United States District Court, D. Idaho
In re FARMERS GRAIN, LLC, Debtor.
DAVID R. UNRUH TRUST and DAVID R. UNRUH as Trustee, Defendants. NOAH G. HILLEN, Trustee, Plaintiff,
MEMORANDUM DECISION AND ORDER
LYNN WINMILL U.S. DISTRICT COURT JUDGE
the Court are two motions filed by Defendants David R. Unruh
Trust and David Unruh: (1) an unopposed motion to withdraw
the reference; and (2) a motion in support of a demand for a
jury trial. See Dkts. 1, 2. The Court will grant the
motion to withdraw the reference but will delay doing so
until the matter is ready for trial. Because the Court is
delaying withdrawal of the reference, the bankruptcy court
will decide the pending motion in support of the jury trial
demand. To be clear, an Article III judge will ultimately
preside over any trial in this proceeding (be it bench or
jury) and issue the final judgment, but the bankruptcy court
will decide pretrial issues, including the threshold issue of
whether defendants waived their right to a jury trial.
April 2017, Farmers Grain, LLC filed a chapter 11 bankruptcy
petition. Roughly two years later (after the bankruptcy was
converted to a chapter 7), the Trustee filed this adversary
proceeding. The Trustee alleges that Farmers Grain
transferred $300, 000 to the defendants, which the Trustee
now seeks to avoid.
answered the Trustee's complaint on June 20, 2019. The
answer did not include a demand for jury trial. On August 7,
2019 (the same date as the first pretrial conference
conducted in the proceeding), the Trustee filed a notice of
consent to final judgment by the bankruptcy court. Shortly
afterward, Defendants filed both pending motions. The Trustee
does not oppose the motion to withdraw the reference but says
Defendants have waived their right to a jury trial.
The Motion to Withdraw the Reference
acknowledge that the Court need not withdraw the reference
immediately. Accordingly, as has been its practice with
fraudulent transfer claims in the wake of Stern v.
Marshall, 564 U.S. 462 (2011), the Court will grant the
unopposed motion to withdraw the reference but will delay
doing so until the bankruptcy court certifies that the matter
is ready for trial.
11 U.S.C. § 157(c), the bankruptcy court may
“hear” the Trustee's claims, and submit
proposed findings of fact and conclusions of law to the
district court. See, e.g., Executive Benefits Ins. Agency
v. Arkison, 573 U.S. 25 (2014). If either party files a
dispositive motion, the bankruptcy court may entertain that
motion and submit proposed findings of fact, conclusions of
law, and a recommended disposition of the case to this Court.
See Id. When the bankruptcy court certifies that the
case is ready for trial, the Court will withdraw the
reference and set the matter for trial.
The Motion in Support of Jury Trial Demand
the Court is delaying withdrawal of the reference until the
proceeding is ready for trial, the bankruptcy court will take
up defendant's motion in support of its jury trial demand
and will thus decide whether defendants waived their right to
a jury. Regardless of how the issue is decided, the parties
should be aware of two rules not mentioned in the briefing:
Federal Rule of Civil Procedure 6(b).
this rule, a court may extend the time “[w]hen an act
may or must be done within a specific time: . . . (B) on
motion made after the time has expired if the party failed to
act because of excusable neglect.” Fed.R.Civ.P.
6(b)(1)(B). Rule 6(b) thus provides a potential avenue of
relief if the bankruptcy court determines defendants failed
to timely demand a jury. Accordingly, ...