Stern opinion wherein the Supreme Court reaffirmed the viability of the consent provisions with regard to non-core matters under 28 U.S.C. § 157(c)(2). Stern, 131 S.Ct. at 2607-08.
With regard to the second question, this Court finds that consent will apply to permit final adjudication by non-Article III bankruptcy courts of non-core and core matters alike.
There is no dispute that bankruptcy courts may finally adjudicate non-core matters upon the consent of all parties to the proceeding. This ability is codified at 28 U.S.C. § 157(c)(2), and was recognized by the Supreme Court in Stern. See Stern, 131 S.Ct. at 2607-08.
Following a need created by Stern, it also appears that an extension of the consent provision contained in 28 U.S.C. § 157(c)(2) to core matters is both logical and appropriate. See Bayonne Medical Center v. Bayonne/Omni Dev., LLC (In re Bayonne Medical Center), Bankr.No. 07-15195, Adv. No. 09-1689, 2011 WL
Prior to Stern bankruptcy courts maintained the ability to finally adjudicate all core matters regardless of consent. Therefore, because there was no reason for a "consent" provision to exist, the lack of such a provision is without consequence. Additionally, all of the structural protections present in the bankruptcy jurisdictional scheme with regard to non-core matters are present with regard to core matters as well. For example, Article III judges maintain the same control over bankruptcy judges regardless of whether the bankruptcy judge is hearing a core or non-core matter, and parties retain the right to seek withdrawal of the reference regardless of whether the opposing party has defined the matter as core or non-core in its pleadings. See 28 U.S.C. §§ 152(a)-(c), 157(a). In addition, it seems only logical that a statutory scheme which provides bankruptcy courts with the ability to finally adjudicate matters "related to" a bankruptcy case via consent should apply to matters that purportedly "arise in" or "arise under" the same. As a result, this Court concludes that consent applies to provide bankruptcy courts with the ability to finally adjudicate both statutorily defined core and non-core matters brought before them.
Finally, this Court finds that consent can be implied from the action (or inaction) of the parties to a proceeding.
Stern clearly stands for the proposition that consent can be implied through the statements of a party and by a party's delay in contesting the ability of a non-Article III tribunal to adjudicate the action. See Stern, 131 S.Ct. at 2607-08. Indeed, the Supreme Court determined that through his actions, statements acquiescing to adjudication by the bankruptcy court, and failure to object to bankruptcy court adjudication, the claimant in Stern had implicitly consented to the bankruptcy court hearing and determining his non-core defamation claim, and waived any arguments to the contrary. See id. Moreover, the Supreme Court concluded that
Stern was not the first time in recent years that the Supreme Court has recognized implied consent to final adjudication by a non-Article III tribunal. In Roell v. Withrow, 538 U.S. 580, 123 S.Ct. 1696, 155 L.Ed.2d 775 (2003), the Supreme Court held that consent to the entry of a final judgment by a non-Article III magistrate judge can be inferred from a party's conduct during litigation. Roell, 538 U.S. at 591, 123 S.Ct. 1696. The majority in Roell reasoned that by continuing to appear before a full-time magistrate judge after being advised of their right to have the matter adjudicated by a district court judge, two members of a prison medical staff had "clearly implied their consent" to final adjudication of the matter by the magistrate judge in question. Id. at 586, 123 S.Ct. 1696.
In both Stern and Roell, the Supreme Court also recognized the inherent danger in allowing a party that had consistently appeared before a tribunal without protest to suddenly change its position, and assert that the tribunal in question no longer maintains the ability to finally adjudicate the matter before it. In Roell, the Supreme Court concluded that inferring consent was appropriate under the circumstances because it "checks the risk of gamesmanship by depriving parties of the luxury of waiting for the outcome before denying the magistrate judge's authority." Roell, 538 U.S. at 590, 123 S.Ct. 1696. In Stern the Supreme Court went further and actually criticized the claimant's attempt to "sandbag" the bankruptcy court by belatedly raising the objection
Since the Stern decision, several other courts have persuasively concluded that a party may impliedly consent to final adjudication of certain matters by a non-Article III bankruptcy court. See e.g., Custom Contractors, 462 B.R. at 909 (concluding that by litigating for more than an year without filing a motion to withdraw the reference, the IRS impliedly consented to final adjudication of a trustee's complaint to recover allegedly fraudulent transfers); Hawaii Nat'l Bancshares, Inc. v. Sunra Coffee LLC (In re Sunra Coffee LLC), Bankr.No. 09-01909, Adv. No. 10-90009, 2011 WL 4963155, *5-6 (Bankr.D.Haw. Oct. 18, 2011) (concluding that a guarantor had impliedly consented to final adjudication of a complaint in foreclosure by the bankruptcy court when he failed to respond to either the notice of removal or motion for deficiency judgment filed in the case) (citations omitted). This Court agrees.
Thus, following clear precedent established by the Supreme Court, this Court must recognize implied consent as a viable means of consenting to final adjudication of Article III cases and controversies by a non-Article III bankruptcy court.
Applying the facts of the instant case to the consent analysis above, it is clear that both parties consented to adjudication of this action before this Court.
Initially, Buncher removed the pending case to this Court and has never challenged the ability of this Court to adjudicate
With regard to ARDI, consent is clear from statements made on the record as well as its inaction as the case proceeded in this forum. At the hearing on the Motion to Reopen Bankruptcy Case to Enforce Bankruptcy Court Order, Counsel for ARDI conceded that the action in question could be tried and finally adjudicated by the bankruptcy court. Once the Honorable M. Bruce McCullough
In addition, ARDI twice consented in writing to have this Court finally adjudicate the non-core matters between ARDI and Buncher.
This Court finds that through its pleadings, statements of counsel, and by continuing to litigate this matter over a period of eight months without moving to remand the action to state court or seeking to withdraw the reference, ARDI has consented to final adjudication of all core and non-core matters by this Court.
For the reasons expressed above, the Court finds that there are no genuine disputes of material fact and, as a matter of law, ARDI is not entitled to a judgment on its cause of action for conversion by virtue of the enforcement of the Court's Consent Order dated April 3, 2008. Because the Consent Order precludes the claim for conversion, the motion for summary judgment seeking dismissal of the complaint filed by Buncher shall be granted. An Order consistent with this Memorandum Opinion shall be entered.