# Roggio v. Roggio

> United States Bankruptcy Court, M.D. Pennsylvania · February 28, 2020

URL: https://www.frixlaw.com/law-library/cases/10461902

## Case

- **Court:** United States Bankruptcy Court, M.D. Pennsylvania
- **Decided:** February 28, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10461902

## Opinion text

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN RE:

ROSS WILLIAM ROGGIO

Debtor 1 Chapter: 7

Case No.: 5-17-bk-02119 RNO
ROSS WILLIAM ROGGIO Adversary No.: 5-19-ap-00099 RNO
SOON JA ROGGIO

Plaintiff(s) Document No.: 6
vs.
KRISTY LYNN ROGGIO Nature of
aka KRISTY MERRING Proceeding: Motion to Dismiss

Defendant(s)

OPINION1
The Chapter 7 Debtor and his mother filed a five-count Complaint against his estranged
wife. A Motion to Dismiss Pursuant to Rules 12 and 20, F.R.C.P. was filed by the Defendant.
Count I of the Complaint will be dismissed, with leave to amend. The Court will permissively
abstain from hearing Counts II through V. The Co-Plaintiff will be dropped as a party.
I. Procedural History
Ross William Roggio (“Ross”) filed a voluntary petition under Chapter 13 of the
Bankruptcy Code on May 22, 2017. Ross’ filing was converted to a case under Chapter 7 of the
Bankruptcy Code on December 10, 2018. The conversion was ordered after Ross elected to
convert from Chapter 13 to Chapter 7. 5-17-bk-02119-RNO, ECF No. 184.
The subject Adversary Proceeding was commenced by the filing of a five-count
Complaint on September 18, 2019. 5-19-ap-00099-RNO, ECF No. 1. The Plaintiffs are the
Roggio a/k/a Kristy Merring (“Kristy”). Ross and Kristy are estranged spouses.
Kristy replied to the Complaint by filing a Motion to Dismiss (“Motion”). The Motion
asserts that Soon Ja is not a proper party plaintiff. The Motion also seeks to dismiss the
Adversary Proceeding for lack of jurisdiction and for failure to state a claim upon which relief
can be granted. The Motion has been briefed by the parties and oral argument was heard on
January 16, 2020.
The underlying Chapter 7 case was reassigned to me on February 13, 2019, due to the
untimely passing of my colleague, the Honorable John J. Thomas. It is noted that this is the sixth

adversary proceeding filed in this Chapter 7 case. The five prior adversary proceedings have all
been closed. Further, on February 7, 2020, the Chapter 7 Trustee, John J. Martin, filed a Chapter
7 Trustee’s Final Report. 5-17-bk-02119-RNO, ECF No. 315.
II. Jurisdiction
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. Count
I is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(G). Counts II through V are non-core
proceedings.
III. Discussion
The Counts of the Complaint will be discussed in seriatim.

A. Count I – Violation of Automatic Stay
Count I of the Complaint alleges that on December 12, 2012, Ross and Kristy were
married. 5-19-ap-00099-RNO, ECF No. 1, ¶ 6. It is further alleged that Ross and Kristy entered
into a separation agreement on November 28, 2016. A copy of a separation agreement of that
date is attached as Exhibit 1 to the Complaint.
The Complaint further alleges that Ross and Kristy are parties to “domestic litigation” in
the Court of Common Pleas of Monroe County, Pennsylvania. It is alleged that the state court
docketed to 9149-CV-2016 and 1272-DR-2016 (“State Court Proceedings”).
The Complaint makes reference to an order entered in the State Court Proceedings. The
order is dated March 1, 2017, and a copy is attached as Exhibit 2 to the Complaint. Count I of the
Complaint alleges, in summary fashion, that Kristy has failed to turn over to Ross certain non-
marital property. The Complaint alleges that Kristy, “has ‘exercise[d] control over property of
the estate’ in violation of the automatic stay.” 5-19-ap-00099-RNO, ECF No. 1, ¶ 41 (citation
omitted).
The Motion questions the Court’s jurisdiction to hear the Adversary Proceeding.

