IN RE: Keefer

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

BRETTON KEEFER and )

AFSOON HAGH, )

)

Appellants, )

) Case No. 3:23-cv-00961

v. ) Bankr. Case No. 3:19-bk-07235

) Adv. Pro. No. 3:23-ap-90036

BRIAN CUMMINGS and CUMMINGS )

MANOOKIAN, PLLC, ) Judge Aleta A. Trauger

)

Appellees. )

MEMORANDUM and ORDER

Before the Court is the Notice of Appeal and Statement of Election filed by

defendants/appellants Bretton Keefer and Afsoon Hagh. (Adv. Pro. No. 21; Doc. No. 1.)1 The

appellants have filed a Statement of Issues on Appeal and Designation of the Record and an

Opening Brief. (Doc. Nos. 5, 12.)2 The appellants appeal from the Bankruptcy Court’s September

5, 2023 Order Denying Motion to Dismiss (“September 2023 Order”). (Adv. Pro. No. 20.) They

also request oral argument. Trustee Jeanne Ann Burton, on behalf of the debtor, Cummings

1 Citations to “Doc. No.” refer to the docket number of filings made in the case in this

court. Citations to “Bankr. No.” are to the lead bankruptcy court docket in the underlying

bankruptcy case (“Bankruptcy Case”), In re Cummings Manookian, PLLC, Case No. 3:19-bk-

07235 (Bankr. M.D. Tenn.). Citations to “Adv. Pro. No.” are to filings in the subject adversary

proceeding (“Adversary Proceeding”), Cummings v. Keefer et al., Adv. Pro. No. 33:23-ap-90036

(Bankr. M.D. Tenn.).

2 The appellants have designated not only the record of the underlying adversary

proceeding, but the entirety of the record in the Bankruptcy Case. (See Doc. No. 5, at 2.) They

inexplicably appear to have filed in this court copies of all or most of the filings in the Bankruptcy

Case.

Manookian, PLLC (“Debtor”),3 and plaintiff/appellee Brian Cummings have each filed a response

Brief (Doc. Nos. 13, 14), and the appellants filed a Reply (Doc. No. 17).

The court finds that a hearing on this matter is unnecessary and, therefore, DENIES the

appellants’ request for oral argument. For the reasons that follow, the court will AFFIRM the

Bankruptcy Court’s September 2023 Order denying the Motion to Dismiss and declining to compel

arbitration.

I. BACKGROUND

While both the Bankruptcy Case and the Adversary Proceeding that is the source of the

present appeal have lengthy and complex histories, it suffices for present purposes to explain that,

on November 6, 2019, the Debtor, a law firm formerly owned and operated by attorneys Brian

Cummings and Brian Manookian, filed a Chapter 7 Voluntary Petition in the Bankruptcy Court,

which was assigned to Bankruptcy Court Judge Charles M. Walker. (Bankr. No. 1.) Trustee Jeanne

Ann Burton was appointed to serve as the Chapter 7 Trustee for the Debtor on the same day and

continues to serve in that capacity. Appellee Afsoon Hagh, wife of Brian Manookian, was also an

attorney at the Debtor’s firm. Brian Cummings had withdrawn from the Debtor law firm sometime

before the events unfolded that led to the bankruptcy filing. (Adv. Pro. No. 1-1, at 17–18.)

In March 2022, Cummings filed a lawsuit in the Circuit Court for Davidson County,

Tennessee, against Bretton Keefer and Jeanne Burton in her capacity as Trustee. (Adv. Pro. No. 1-

1, at 1.) Afsoon Hagh was added as a defendant in the Amended Complaint filed shortly thereafter.

(Id. at 17.) In this lawsuit, Cummings seeks attorney’s fees allegedly owed to him for work

performed for Keefer, his former client, on a case in which Cummings and Hagh jointly

3 The Debtor’s correct name is apparently Cummings Manookian, PLC. It was named

incorrectly as Cummings Manookian, PLLC in the bankruptcy Petition.

represented him, both while they were lawyers at the Debtor law firm and after Cummings left the

firm. In the Amended Complaint, Cummings specifically avers that the Trustee for the Debtor law

firm is “a proper party” because at least a small percentage of the work Cummings and Hagh

performed for Keefer occurred while they were still working for the Debtor law firm. (Id. at 18–

19.)

