United States District Court, W.D. Texas, Austin Division
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT
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.
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”),
current landlord under the Lease. OLP alleges that the same
day the Lease was executed, Harden Healthcare, LLC
(“Harden”) 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”) 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
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)
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
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.
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.
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.
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.
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).
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. ...