PATRICK M. FLATLEY, Bankruptcy Judge.
Pending before this court is a Motion to Dismiss ("Motion") filed by Richard W. Powell, Sr., Lakeside Marina, LLC, Richard W. Powell, Jr., and Julie G. Powell (collectively, the "Movants"). The Movants assert that the court must dismiss the crossclaims asserted by Michael Pavlock ("Mr. Pavlock") because this court does not have subject-matter jurisdiction under Fed.R.Civ.P. 12(b)(1). The Movants also seek dismissal of the crossclaims because Mr. Pavlock allegedly failed to follow the proper procedure under Fed. R. Bankr.P. 7014(a) to amend his third-party complaint and failed to file crossclaims in a timely
On March 31, 2009, Thomas Fluharty (the "Trustee"), the Chapter 7 Trustee appointed to administer the bankruptcy estate of Golden Investment Acquisitions, LLC (the "Estate"), commenced this adversary proceeding seeking the turnover of certain property under 11 U.S.C. § 542. In his complaint, the Trustee demands that Defendants Charles and Trudy Gratz and Fayette Investments Acquisitions, LLC ("Fayette"), turn over two vehicles that are property of the Estate but are allegedly in the Gratzs' possession. The Trustee also demands that Richard Powell, Jr., and Lakeside Marina, LLC ("Lakeside"), turn over funds in the amount of $1,028,000.00, which represent the amount due to the Trustee for the sale of real and personal property to Fayette. Lastly, the Trustee demands the turnover of $175,000.00, representing the value of a contract from Defendants Mr. Pavlock, Michaels Automotive Services, Inc., and Spencer W. Graham, II ("Spencer Graham"), on the basis that they improperly diverted funds from the Debtor. On May 27, 2009, Attorney Jennifer McGinley, on behalf of Fayette, Lakeside, Richard Powell, Jr., Spencer Graham, Mr. Pavlock and Michaels Automotive Services, Inc. filed an Answer to the Trustee's Complaint and asserted crossclaims against Craig Golden, the Gratzs and their attorney, James Marchewka, and a counterclaim against the Trustee. Attorney McGinley withdrew from the case on June 28, 2011.
On September 26, 2012, Mr. Pavlock, acting pro se, filed an amended pleading alleging, among other things, various crossclaims against the Movants.
The Movants seeks dismissal of Mr. Pavlock's claims against them because they allege that the court does not have subject-matter jurisdiction over Mr. Pavlock's crossclaims. The court agrees; it does not have jurisdiction over Mr. Pavlock's claims pursuant to 28 U.S.C. § 1334(b). Under that statute, the "district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11." 28 U.S.C. § 1334(b). For nearly three decades, a standing order of reference issued by the district court for this district, last amended on April 2, 2013, has referred such proceedings to this court pursuant to 28 U.S.C. § 157(a). Importantly, the "jurisdiction of the bankruptcy courts, like that of other federal courts, is grounded in, and limited by, statute." Celotex Corp. v. Edwards, 514 U.S. 300, 307, 115 S.Ct. 1493, 131 L.Ed.2d 403 (1995).
A proceeding "arises under" title 11 where either bankruptcy law creates the relief sought or the right to relief necessarily depends on resolution of a substantial question of bankruptcy law. Poplar Run Five Ltd. P'ship v. Virginia Elec. & Power Co. (In re Poplar Run Five Ltd. P'ship), 192 B.R. 848, 855 (Bankr.E.D.Va. 1995) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)); accord Dwyer v. First Nat'l Bank (In re O'Brien), 2009 U.S. Dist. LEXIS 42835 at *10, 2009 WL 1394239 at *3 (S.D.W.Va. May 19, 2009) ("[A] proceeding [arises under title 11 or arises in the bankruptcy case] ... if it invokes a substantive right provided by title 11 or if it is a proceeding that, by its nature, could arise only in the context of a bankruptcy case."). Claims that "arise in" bankruptcy are "claims that by their nature, not their particular factual circumstance, could only arise in the context
Claims are "related to" a bankruptcy case when "the outcome ... could conceivably have any effect on the estate... [and] could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) ..." Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984); See also New Horizon of N.Y. LLC v. Jacobs, 231 F.3d 143, 151 (4th Cir.2000) ("This court has adopted the Pacor `related to' test ..."). "[T]he Pacor test does not require certain or likely alteration of the debtor's rights, liabilities, options or freedom of action, nor does it require certain or likely impact upon the handling and administration of the bankruptcy estate." Owens-Illinois, Inc. v. Rapid Am. Corp. (In re Celotex Corp.), 124 F.3d 619, 626 (4th Cir.1997); See also Celotex Corp. v. Edwards, 514 U.S. 300, 308 n. 6, 115 S.Ct. 1493, 131 L.Ed.2d 403 (1995) ("[W]hatever [`related to'] test is used, these cases make clear that bankruptcy courts have no jurisdiction over proceedings that have no effect on the estate of the debtor."). "Moreover, the cause of action is not `related to' the debtor's bankruptcy case because win, lose or draw, there would be no effect on the bankruptcy estate." Johnston v. Valley Credit Servs. (In re Johnston), Case No. 05-6288, 2007 WL 1166017 at *5-6, 2007 Bankr.LEXIS 1174 at *17-19 (Bankr. N.D.W.Va. Apr. 12, 2007). "The `related to' category is not so broad as to encompass litigation of claims arising under state law or non-bankruptcy federal law that will not have an effect on the bankruptcy estate, simply because one of the litigants filed a petition in bankruptcy." Henneghan v. Columbia Gas (In re Henneghan), Case No. 05-122, 2005 WL 2267185 at *3, 2005 Bankr.LEXIS 1770 at *11 (Bankr. E.D.Va. June 22, 2005) (internal citations omitted). Moreover, where the court does not have an independent basis to assert jurisdiction under 28 U.S.C. § 1334, the court lacks the authority to exercise supplemental jurisdiction under § 1367(a). Johnston, 2007 WL 1166017 at *6-9, 2007 Bankr.LEXIS 1174 at *21-28.
Regarding his crossclaims, Mr. Pavlock does not seek relief under any part of the Bankruptcy Code, nor is any provision of the Code applicable to Mr. Pavlock's claims to confer "arising under" jurisdiction. Likewise, Mr. Pavlock's claims do not "arise in" the Bankruptcy Code because they do not have an impact on the administration of the Estate, including the avoidance powers of the Trustee and the disposition of property of the Estate. Finally, the court cannot exercise "related to" jurisdiction over his claims because they do not have a conceivable effect on the Estate. In his complaint, all of Mr. Pavlock's crossclaims against Mr. Powell, Jr. and third-party claims against Julie Powell and Richard Powell, Sr. stem from their affiliation with non-debtor entities. Mr. Pavlock does not allege facts that would remotely suggest that the Movants' alleged conduct injured or impacted the Estate. Rather, Mr. Pavlock alleges damage solely to his individual pecuniary and business interests. It is apparent from Mr. Pavlock's prayer for relief that his claims will not provide any recovery or benefit to the Estate. Similarly, a recovery on Mr. Pavlock's claims would be paid directly by the Movants without any impact on the Estate because neither Mr. Pavlock nor the Movants are creditors of
Consistent with this Memorandum Opinion, the court will enter a separate order pursuant to Fed. R. Bankr.P. 7058 granting the Movants' Motion to Dismiss.