HVI Cat Canyon, Inc. v. GLR LLC, GRL LLC, and Randeep S. Grewal

Summary

The United States Bankruptcy Court for the Central District of California grants Plaintiffs' motion to remand a removed California state-court action. The court holds that removal of the First Cause of Action was untimely under Federal Rule of Bankruptcy Procedure 9027(c)(3), while removal of the newly added Second Cause of Action was timely. The court also concludes that the contractual and quasi-contractual claims do not arise under or arise in the Bankruptcy Code, and addresses equitable remand considerations.

Holdings

1. Federal Rule of Bankruptcy Procedure 9027(c)(3) measures removal timeliness separately for each claim or cause of action, and a claim previously asserted in the original complaint cannot be removed again after the applicable thirty-day period has expired merely because it appears in an amended complaint.
2. Removal of a genuinely new cause of action added by an amended complaint is timely when filed within thirty days after the removing party receives the amended complaint.
3. Contractual and quasi-contractual claims under California law do not arise under the Bankruptcy Code or arise in a bankruptcy case merely because their factual background involves bankruptcy events, bankruptcy orders, or anticipated bankruptcy-law defenses.
4. The bankruptcy court had related-to jurisdiction because the litigation could conceivably affect the bankruptcy estate through UBS's asserted indemnity claim if estate assets became available for distribution.
5. A bankruptcy court may remand a proceeding over which it has related-to jurisdiction on any equitable ground, and the equitable factors overwhelmingly favored remand of this state-law dispute to the California Superior Court.

Questions Presented

1. Whether removal of the breach-of-contract claim was timely under Federal Rule of Bankruptcy Procedure 9027(c)(3) after the claim had previously been removed and remanded.
2. Whether removal of the newly added money-had-and-received claim was timely.
3. Whether the amended complaint arose under or arose in the bankruptcy case for purposes of 28 U.S.C. § 1334(b).
4. Whether the bankruptcy court had related-to jurisdiction because the outcome could conceivably affect the bankruptcy estate through UBS's asserted indemnity claim.
5. Whether the civil action should be remanded on equitable grounds under 28 U.S.C. § 1452(b).

Disposition

remanded