Cummings alleges that he involuntarily withdrew from representing Keefer in the

underlying case after being told by the Tennessee Board of Professional Responsibility that he had

no choice but to withdraw, in light of statements made to him by both Hagh and Keefer. He filed

a Notice of Attorney’s Lien in the underlying case shortly thereafter, notice of which Keefer and

Hagh would have received within days of its filing. (Id. at 21.) Cummings further alleges that the

underlying case settled for an undisclosed amount approximately one year later, and all parties

agreed to the distribution of proceeds to the plaintiff, Bretton Keefer, and to a distribution of fees

to another attorney who entered an appearance after Cummings withdrew. (Id. at 21, 24–25.) The

remaining balance of the settlement is being held in an escrow account pending a judicial

determination as to the division of the fees among Afsoon Hagh, Brian Cummings, and the Debtor

law firm.4 (Id. at 24.)

After Cummings filed suit in state court, the Trustee removed the matter to federal court,

on the basis that the “Trustee is being sued in her capacity as the bankruptcy trustee for Cummings

Manookian, PLLC; moreover, there is a pending adversary proceeding before the United States

Bankruptcy Court for the Middle District of Tennessee involving the Trustee, as plaintiff, and

4 It is unclear to the court what remaining interest in this case Keefer has, since he appears

to have received all funds to which he is entitled and has no inherent interest in how the attorney’s

fees being held in escrow are divided among the other interested parties. (See Adv. Pro. No. 1-1,

at 24 ¶ 24 (“At this point, the amount of money determined to be provided to Mr. Cummings . . .

does not change the amount of net proceeds to Mr. Keefer . . . .”).)

Afsoon Hagh, as defendant, to determine the rights to these same disputed fees (Adv. Proc. No.

20-ap-90002).” At the same time, the Trustee filed a Motion to Refer Case to Bankruptcy Court.

See Cummings v. Keefer, No. 3:22-cv-00301 (M.D. Tenn. April 26, 2022) (Notice of Removal,

Doc. No. 1 ¶ 2; Motion, Doc. No. 2). After Hagh and Keefer were finally served with process

(apparently another saga on its own), the Motion to Refer was granted as unopposed, and the

Adversary Proceeding was opened in the Bankruptcy Court.

Shortly after the referral, Keefer and Hagh filed their Motion to Dismiss or, In the

Alternative to Stay Pending Mediation and Arbitration in the Bankruptcy Court, invoking both

Rule 12(b)(1) and 12(b)(6). Their motion argues that the Bankruptcy Court lacks jurisdiction to

consider the case before it, because Cummings and the Debtor law firm entered into binding and

enforceable arbitration agreements and covenants not to sue that apply to the claims raised in the

Adversary Proceeding. (Adv. Pro. No. 9.) Keefer and Hagh asked the Bankruptcy Court to either

“dismiss Mr. Cummings’ Complaint with prejudice” in light of the “broad covenant-not-to-sue

and mediation-arbitration clauses” or, alternatively, to stay the action and compel arbitration.

(Adv. Pro. No. 9, at 4.)

In response, Cummings argued that (1) the Bankruptcy Court has exclusive jurisdiction

over the claims raised in the Adversary Proceeding, as both Cummings and the Trustee have filed

claims for a portion of the attorney’s fees generated by the underlying lawsuit that are now being

held in escrow; (2) there is no arbitration agreement between Cummings and Hagh, as a result of

which it would not be appropriate to compel Cummings to litigate his claims against Hagh; and

(3) Keefer (and Hagh, assuming she is a party to the arbitration agreement) waived the right to

seek to enforce arbitration by waiting too long to invoke that right. (Adv. Pro. No. 12.)