Bankruptcy jurisdiction extends to four types of proceedings: (1) cases under Title 11; (2)
proceedings arising under Title 11; (3) proceedings arising in a bankruptcy case; and (4)
proceedings related to a bankruptcy case. 28 U.S.C. § 1334(b); In re Combustion Eng’g, Inc.,
391 F.3d 190, 225 (3d Cir. 2004) (citations omitted). A bankruptcy court has the power to hear,
decide and enter final orders and judgments in the first three categories of proceedings. 28
U.S.C. § 157(b)(1). However, with respect to the fourth category, “related to” proceedings, the
bankruptcy court can hear the matter, but it can only submit proposed findings of fact and
conclusions of law for de novo review by the district court. 28 U.S.C. § 157(c)(1); Halper v.
Halper, 164 F.3d 830, 836 (3d Cir. 1999); In re Millennium Lab Holdings II, LLC, 575 B.R. 252,

261 (Bankr. D. Del. 2017).
In the Third Circuit, courts follow a two-step test to determine whether or not a claim is a
core proceeding. First, the Court considers whether the claim falls under the “illustrative list” in
28 U.S.C. § 157(b); Halper, 164 F.3d at 836. Secondly, a core proceeding is one that either
invokes a substantive right provided by the Bankruptcy Code or is a proceeding that, by its
nature, could arise only in the context of a bankruptcy case. Artesanias Hacienda Real S.A. DE
that an individual injured by a willful violation of the automatic stay imposed by a bankruptcy
filing may recover certain damages. Since Count I alleges a violation of the automatic stay, it is a
core proceeding in that it invokes a substantive right provided by the Bankruptcy Code. Further,
it is the type of claim that could only arise in a bankruptcy proceeding. To the extent the Motion
questions the jurisdiction of the Court with respect to Count I, it is denied.
The automatic stay is one of the fundamental protections provided to debtors when they
file for bankruptcy. As noted above, a willful violation of the automatic stay provides a cause of
action for an award of damages. In re Aleckna, 543 B.R. 717, 720 (Bankr. M.D. Pa. 2016).

The Motion also alleges that the Complaint fails to state a claim upon which relief can be
granted. See Fed. R. Civ. P. 12(b)(6). Federal Rule of Bankruptcy Procedure 7012(b) makes
Federal Rule of Civil Procedure 12(b)(6) applicable to adversary proceedings. To withstand a
Rule 7012(b)(6) motion, a complaint must plead a plausible claim for relief. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 1966 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678,
129 S. Ct. 1937, 1949-50 (2009). In considering the Motion, the alleged facts are viewed in the
light most favorable to Ross. In contrast, pled legal conclusions are not assumed to be correct at
this stage. Id. at 678-79.
The instant Complaint is rather vague as to what action by Kristy allegedly violated the

automatic stay. Paragraph 36 of the Complaint states, “[t]o date, Merring [Kristy] has not
turnover [sic] over [sic] the expensive king size bedroom set with sentimental value to Debtor
[Ross], despite demand.” 5-19-ap-00099-RNO, ECF No. 1. Ross has not plausibly pled a claim
for a violation of the automatic stay. General assertions of his ownership of items of personal

2 Unless otherwise noted, all future statutory references are to the Bankruptcy Code, 11 U.S.C.§ 101, et seq.,
as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119
as a legal conclusion for which factual context must be pled in order state a plausible claim.
Developing case law in the Third Circuit calls into question whether or not maintaining
passive possession of property which a third party took into possession pre-petition violates the
automatic stay. Recently, the Third Circuit considered whether a creditor’s retention of a vehicle
which it repossessed pre-petition was a violation of the automatic stay. A Third Circuit panel
found that passive retention of a vehicle did not qualify as an act to exercise control over
property of the estate. The court noted that retention of the subject vehicle maintained the status
quo between the subject debtor and his creditors. It therefore affirmed the District Court’s denial

