United States District Court, D. Nebraska
M. Gerrard Chief United States District Judge
matter is before the Court on its own motion. This is an
interpleader case, in which the plaintiff United of Omaha
Life Insurance Company represents that there is a dispute
among ACass Systems, LLC; BizCapital BIDCO I, LLC; and
Colleen Cass regarding the proceeds of a life insurance
policy. See filing 1. The Court's questions
relate to ACass Systems' pending bankruptcy proceeding.
See filing 1 at 1.
Court's rules are clear: when "a party to a civil
case is a debtor in a bankruptcy case, the court issues an
order staying further proceedings in the case as to the party
in bankruptcy. The case may proceed as to any parties not in
bankruptcy." NEGenR 1.5(a)(1). But, because the
complaint doesn't describe the defendants' dispute in
detail, and the defendants have not filed responsive
pleadings themselves, the Court isn't sure what staying
the case simply as to ACass Systems would mean.
that, it's also true that because the automatic
bankruptcy stay of 11 U.S.C. § 362(a)(1) applies to the
"commencement or continuation" of a proceeding
"against the debtor," it doesn't apply to a
proceeding brought by the debtor that inures to the benefit
of the debtor's estate. Farley v. Henson, 2 F.3d
273, 274 (8th Cir. 1993); Brown v. Armstrong, 949
F.2d 1007, 1009-10 (8th Cir. 1991); Wickenkamp v.
Smith, No. 8:13-CV-262, 2013 WL 6197158, at *1 (D. Neb.
Nov. 27, 2013); see E3 Biofuels, LLC v.
Biothane, LLC, 6 F.Supp.3d 993, 1003 (D. Neb. 2014),
aff'd, 781 F.3d 972 (8th Cir. 2015) (citing
Victor Foods, Inc. v. Crossroads Econ. Dev. of St.
Charles Cty., Inc., 977 F.2d 1224, 1227 (8th Cir.
1992)). While ACass Systems is a "defendant" at the
moment, that doesn't mean much in an interpleader
case-and it may be that ACass Systems, represented by the
bankruptcy trustee, is really the natural plaintiff. But
again, the Court doesn't know enough about the underlying
claims to say.
perhaps most significantly, without knowing more about the
underlying claims, the Court can't tell whether this case
should be here, or should be referred to the bankruptcy
court. For instance, it's possible (given what little the
Court knows about the timing of the decedent's attempted
beneficiary change, and ACass Systems' bankruptcy) that
the parties' claims arise under Title 11 of the United
States Code, or have arisen in a Title 11 case, or are
related to a case under Title 11-meaning that this
Court's rules refer them to the bankruptcy court. NEGenR
1.5(a); see 28 U.S.C. § 157. It's also
possible that this case presents so-called Stern
claims, which should be heard by the bankruptcy court and
decided by this Court on the bankruptcy judge's findings
and recommendation (unless the parties consent to disposition
by the bankruptcy court). See Exec. Benefits
Ins. Agency v. Arkison, 573 U.S. 25, 35-38 (2014)
(citing Stern v. Marshall, 564 U.S. 462 (2011));
see also Wellness Int'l Network, Ltd. v.
Sharif, 135 S.Ct. 1932, 1944-45 (2015).
short: at this preliminary stage of the case, the Court
doesn't know what's going on, and so cannot determine
whether a bankruptcy stay is required or reference to
bankruptcy court is appropriate. Accordingly, the Court will
ask the parties to inform it.
ORDERED that on or before June 28, 2019, each party shall
file a notice of its position (including facts and legal
authority) on (1) whether this case should be stayed as to
ACass Systems, and (2) whether this case should be referred
to bankruptcy court.
 The Court has noted that these
funds-and the dispute over them-was the subject of some
filings on the bankruptcy docket, and even the subject of a
short-lived (and perhaps mistakenly filed?) adversary
proceeding. But they provide little clarity, and the Court
does not feel obliged to scour a lengthy bankruptcy court
docket sniffing for truffles.
The Court also notes that under its
rules, "[i]f any party files a motion requesting
referral of the case to the bankruptcy court, the case is
referred to the bankruptcy court for further ...