The Bankruptcy Court held a hearing on the matter and, at the close of the hearing, denied

the motion from the bench on the basis that (1) there is no arbitration agreement between

Cummings and Hagh, and (2) the factors to be considered by a bankruptcy court in determining

whether to compel or deny arbitration weigh in favor of denying arbitration, as it would frustrate

the purpose of the Bankruptcy Code and the Bankruptcy Court’s ability to retain jurisdiction over

the bankruptcy process. (Transcript, Adv. Proc. No. 14, at 23–24.) The Bankruptcy Court did not

reach the question of waiver. The written September 2023 Order incorporated the findings and

conclusions stated at the hearing. (Adv. Pro. No. 20.) This appeal followed.

II. LEGAL STANDARD

Under 28 U.S.C. § 158, a district court has jurisdiction to hear a timely appeal as a matter

of right from final orders or decrees issued by a bankruptcy court and, “with leave of court,” from

interlocutory orders. 28 U.S.C. § 158(a)(1), (a)(3). An order denying a motion to dismiss is not a

final order, because it does not terminate the proceeding. See In re Jackson Masonry, LLC, 906

F.3d 494, 497–98, 500 (6th Cir. 2018), aff’d sub nom. Ritzen Grp., Inc. v. Jackson Masonry, LLC,

589 U.S. 35 (2020).5 Thus, ordinarily, leave of court would be required in order for appellants to

appeal the denial of a motion to dismiss.

At the same time, however, the denial of a motion to compel arbitration is ordinarily

immediately appealable. 9 U.S.C. § 16(a)(1). The Bankruptcy Court, although it styled the

September 2023 Order as “Order Denying Motion to Dismiss,” apparently construed the motion

5 The Supreme Court in Ritzen Group held that a bankruptcy court’s order “unreservedly”

granting or denying a creditor’s motion for relief from the automatic stay constitutes a final,

immediately appealable order under § 158(a). Ritzen Grp., 589 U.S. at 37–38. Notably, a motion

for relief from an automatic stay is a discrete dispute initiated within a bankruptcy case. See Fed.

R. Bankr. P. 4001(a)(1). An adversary proceeding is a different type of discrete dispute initiated

within a bankruptcy case. See Fed. R. Bankr. P. 7001.

as seeking to compel arbitration. Under these circumstances, and given the strong federal policies

favoring arbitration, see Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24

(1985), the court finds that the September 2023 Order is immediately appealable under § 16. Even

if it were not, the fact that it concerns arbitration would be sufficient to warrant granting a motion

for leave to take an interlocutory appeal.

III. MERITS OF THE APPEAL

The appellants argue that a de novo standard of review applies to the Bankruptcy Court’s

legal conclusions made in ruling on a “core proceeding.” (Doc. No. 12, at 9.) The Trustee and

Cummings argue that the decision to compel or deny arbitration is within the discretion of the

bankruptcy judge and that this court’s review is limited to a determination of whether the

Bankruptcy Court abused that discretion. (Doc. No. 13, at 12; Doc. No. 14, at 5.)

The Sixth Circuit does not appear to have directly addressed this question following the

Supreme Court’s ruling in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987),

and the district court cases within the Sixth Circuit are not unified in their approach to the question.

Generally, however, courts appear to agree that—

Where the dispute is a non-core proceeding, a court is generally without discretion

to preclude the enforcement of the arbitration provision and the inquiry ends. If,

however, the dispute is a core proceeding, the court moves to the next step in the

analysis—whether enforcement of such agreement would inherently conflict with

the underlying purposes of the Bankruptcy Code.

In re Patriot Solar Grp., LLC, 569 B.R. 451, 457–58 (Bankr. W.D. Mich. 2017) (citing In re Elec.

Mach. Enters., Inc., 479 F.3d 791, 796 (11th Cir. 2007)); see also In re Wade, 523 B.R. 594, 607

(Bankr. W.D. Tenn. 2014). That is, “even if a proceeding is determined to be a core proceeding,

the bankruptcy court must still analyze whether enforcing a valid arbitration agreement would

inherently conflict with the underlying purposes of the Bankruptcy Code.” In re Patriot Solar

Grp.,, 569 B.R. at 457 (citing Ins. Co. of N. Am. v. NGC Settlement Trust & Asbestos Claims Mgmt.