of the debtor’s requested sanctions for an alleged automatic stay violation. In re Denby-Peterson,
941 F.3d 115, 126 (3d Cir. 2019). Similarly, the subject Complaint fails to allege sufficient facts
to support the pled conclusion that Kristy violated the automatic stay.
The Motion to Dismiss Count I of the Complaint is granted for failure to state a claim
upon which relief can be granted. Since this is the original Complaint, the Court is loath to find
that allowing for amendment would be futile. Therefore, Ross is granted leave of twenty-one
days to file an amended complaint as to Count I only.
B. Count II – Fraudulent Inducement
Count II of the Complaint alleges that Kristy failed to pay Soon Ja $25,000.00 from the

proceeds of the sale of Ross and Kristy’s former marital residence. Judicial notice is taken that
on April 9, 2019, the Court entered an Amended Order approving the Chapter 7 Trustee’s sale of
the subject real property. 5-17-bk-02119-RNO, ECF No. 251. The Court Order provides for the
payment of certain claims; conspicuously absent is any provision for a payment to Soon Ja.
The Complaint does allege that Ross’ attorney offered to Kristy’s attorney that the sale
settlement be conditioned upon the agreement that Kristy pay Soon Ja $25,000.00, from the sale
proceeds. It is further alleged that Kristy’s attorney accepted the offer on her behalf. 5-19-ap-
“despite demand.” 5-19-ap-00099-RNO, ECF No. 1, ¶ 47. The Complaint further alleges that
Kristy intentionally misrepresented to Soon Ja that $25,000.00 would be repaid from the sale of
the former marital residence. 5-19-ap-00099-RNO, ECF No. 1, ¶ 49.
During the January 16, 2020, oral argument regarding the Motion, the Court sua sponte
raised the question of abstention. Jurisdiction has already been retained for Count I, which
alleges a violation of the automatic stay.
The primary bankruptcy jurisdictional statute provides that a court may abstain from
hearing certain controversies. It further provides that a bankruptcy court must abstain from

hearing certain controversies. 28 U.S.C. § 1334(c)(1) and (2). Such dispositions are frequently
referred to as “permissive abstention” and “mandatory abstention.”
Mandatory abstention is required where:
(1) the proceeding is based on a state law claim or cause of action;
(2) the claim or cause of action is related to a case under title 11,
but does not arise under title 11 and does not arise in a case under
title 11, (3) federal courts would not have jurisdiction over the
claim but for its relation to a bankruptcy case; (4) an action is
commenced in a state forum of appropriate jurisdiction; and (5) the
action can be timely adjudicated in a state forum of appropriate
jurisdiction.

Stoe v. Flaherty, 436 F.3d 209, 213 (3d Cir. 2006) (internal quotation marks omitted); In re G-I
Holdings, Inc., 2017 WL 1788656, at *5 (D.N.J., May 5, 2017). Count II of the Complaint
appears to allege either breach of contract or, possibly, common law fraud. In either event, the
claim would be based upon Pennsylvania state law.
Count II is not a claim based upon a provision of the Bankruptcy Code. Neither is Count
II the type of claim that could only arise within the context of a bankruptcy proceeding.
Contrastingly, an action for alleged violation of the automatic stay or an objection to a proof of
claim are the types of matters that could only be brought in a bankruptcy proceeding.
illustration, 28 U.S.C. § 1332(a) provides for federal court jurisdiction where there is complete
diversity of citizenship between the opposing parties in the litigation. GBForefront, L.P. v.
Forefront Management Group, LLC, 888 F.3d 29, 34 (3d Cir. 2018). No such diversity of
citizenship has been pled in this case. Further, Count II is not based upon any federal statute. The
Court recognizes that bankruptcy “related to” jurisdiction is quite broad. “Related to”
proceedings are matters that could conceivably have an effect upon the bankruptcy estate being
administered. In re Exide Technologies, 544 F.3d 196, 206 (3d Cir. 2008); In re Federal-Mogul
Global, Inc., 300 F.3d 368, 381 (3d Cir. 2002). Count II, again, is a state law claim brought by

Soon Ja, a non-debtor. I take judicial notice that Soon Ja and a John Roggio filed Proofs of Claim
Nos. 11 and 12 in the underlying Chapter 7 case. Arguably, resolution of Count II might affect
the allowability of one or both of those claims. In any event, at best, the only basis for federal
court jurisdiction would be a claim which is related to Ross’ underlying Chapter 7 case. This
would be a non-core claim.
The record does not establish that an action based upon Count II has been commenced in
a state court forum of appropriate jurisdiction. Since this required element for mandatory
abstention has not been satisfied, consideration will now be given to permissive abstention as to
Count II.

