1999 #1, Elliott, 1-6-99

In re: ELLIOTT V. ZIEGMANN, ET AL. (IN RE ELLIOTT), Bankr. No. 97-40901, Adversary No. 98-4027, Chapter 7

Upon the United States Trustee's motion, the Chapter 11 bankruptcy case of Kenneth E. Elliott and Marlys Havard-Elliott was converted to a Chapter 7 case on January 5, 1999. Because of that conversion and also in light of the jurisdictional issues raised in the briefs of the Ziegmanns and Mr. Bunkers, I conclude that it is in the best interest of all parties and the bankruptcy estate for this Court to abstain under 28 U.S.C. § 1334(c)(1), as applied to Bankruptcy Court through 28 U.S.C. § 157(a), from further jurisdiction over the storage tank-related counts of the Second Amended Complaint and the Third-party Complaint.

As discussed in the briefs, the South Dakota Department of Water and Natural Resources, through S.D.C.L. Ch. 34A-13, has the authority to oversee the cleanup and disbursement of clean-up funds. Any dispute among the parties, including the bankruptcy estate, over cleanup costs can be addressed through state administrative procedures or by the state courts. The Bankruptcy Court cannot render a more prompt decision nor claim a greater expertise in this area of law than can the state. The subject property is no longer necessary for a reorganization since the case has been converted to Chapter 7. The Chapter 7 Trustee can work with interested parties and the state to insure a prompt cleanup and a timely resolution of who pays for what. Therefore, an abstention from jurisdiction over the storage-tank related matters is appropriate. National Union Fire Ins. Co. v. Titan Energy, Inc. (In re Titan Energy, Inc.), 837 F.2d 325 (8th Cir. 1988) (discussion of application of § 1334(c)(1); see also In re Johnson, 115 B.R. 634, 636 (Bankr. D. Minn. 1989)(cites therein)(factors to consider when relief from stay is sought to litigate in another forum).

An order abstaining jurisdiction on the tank-related issues will be entered and the continued trial scheduled for Thursday, January 7, 1999 shall be canceled. The Court will enter a separate memorandum of decision regarding Count I of the Second Amended Complaint that was tried on November 4, 1998.