Corp. (In re National Gypsum), 118 F.3d 1056, 1067 (5th Cir. 1997)).

Cummings and the appellants presume that the proceeding at issue here is a core

proceeding; the court accepts that proposition without analysis.6 The court also finds that, under

the circumstances presented here, the Bankruptcy Court did not abuse its discretion in declining to

compel arbitration. As set forth in his ruling from the bench, the Bankruptcy Judge considered

numerous factors relevant to the determination and found that they weighed in favor of the

Bankruptcy Court’s maintaining jurisdiction over the dispute rather than referring part of it to

arbitration. He found in particular that compelling arbitration would give rise to a strong likelihood

of piecemeal litigation, particularly because there is no arbitration agreement between Cummings

and Hagh or Cummings and the Debtor, and that compelling arbitration would, therefore, have a

significant impact on the administration of the bankruptcy estate. (Id. at 24–25.)

In their briefs to this court, the appellants make no effort even to address the Bankruptcy

Judge’s findings or to argue that he abused his discretion. Instead, they continue to reiterate the

arguments they made in the Bankruptcy Court: that Cummings contracted out of the right to bring

a lawsuit and must arbitrate instead and that the arbitration provisions are sufficiently broad to

cover his dispute with Hagh and the Debtor as well. The appellants do not address the impact of

arbitration on the bankruptcy estate or point to any error on the part of the Bankruptcy Judge in

exercising his discretion.

6 Only the Trustee broaches that question directly but then asserts that, whether it is core

or non-core, the dispute is at the very least related, such that the Bankruptcy Court clearly has

jurisdiction over the matter. (Doc. No. 13, at 9–11.) But that does not answer the question. See In

re Elec. Mach. Enters., 479 F.3d at 796 (“However, whether or not the bankruptcy court has

jurisdiction, even exclusive jurisdiction, over a matter is a separate question from whether

enforcing a valid arbitration agreement would pose an inherent conflict with the underlying

purposes of the Bankruptcy Code.” (citing McMahon, 482 U.S. at 227–28)).

The court finds that the Bankruptcy Court’s decision was reasoned and well thought out. It

is clear from the record, the appellants’ arguments notwithstanding, that Cummings did not sign

any agreement with Hagh or the Debtor7 to arbitrate disputes among them, and it is not appropriate

to compel arbitration between parties who did not agree to arbitrate. Stout v. J.D. Byrider, 228 F.3d

709, 714 (6th Cir. 2000). In addition, as noted above, Keefer has little incentive to pursue either

arbitration or litigation of this dispute, given that he stands to gain or lose nothing, regardless of

how the fees are ultimately distributed. Finally, although the court is not called upon to address

this question and will not do so in detail here, the decision to decline to compel arbitration is further

bolstered by the undisputed facts in the record strongly indicating that Keefer, through his

attorney’s action (and inaction), waived any right he might otherwise have had to insist on

arbitration by sitting on that right for months, including by refusing to answer a direct question

from Cummings’ counsel in February 2022 as to whether Keefer would invoke a right to arbitrate.

(See Doc. No. 12-1, at 94–100.) Accord Schwebke v. United Wholesale Mortg. LLC, 96 F.4th 971,

974 (6th Cir. 2024) (recognizing that a party may waive an agreement to arbitrate by “tak[ing]

actions that are completely inconsistent with any reliance on an arbitration agreement”).

The appellants, in short, have provided no basis for overruling the Order denying the

Motion to Dismiss. The court finds that the Bankruptcy Court’s determination is well supported

by the record and did not amount to an abuse of discretion.

IV. CONCLUSION AND ORDER

For the reasons set forth herein, the appellants’ request for oral argument is DENIED, and

the September 5, 2023 Order Denying Motion to Dismiss entered by the United States Bankruptcy

Court for the Middle District of Tennessee in Cummings v. Keefer et al., Adv. Pro. No. 3:23-ap-

7 The Debtor, through the Trustee, has never argued to the contrary.

90036 (Bankr. M.D. Tenn.) (Adv. Pro. Doc. No. 20), is hereby AFFIRMED.

It is so ORDERED.

ALETA A. TRAUGER

United States District Judgé