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OLP Wyoming Springs, LLC v. Harden Healthcare, LLC

United States District Court, W.D. Texas, Austin Division

November 14, 2019

OLP WYOMING SPRINGS, LLC, Plaintiff
v.
HARDEN HEALTHCARE, LLC Defendant
v.
BENJAMIN HANSON, Intervenor

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          SUSAN HIGHTOWER UNITED STATES MAGISTRATE JUDGE

         TO: THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before this Court are Defendant's Motion to Transfer Venue to the Northern District of Texas, filed August 2, 2019 (Dkt. No. 4); Plaintiff Old Wyoming Springs, LLC's Motion to Abstain and/or Remand, filed August 8, 2019 (Dkt. No. 9); Joint Omnibus Supplement on Pending Motions, filed November 7, 2019 (Dkt. No. 39); and the various Response and Reply Briefs. On October 18, 2019, the District Court referred the above motions to the undersigned Magistrate Judge for Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1), Federal Rule of Civil Procedure 72, and Rule 1 of Appendix C of the Local Rules of the United States District Court for the Western District of Texas.

         I.BACKGROUND

         On November 10, 2010, Prevarian Senior Living, LP, as landlord, entered into a Lease Agreement (the “Lease”) with PM Management-Round Rock AL, LLC (“Tenant”) as tenant. On August 6, 2013, the Lease was transferred and assigned to OLP Wyoming Springs, LLC (“OLP”), [1]the current landlord under the Lease. OLP alleges that the same day the Lease was executed, Harden Healthcare, LLC (“Harden”)[2] executed a Guaranty Agreement unconditionally guaranteeing the payment and performance of the tenant's obligations under the Lease, including “the full and prompt payment of Rent” and “all other sums required to be paid by Tenant under the Lease.” Dkt. 1-3 at ¶ 8. OLP further alleges that on April 1, 2015, Senior Care Centers, LLC (“SCC”)[3] also executed a Guaranty Agreement unconditionally guaranteeing the payment and performance of the tenant's obligations under the Lease. OLP alleges that through the Guaranties, both SCC and Harden guaranteed the payment and performance of all obligations under the Lease and waived any requirement for Landlord to first pursue the Tenant.

         OLP alleges that the Tenant has defaulted on its obligations under the Lease. Accordingly, on November 20, 2018, OLP filed this lawsuit in state court against Harden and SCC, alleging breach of contract and seeking to recover damages under the Guaranty Agreements. See Dkt. No. 1-3, OLP Wyoming Springs LLC v. Harden Healthcare LLC and Senior Care Centers LLC, No. 18-1511-C368 (368th Dist. Ct. Williamson County, Tex. Nov. 20, 2018) (“Petition”).

         On December 4, 2018, SCC and the Tenant filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Northern District of Texas, Dallas Division. In re Senior Care Centers, LLC, No. 18-33967 (BJH) (Bankr. N.D. Tex. Dec. 4, 2018) (Dkt. No. 39-1) (“Bankruptcy Case”). On July 24, 2019, OLP non-suited SCC from the instant lawsuit without prejudice. Dkt. No. 1-3 at p. 9. Thus, SCC is no longer a defendant in this case.

         On July 9, 2019, Harden filed a motion for leave to join Benjamin Hanson, Harden's former corporate officer, as a third-party defendant, alleging that Hanson breached his fiduciary duties. Dkt. No. 1-3 at p. 8-9. The state court denied the motion for leave. On July 25, 2019, however, Hanson filed a petition to intervene as a matter of right, seeking a declaratory judgment that he did not breach his fiduciary duties. Id. at p. 10. On July 29, 2019, Harden asserted counterclaims against Hanson and crossclaims against OLP, alleging that Hanson breached his fiduciary duties to Harden and that OLP aided and abetted Hanson's breach of fiduciary duty. Id.

         On August 2, 2019, Harden removed this case to federal court, arguing that the Court has jurisdiction over this matter pursuant 28 U.S.C. § 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure. Harden contends that the dispute is a “core” proceeding in the Bankruptcy Case pursuant to 28 U.S.C. §§ 157(b)(2) and 1334(b) because the claims asserted by OLP “may concern the allowance or disallowance of claims against the estate, and estimation of claims or interests.” Dkt. No. 1 at p. 8. Accordingly, Harden asks this Court to transfer this case, pursuant to 28 U.S.C. § 1412, “to the Northern District of Texas-the district where the Bankruptcy Case is currently pending-for subsequent referral to the Bankruptcy Court.” Dkt. No. 4 at p. 2.

         On August 27, 2019, after Harden's Motion to Transfer was filed, OLP, SCC and the Tenant filed a notice of settlement with the Bankruptcy Court. Dkt. No. 39 at p. 2. The Settlement Agreement specifically states that “this Agreement shall not in any way affect the obligations of Harden Healthcare, LLC, or its successor (‘Harden') arising under any related guaranty (the ‘Harden Guaranty') of the Lease.” Dkt. No. 39-1 at ¶ H. On October 25, 2019, the Bankruptcy Court approved the Settlement Agreement. Dkt. No. 39-1. A final hearing on the proposed plan is scheduled for December 4, 2019. Accordingly, subject to confirmation of the proposed plan, all disputes between OLP and the bankruptcy debtors have been resolved.

         OLP objects to the Motion to Transfer. In its Motion to Abstain and/or Remand, OLP argues that this case should be remanded to state court because (1) Harden's Notice of Removal was untimely under the removal statute, (2) the Court does not have jurisdiction under 28 U.S.C. § 1334, and (3) principles of equity support remand. OLP also moves for monetary sanctions against Harden, arguing that there was no objectively reasonable basis for removal.

         II.ANALYSIS

         A court may exercise its discretion in determining the order in which to address decisions not affecting the merits of a case. Hill v. Keliher, 2019 WL 3837113, at *3 (S.D. Tex. Aug. 14, 2019). Accordingly, the Court will first address OLP's Motion to Remand. See Needbasedapps, LLC v. Robbins, 926 F.Supp.2d 919, 926 (W.D. Tex. 2013); Hamrick v. Feldman, 2013 WL 12098757, at *2 (S.D. Tex. Jan. 15, 2013).

         OLP argues that this case should be remanded to state court because (1) Harden's Notice of Removal was untimely under the removal statute, (2) the Court does not have jurisdiction under 28 U.S.C. § 1334 to review this case, and (3) principles of equity weigh in favor of remanding the case to state court. On a motion to remand, “[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. ...


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