UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

PIKEVILLE DIVISION

 

IN RE:

GROVER MURPHY CASE NO. 97-71012

DEBTOR

 

CONNECTICUT GENERAL LIFE

INSURANCE COMPANY PLAINTIFF

VS: ADV. 97-7044

GROVER MURPHY DEFENDANT

AND

PAUL D. DEATON INTERVENING PLAINTIFF

VS:

CONNECTICUT GENERAL LIFE

INSURANCE COMPANY THIRD PARTY DEFENDANT

OPINION AND ORDER

There is pending before the Court a Motion filed by Paul D. Deaton, attorney for the debtor in this proceeding, on behalf of himself, as an intervening plaintiff in the proceeding, to remand this proceeding to the Martin Circuit Court. Connecticut General Life Insurance Company has resisted the Motion contending that the matter is either a core proceeding or amounts to claims litigation against the debtor.

A reading of the Motion and the intervening plaintiff=s Complaint leads the Court to conclude that the Complaint filed by Deaton states a claim for relief, if at all, on his own behalf and not on behalf of the debtor or estate in this proceeding.

A review of the bankruptcy case underlying this adversary proceeding shows that it is a no asset case. To the extent that a recovery by Deaton against the plaintiff in this action leads to an indemnity claim against the estate, it would appear that such claim would be dischargeable as to the debtor and, it being a no asset case, would have no effect on the debtor or creditors.

The plaintiff cites this Court=s recent decision of In Re Travel Professionals International, Scott County, Inc., 31 B.C.D. 767 (Bkrtcy. E.D.Ky. 1997). In that case, this Court held that it was not required to remand the matter to the state court since the litigation removed involved a large proportion of the assets of the estate and the claim of the major creditor in the proceeding. The present case is distinguished from Travel Professionals by the fact that it appears to be a no asset case unless assets are later discovered.

While the present proceeding is arguably related to the bankruptcy proceeding, it appears that the present litigation between the attorney for the debtor and Connecticut General, which arose under state law, should be decided by courts of the Commonwealth of Kentucky.

For the foregoing reasons, it is hereby

ORDERED AS FOLLOWS:

    1. That this Court hereby abstains from hearing the within proceeding pursuant 28 U.S.C. '1334(c)(1); and
  1. That this adversary proceeding be, and the same hereby is, REMANDED to the Martin Circuit Court, Kentucky for further proceedings.

Dated this _____ day of March, 1998.

BY THE COURT

 

 

______________________________

JUDGE

COPIES TO:

Debtor

Lee Kessinger III, Esq.

Paul D. Deaton, Esq.