UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
CLARENCE B. CREECH
DEBTOR CASE NO. 97-10037
CLARENCE B. CREECH PLAINTIFF
VS. ADV. NO. 98-1006
DEAN HALL; JERRY HALL;
CORA HALL; ESTATE OF
RUTH HALL CREECH DEFENDANTS
This matter is before the Court on Motions by defendants Jerry Hall, Dean Hall and Cora Hall for Jury Trial and Assignment of Proper Venue to District Court. The defendants are appearing in this matter pro se, and while the Motions are couched in terms of venue, this Court will treat them as motions for abstention. The plaintiff has responded to the Motions, and this matter has been submitted for decision pursuant to an Order of Submission entered herein on September 24, 1998. This Court has jurisdiction of this matter pursuant to 28 U.S.C.'1334(b); the plaintiff has alleged that it is a core proceeding pursuant to 28 U.S.C. '157(b)(2)(E),(F), and (H).
The plaintiff filed his Chapter 11 petition in this Court on January 24, 1997, and a Chapter 11 plan was confirmed on June 15, 1998. The Complaint herein was filed on July 23, 1998. It seeks to recover certain sums from the defendants Jerry and Dean Hall, the plaintiff=s stepsons; Cora Hall, Jerry Hall=s wife; and the Estate of Ruth Hall Creech (Athe Estate@). Ruth Hall Creech is the plaintiff=s deceased wife. Jerry and Dean Hall were co-executors of the Estate until their removal in 1996, and Cora Hall was its former receiver.
The plaintiff and the defendants have for several years been embroiled in controversy over the disposition of certain properties owned by the plaintiff and his wife as tenants in common at the time of her death in 1993. As set out in the plaintiff=s Complaint, Ruth Hall Creech=s will left nothing to her husband, and the residue of her estate was left to her sons Jerry and Dean Hall. The plaintiff renounced the will and exercised his option to take against it. He is a co-owner of these properties with Jerry and Dean Hall, their ownership being subject to his spousal interest. The Estate is the subject of a probate action in the Boyd District Court. It is currently unrepresented.
The Complaint filed herein, except for Count VII, seeks sums that the plaintiff maintains were either improperly disbursed from the Estate or which are due and owing to him from the Estate. Count VII alleges that the defendants have failed to properly administer the Estate. Each act or failure to act occurred pre-petition. The Motions for Jury Trial and Assignment of Proper Venue to District Court were filed on August 17, 1998. The Motions appear to ask this Court to transfer this matter to the United States District Court for the Southern District of Ohio, based on the question of whether venue is proper in this Court. There is no question that venue is proper in this Court. 28 U.S.C.'1409(a) states Aa proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending.@ The defendants have obviously confused venue and jurisdiction, and their Motions are being treated as requests that this Court permissively abstain from hearing this matter.
This Court believes that this action is amenable to permissive abstention pursuant to 28 U.S.C.'1334(c)(1) which provides:
Nothing in this section prevents a district court 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.
In deciding whether to choose to abstain from hearing a matter in accordance with'1334(c)(1), courts have developed a number of factors to consider. These include
>(1) the effect or lack thereof on the efficient administration of the estate if a Court recommends abstention;
(2) the extent to which state law issues predominate over bankruptcy issues;
(3) the difficulty or unsettled nature of the applicable state law;
(4) the presence of a related proceeding commenced in state court or other non-bankruptcy court;
(5) the jurisdictional basis, if any, other than 28 U.S.C.'1334;
(6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case;
(7) the substance rather than form of an asserted>core= proceeding;
(8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to entered in state court with enforcement left to the bankruptcy court;
(9) the burden on the bankruptcy court
(10) the likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties;
(11) the existence of a right to a jury trial; and
(12) the presence in the proceeding of non-debtor parties.
In Matter of Walker, 224 B.R. 239, at 242 (Bkrtcy.M.D.Ga. 1998), quoting from Matter of Foster, 105 B.R. 746, at 749-50 (Bkrtcy.M.D.Ga. 1989). Taking all of these factors into consideration, this Court believes that permissive abstention is appropriate.
The plaintiff contends in response that it would be improper to send this matter back to the Boyd District Court because that court does not have subject matter jurisdiction. The plaintiff argues that because an adversary proceeding has been filed in this Court, the probate jurisdiction statute, KRS 24A.120, denies jurisdiction to the district court. That statute, however, must be read together with KRS 394.240. KRS 24A.120 provides in pertinent part:
District Court shall have exclusive jurisdiction in:
. . . . . .
(2) Matters involving probate, except matters contested in an adversary proceeding. Such adversary proceeding shall be filed in circuit court in accordance with the Kentucky Rules of Civil Procedure and shall not be considered an appeal;
(3) Matters not provided for by statute to be commenced in circuit court shall be deemed to be nonadversarial within the meaning of subsection (2) of this section and therefore are within the jurisdiction of the district court.
The statute concerning actions in circuit court, KRS 394.240, provides in pertinent part:
(1) Any person aggrieved by the action of the district court in admitting a will to record or rejecting it may bring an original action in the circuit court of the same county to contest the action of the district court. Such action shall be brought within two (2) years after the decision of the district court. The parties may, in the same action, or in a separate action if the validity of the will is not in issue, seek construction, interpretation or reformation of a will.
It seems obvious that the adversary proceeding referred to in KRS 24A.120(2) is the kind set out in KRS 394.240. In fact Kentucky courts have ruled thatAthe district court=s jurisdiction over probate matters continues until such time as a suit is filed in circuit court under a statute authorizing such filing.@ Mullins v. First American Bank, Ky.App., 781 S.W.2d 527 (1989), at 529. The Boyd District Court is therefore the court which should hear this matter. The plaintiff=s concerns about timely adjudication speak to the way the defendants have conducted themselves during the course of this controversy, whether here or in state court. The plaintiff will have to deal with that no matter what court he is in.
This Court therefore concludes that it will abstain from hearing this matter. An order in conformity with this opinion will be entered separately.
By the Court -
Paul Stewart Snyder, Esq.
Catherine Hadden, Esq.