Twelve factors are considered in determining whether permissive abstention is
appropriate.
(1) the effect or lack thereof on the efficient administration of the
estate if a Court recommends abstention, (2) the extent to which
state law issues predominate over bankruptcy issues, (3) the
difficulty or unsettled nature of the applicable state law, (4) the
presence of a related proceeding commenced in state court or other
non-bankruptcy court, (5) the jurisdictional basis, if any, other than
28 U.S.C. § 1334, (6) the degree of relatedness or remoteness of
the proceeding to the main bankruptcy case, (7) the substance
rather than the form of an asserted “core” proceeding, (8) the
feasibility of severing state law claims from core bankruptcy
court’s] docket, (10) the likelihood that the commencement of the
proceeding in a bankruptcy court involves forum shopping by one
of the parties, (11) the existence of a right to a jury trial, and (12)
the presence in the proceeding of non-debtor parties.

In re Castle Cheese, Inc., 541 B.R. 586, 592 (Bankr. W.D. Pa. 2015) (citations omitted); In re
Kessler, 430 B.R. 155, 165-66 (Bankr. M.D. Pa. 2010) (citations omitted).
The first factor considers the effect, or lack of effect, on the efficient administration of
the estate. As noted above, Count II has, at best, a potential tangential effect upon the
administration of the estate to the extent it may affect Soon Ja’s proofs of claim. It is difficult to
see how Soon Ja’s recovery from Kristy could reduce her claims against Ross’ bankruptcy estate.
This factor is neutral concerning permissive abstention.
The second factor asks whether state laws predominate over bankruptcy issues. Again,
Count II is either a contract claim, or a common law claim. In either event, the basis for the
decision on such claims would be Pennsylvania state law. There is essentially a complete
absence of bankruptcy law issues. This factor weighs in favor of permissive abstention.
The next factor is the difficulty or unsettled nature of applicable law. The Court
concludes that the Commonwealth of Pennsylvania has established common law concerning
breach of contract and common law fraud claims. TruServ Corp. v. Morgan’s Tool & Supply Co.,
Inc., 614 Pa. 549, 566-67, 39 A.3d 253, 263 (2012) (in part, discussing a claim for pre-judgment
interest for breach of contract); Boehm v. Riversource Life Ins. Co., 117 A.3d 308, 322 (Pa.
Super. 2015) (common law fraud must be proven by clear and convincing evidence). This factor
weighs slightly against permissive abstention.
The record does not establish that there is a pending proceeding in state court concerning
the claim advanced in Count II of the Complaint. This factor weighs against permissive
abstention.
jurisdictional statute, has already been extensively discussed. There is no other independent basis
for federal court jurisdiction. This factor weighs strongly in favor of permissive abstention.
The next factor asks that the Court consider the relatedness or remoteness of the
proceeding to the main bankruptcy case. Resolution of Count II, as already discussed, may
conceivably have some impact with respect to Soon Ja’s claim against the Chapter 7 estate.
However, the Court concludes that resolution of the claim, which will be decided solely under
state law, has relatively little relatedness to the main bankruptcy case. This factor is neutral with
respect to permissive abstention.

