NORMAN K. MOON, District Judge.
This matter is before the Court on Petitioner Austin McCorkle's ("McCorkle") motion to withdraw reference and Respondent Peter Herold's ("Herold") subsequent motion to dismiss. (Dkts. 1, 3). Herold and his wife previously filed for Chapter 13 Bankruptcy in the United States Bankruptcy Court for the Western District of Virginia. (Dkt. 2 at ECF 1); In re Peter John Herold, Sr. and Amy Bond Herold, No. 17-62475, (Bankr. W.D. Va. Dec. 27, 2017). Before Herold filed for bankruptcy, McCorkle sued him in Virginia state court for injuries sustained in a car accident. The accident was allegedly caused by Herold's intoxication. Upon Herold's filing for bankruptcy, McCorkle's state action was stayed. McCorkle now seeks to have his claim against Herold excepted from the ongoing bankruptcy proceedings, pursuant to 11 U.S.C. § 523(a)(9), and litigated in this Court. See 28 U.S.C. §§ 157(b)(5), (d). Herold has appeared and moved to dismiss the instant action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Although I will grant McCorkle's motion to withdraw reference, I find permissive abstention is appropriate and will dismiss the instant case.
"Under the Bankruptcy Code, a district court, and not the bankruptcy judge, must try personal injury tort and wrongful death claims."
28 U.S.C. § 157(b)(5). Thus, withdrawing the reference of personal injury actions is mandatory under the language of § 157(b)(5). Desimone Hosp. Servs., LLC v. W. Virginia-Am. Water Co., No. AP 2:14-2008, 2014 WL 1577051, at *3 n.3 (S.D.W. Va. Apr. 16, 2014) (noting personal injury tort claims "are the subject of mandatory withdrawal of reference pursuant to 28 U.S.C. § 157(b)(5)."); In re 610 W. 142 Owners Corp., No. 94 B 44488 (JGH), 1999 WL 294995, at *2 (S.D.N.Y. May 11, 1999) (same).
Here, neither party contests that McCorkle's claim is anything other than a personal injury tort claim. Indeed, his claim is for common law negligence, arising out of a car accident, seeking damages for personal injuries. In re Cramer, No. ADV. 10-1291 MBK, 2011 WL 2112518, at *2 (D.N.J. May 26, 2011) (granting plaintiff's motion to withdraw reference under § 157(b)(5) for a claim involving a car accident). Accordingly, the Court will grant McCorkle's motion to withdraw reference under the mandate in § 157(b)(5).
Although granting McCorkle's motion to withdraw reference is mandatory under § 157(b)(5), subsection (b)(5) "has consistently been construed to recognize discretion in district courts to leave personal injury cases where they are pending. In other words, the Bankruptcy Code "allows abstention for personal injury cases' and only `where abstention does not occur' will the requirement for adjudication in a district court take effect.'" In re Pan Am. Corp., 950 F.2d 839, 844 (2d Cir. 1991) (quoting In re White Motor Credit, 761 F.2d 270, 273 (6th Cir. 1985)). A district court is not precluded, "in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11." 28 U.S.C. § 1334(c)(1). Such "abstaining" is called permissive abstention.
The Court considers a dozen factors when determining whether permissive abstention is appropriate:
In re Eastport Assocs., 935 F.2d 1071, 1075 (9th Cir. 1991); see also In re Lee, 461 F. App'x 227, 238 (4th Cir. 2012) (discussing the second, fourth, and tenth factors). "[O]ne or more (not necessarily all)" of these factors need be considered. In re Cody, Inc., 281 B.R. 182, 190 (S.D.N.Y. 2002) (emphasis in original), aff'd in part, appeal dismissed in part, 338 F.3d 89 (2d Cir. 2003). "Courts should apply these factors flexibly, for their relevance and importance will vary with the particular circumstances of each case, and no one factor is necessarily determinative." Matter of Chicago, Milwaukee, St. Paul & Pac. R. Co., 6 F.3d 1184, 1189 (7th Cir. 1993). On the whole, the factors weigh in favor of abstention in this case.
To begin, state law issues predominate over any bankruptcy issues. The presence of a state law issue, while "not enough to warrant permissive abstention" by itself, is nevertheless "a significant consideration." In re L & S Indus., Inc., 989 F.2d 929, 935 (7th Cir. 1993). Here, McCorkle's lone claim against Herold is for common law negligence under Virginia law. There are currently no independent federal or bankruptcy claims being asserted by McCorkle.
Therefore, this factor weighs in favor of abstention.
There is a related proceeding already commenced in state court. McCorkle previously filed suit against Herold in state court seeking relief for his same state law claim. See Joseph McCorkle v. Peter John Herold, No. CL17000547-00, (Va. Cir. 2017). This weighs heavily in favor of abstention.
Aside from 28 U.S.C. § 1334, there is no other jurisdictional basis for McCorkle's purely state law claim. First, the parties are not of diverse citizenship. (Dkt. 1-2 at ECF 4 (alleging both parties are residents of Virginia)). Thus, diversity of citizenship jurisdiction is lacking. See 28 U.S.C. § 1332. Second, McCorkle's claim presents no issue of federal law. Thus, there is no federal question or "arising under" jurisdiction. See 28 U.S.C. § 1331. With no other jurisdictional basis, this factor weighs heavily in favor of abstention.
The specter of forum shopping is also present here. "The use of the Bankruptcy Code to obtain a favorable forum should not be encouraged." Matter of U.S. Brass Corp., 110 F.3d 1261, 1265 (7th Cir. 1997); In re Borgini, No. 05-7110, 2005 WL 2205714, at *3 (Bankr. C.D. Ill. Aug. 25, 2005) (finding forum shopping was present when there were "no bankruptcy law issues presented in the matter; . . . no independent basis for federal jurisdiction, and, as a personal injury case with a jury demand, [the Bankruptcy] Court [had to] refer the matter for trial to the District Court."). Here, as has been discussed above, there are currently no questions of bankruptcy law present
Based on the factors discussed above, the Court finds that permissive abstention is appropriate. The remaining factors do not alter this result.
Under the Bankruptcy Code, all ongoing legal proceedings against a debtor are automatically stayed when the debtor files for bankruptcy. See 11 U.S.C. § 362. However, a federal court can sua sponte lift an automatic stay to effectuate its rulings. See 11 U.S.C. § 105(a);
The Clerk of the Court is directed to send a certified copy of this memorandum opinion and accompanying Order to all counsel of record.
28 U.S.C. § 1334(c)(2). Here, neither party has moved for mandatory abstention. Accordingly, only permissive abstention is addressed.
Further, while bankruptcy courts are not able to issue a final judgment on a state common law claim, they can still make factual findings regarding the issue of intoxication when determining dischargability. Whitson v. Middleton, 898 F.2d 950, 952 (4th Cir. 1990). In the event that McCorkle obtains a favorable final judgment in state court on his negligence claim, the Bankruptcy Court can sufficiently adjudicate the issue of intoxication for purposes of determining whether the debt (i.e., the final judgment) is dischargable.