PDG Los Arcos, LLC v. Adams

MEMORANDUM ^**

PDG Los Arcos, LLC (“PDG”) and National Retail Development Partners, LLC (“NRDP”) appeal the district court’s order affirming the bankruptcy court’s dismissal of their breach of contract actions against “the investors” for failure to state a claim. We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1) and we affirm.

The district court had removal jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 1452(a). Section 1334(b) confers jurisdiction over actions “related to” bankruptcy. These are actions that “could conceivably have any effect on the estate being administered in bankruptcy.” In re Fietz, 852 F.2d 455, 457 (9th Cir.1988) (emphasis deleted). If PDG and NRDP had prevailed in their breach of contract actions, the investors could have sought contribution or indemnification from Mortgages Ltd. In addition, the investors could have counterclaimed against PDG and NRDP for the unpaid principal balances on their loans, assets that the bankrupt estate was also pursuing. Either claim could have affected the assets or administration of the bankrupt estate.

On the merits, dismissal for failure to state a claim was proper. Under Arizona law, “the assignment of a contract ... cannot shift the assignor’s liabilities to the assignee, because it is a well-established rule that a party to a contract cannot relieve himself of his obligations by assigning the contract. Neither does it have the effect of creating a new liability on the part of the assignee to the other party to the contract assigned.” Grant v. Harner, 29 Ariz. 41, 239 P. 296, 296-97 (1925). See also Norton v. First Fed. Sav., 128 Ariz. 176, 624 P.2d 854, 859 (1981). The investors did not expressly assume the funding obligations of Mortgages Ltd. Nor, even were we to consider the surrounding circumstances, would we infer an assumption of funding obligations by passive investors.

The district court did not abuse its discretion by declining to withdraw the reference. Even if a party is entitled to a jury trial in a noncore proceeding, the bankruptcy court may retain jurisdiction and decide a dispositive pretrial motion such as a motion to dismiss. Sigma Micro Corp. v. Healthcentral.com (In re Healthcentral.com), 504 F.3d 775, 787-88 (9th Cir.2007).

The MP Fund Appellees request attorneys’ fees on appeal but have not filed the supporting documentation required by Ninth Circuit Rule 39 — 1.6(b). We deny the request without prejudice to refiling in compliance with the Rule.¹

AFFIRMED

** This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

1 . The MP Fund Appellees’ unopposed motion for judicial notice of the bankruptcy court docket is granted.