The next factor asks whether an asserted core proceeding is, in fact, “core.” Here, the
Complaint itself states “[c]ount II is not a core proceeding, but is related to a case under title 11
and a core proceeding.” 5-19-bk-00099-RNO, ECF No. 1, ¶ 52. It is difficult for the Court to
construe the true meaning of paragraph 52 of the Complaint; it appears to be contradictory. At
best, paragraph 52 is ambiguous. In any event, legal conclusions are not assumed to be true at
this stage of the proceedings. The Court concludes that this is not a core proceeding. This factor
weighs in favor of permissive abstention.
The next factor is the feasibility of severing state law claims from core bankruptcy
matters to allow judgments to be entered in state court with enforcement left to the Bankruptcy

Court. Count II is not a proceeding brought by the Chapter 7 Trustee. In fact, it appears that the
real party in interest is Soon Ja, a non-debtor who is pursuing a state law claim against another
non-debtor, Kristy. Any recovery by Soon Ja will not directly augment the estate. Having already
found that there are no core bankruptcy matters relative to Count II, the Court concludes that
severance is infeasible. This factor weighs in favor of permissive abstention.
Next, the Court considers the burden on the Court’s docket in retaining Count II. This
factor is neutral on the question of permissive abstention.
involves forum shopping by one of the parties. To the extent that Ross is a party plaintiff in the
Adversary Proceeding, the Court has some concern that Count II may have been filed in the
Bankruptcy Court to obtain some “home court advantage.” This factor weighs slightly in favor of
permissive abstention.
The next factor is the existence of a right to a jury trial. The Court will assume that there
would be no right to a jury trial concerning the claim advanced in Count II. This factor weighs
against permissive abstention.
The next factor for permissive abstention asks the Court to consider the presence of non-

debtor parties. While Ross is included in the wherefore clause to Count II of the Complaint, the
Court finds that the claim is really an action by Soon Ja, a non-debtor, against Kristy, a non-
debtor. This factor weighs strongly in favor of permissive abstention.
The twelve permission abstention factors should be applied flexibly because their
relevance and significance will vary depending upon the circumstance of each case. Thus, no one
factor is necessarily determinative. Matter of Chicago, Milwaukee, St. Paul & Pacific R. Co., 6
F.3d 1184, 1189 (7th Cir. 1993). In exercising its discretion to permissively abstain, a court
should be guided by what will best assure an economical and expeditious administration of the
debtor’s estate. In re Yobe, 75 B.R. 873, 876 (Bankr. W.D. Pa. 1987) (citations omitted). It has

been held that consideration of the permissive abstention factors should not be a mere counting
exercise. Factors such as the effect on the administration of the estate, whether the claim
involves only state law issues, and whether the proceeding is core or non-core have been held to
be more substantial factors. In re Fruit of the Loom, Inc., 407 B.R. 593, 600 (Bankr. D. Del.
2009) (citations omitted).
Giving due consideration and appropriate weight to each of the permissive abstention
factors, the Court concludes that it is appropriate to permissively abstain from hearing Count II
Count II of the Complaint.
C. Count III – Misappropriation
Count III of the Complaint is markedly similar to Count II. Essentially, it alleges that
Kristy wrongfully appropriated the $25,000.00 allegedly provided by Soon Ja. Count III also
contains the following paragraph, which was also included in Count II, and is self-contradicting.
Namely, “[c]ount III is not a core proceeding, but is related to a case under title 11 and a core
proceeding.” 5-19-ap-00099-RNO, ECF No. 1, ¶ 56.
A weighted application of the twelve factors for permissive abstention leads the Court to

conclude that it should permissively abstain from hearing Count III of the Complaint. Some of
the factors considered include: (1) the claim may possibly have only a tangential effect on the
administration of the underlying Chapter 7 case; (2) state law issues clearly predominate over
bankruptcy issues; (3) this is a non-core proceeding in that it is not a claim based upon a
provision of the Bankruptcy Code nor is it the type of claim that only could arise within a
bankruptcy case; (4) there is no independent basis for federal jurisdiction, other than 28 U.S.C.
§ 1334, the bankruptcy jurisdictional statute; (5) it is not feasible to sever the state law claims
from core bankruptcy matters because Count III only implicates state law; (6) the filing of the
Count III claim in Bankruptcy Court suggests forum shopping by Ross; (7) the Co-Plaintiff,

Soon Ja, is a non-debtor, and the Defendant, Kristy, is a non-debtor.
The judgment will include that the Court will permissively abstain from hearing Count III
of the Complaint.
D. Count IV – Conversion
Count IV alleges that Kristy removed some of Ross’ non-marital property from the
marital residence and has converted the non-marital property to her own use. It is alleged that the
non-marital property has a value of $15,000.00. 5-19-ap-00099-RNO, ECF No. 1, ¶¶ 59-60.
11 and a core proceeding.” 5-19-ap-00099-RNO, ECF No. 1, ¶ 62. The discussion of Count III
included a summary review of permissive abstention factors which were considered and weighed
in reviewing that Count. Each of those seven factors also weigh in favor of permissive abstention
with respect to Count IV.
Another factor which a court may consider concerning permissive abstention is the
presence of a related proceeding commenced in state court or other non-bankruptcy court. In re
Castle Cheese, Inc., 541 B.R. at 592. The State Court Proceedings between Ross and Kristy are
still pending in the Court of Common Pleas of Monroe County. The Complaint describes the

State Court Proceedings as “domestic litigation.” 5-19-ap-00099-RNO, ECF No. 1, ¶ 8.
Count IV raises issues of Pennsylvania state law. First, whether the action complained of
constituted the tort of conversion. L.B. Foster Co. v. Charles Caracciolo Steel & Metal Yard,
Inc., 777 A.2d 1090, 1095 (Pa. Super. 2001). Count IV also raises an issue as to the definition of
non-marital property between Ross and Kristy.
In Pennsylvania, marital property generally includes property acquired by either party
during the marriage; it does not include property acquired after separation. 23 Pa. C.S.A.
§ 3501(a); Diamond v. Diamond, 519 A.2d 1012, 1014 (Pa. Super. 1987). It is not uncommon for
state courts, in divorce actions, to determine whether or not an asset is marital property. Drake v.

Drake, 725 A.2d 717, 722-23 (Pa. 1999); Yuhas v. Yuhas, 79 A.3d 700, 706 (Pa. Super. 2013).
A bankruptcy court is not a family law court. Also, it is important to maintain comity
between federal and state courts.
The Fourth Circuit has written that equitable distribution disputes are a “category of cases
in which state courts have special expertise and for which federal courts owe significant
deference.” In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992) (citations omitted); also see In re
Lemoine, 2012 WL 5906939, at *3 (Bankr. E.D. Pa., Nov. 26, 2012). When considering
courts will often abstain.”
The existence of the State Court Proceedings is an additional factor which strongly
weighs in favor of permissive abstention. The judgment will include that the Court will abstain
from hearing Count IV of the Complaint.
E. Count V – Injunctive Relief
Count V requests injunctive relief seeking to enjoin Kristy “from further dissipating the
proceeds of the Marital Residence and Debtor’s [Ross’] non-marital property.” 5-19-ap-00099-
RNO, ECF No. 1, ¶ 65. Consideration of the same factors which were considered in reviewing

Counts III and IV apply with equal force to Count V of the Complaint.
The Complaint characterizes Count V as a core proceeding. 5-19-ap-00099-RNO, ECF
No. 1, ¶ 72. However, injunctive relief is sought in many judicial forums, federal and state. As
with all of the other counts, save Count I, the issues raised by Count V would all be considered
by the application of state law. The effect of the contemplated action on the underlying Chapter 7
administration will be minimal. The State Court Proceedings provide a readily available forum
for Ross to seek injunctive relief.
The judgment will include that the Court will permissively abstain from hearing Count V
of the Complaint.

F. Soon Ja as a Party Plaintiff
The Court has retained jurisdiction over only Count I which alleges a violation of the
automatic stay. The Motion alleges that Soon Ja is not a proper party plaintiff.
The automatic stay is a hallmark of bankruptcy protection. The stay is also, essentially,
personal to the debtor. The automatic stay cannot be invoked by sureties, co-obligors, or others
with a similar nexus to the debtor. McCartney v. Integra Nat’l Bank North, 106 F.3d 506, 509-10
(3d Cir. 1997); Maritime Elect. Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1205 (3d Cir.
400, 415-16 (Bankr. D. Del. 2009) (the automatic stay may be extended to non-debtor third
parties only if “unusual circumstances” are present). The Complaint has not pled any unusual
circumstances in this case which would justify extending the automatic stay to Soon Ja. Further,
the only type of bankruptcy filing which confers a co-debtor automatic stay is a case under
Chapter 13. 11 U.S.C. § 1301; In re Gronczewski, 444 B.R. 526, 530 (Bankr. E.D. Pa. 2011).
Ross’ bankruptcy case was converted to a case under Chapter 7 on December 10, 2018.
Federal Rule of Civil Procedure 21 is made applicable to bankruptcy adversary
proceedings pursuant to Federal Rule of Bankruptcy Procedure 7021. The Rule provides, in part,

“[o]n motion or on its own, the court may at any time, on just terms, add or drop a party.”
Whether or not a party, like Soon Ja, may be dropped depends upon whether or not she is
“indispensable” to the action. Further, a court should consider whether dropping a party would
be prejudicial to the remaining parties in the action. Aetna Life Insurance Company v.
Foundation Surgery Affiliates, LLC, 358 F. Supp. 3d 426, 437 (E.D. Pa. 2018).
An indispensable or necessary party is one who, “in that person’s absence, the court
cannot accord complete relief among existing parties.” Fed. R. Bankr. P. 7019(a)(1)(A). A court
has discretion to choose between severance of a party or dismissal to remedy misjoinder.
DirecTV, Inc. v. Leto, 467 F.3d 842, 846 (3d Cir. 2006); Russell v. Chesapeake Appalachia,

L.L.C., 205 F.R.D. 78, 81 (M.D. Pa. 2015) (“[t]he Court enjoys broad discretion in deciding Rule
21 motions and may take into consideration ‘the convenience of the parties, avoidance of
prejudice to either party, and promotion of the expeditious resolution of the litigation.’”).
Misjoinder is present when one of the plaintiffs does not seek any relief against the defendant
and is without any real interest in the controversy. Evonik Degussa GmbH v. Materia, Inc., 2013
WL 5488519, at *2 (D. Del., Sept. 30, 2013) (court dropped two third-party plaintiffs).
The Court has already found that no automatic stay prohibits actions against Soon Ja or
her property. A corollary of this proposition is that she cannot advance a claim under § 362(k)
for an alleged violation of the automatic stay. In re Siskin, 231 B.R. 514, 519 (Bankr. E.D.N.Y.
1999) (wife of Chapter 7 debtor lacked standing to bring claim for alleged violation of the
automatic stay).
Count I fails to show that Soon Ja holds a claim against Kristy for an alleged stay
violation. The judgment will include that Soon Ja is dropped as a party plaintiff in this Adversary
Proceeding. In re Palmiter, 291 B.R. 208, 217 (Bankr. M.D. Pa. 2018).
No leave to amend concerning Soon Ja’s non-party status is granted. Because of the clear
absence of any automatic stay as to Soon Ja, any amendment would be futile. Burlington Coat
Factory Securities Litigation, 114 F.3d 1410, 1434 (3d Cir. 1997); In re Sobol, 545 B.R. 477,
491 (Bankr. M.D. Pa. 2016); In re Vertis Holdings, Inc.536 B.R. 589, 608 (Bankr. D. Del. 2015).
IV. Conclusion
The Motion will be granted for failure to state a claim upon which relief can be granted
as to Count I, and Ross will be allowed leave of twenty-one days to file an amended, conforming
complaint. The Court will permissively abstain from hearing Counts II through V, inclusive, of
the Complaint. No leave to amend will be granted with respect to Counts II through V. The
judgment will drop Soon Ja as a party plaintiff. No leave to amend will be granted in this regard.
Dated: February 28, 2020 By the Court,
□□□ VU. QptF

15

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10461902. Public record. Not legal advice.