GENNARO D. CALABRESE, ESQ., KINDLON & SHANKS, PC, Albany, New York. Attorneys for Plaintiffs.
SCOTT D. STORM, ESQ., MURA & STORM, PLLC, Buffalo, New York, Attorneys for Defendant.
MEMORANDUM-DECISION AND ORDER
CHRISTIAN F. HUMMEL, Magistrate Judge.
Currently before the Court in this breach of contract action, filed by Kristopher Brenenstuhl and Sarah Brenenstuhl ("Plaintiffs") against Amica Mutual Insurance Company ("Defendant"), is defendant's motion to have the United States District Court for the Northern District of New York withdraw the reference of this action to the Northern District Bankruptcy Court pursuant to 28 USC § 157(d). Dkt. No. 48. Plaintiffs have opposed defendant's motion. Dkt. No. 54. For the reasons set forth below defendant's motion is granted.
I. Relevant Background
Plaintiffs' are the owners of a property located in the City of Watervliet, New York. Compl. (Dkt. No. 1 at 6-11) ¶ 2. Defendant issued a homeowners policy for the period of November 16, 2009 through November 16, 2010 to plaintiffs with plaintiffs named as insureds. Id . ¶¶ 2-3. The homeowner's policy provided coverage for the building structure and personal property contained therein. Id . ¶ 2.
On February 3, 2012, while the homeowner's policy was in full force and effect, the subject dwelling and contents were destroyed in a fire. Compl. ¶ 9. Plaintiffs' advised defendant of the fire in accordance with the terms of the homeowner's insurance policy. Id . ¶ 17. Defendant issued a disclaimer of liability and denial of coverage letter. Dkt. No. 2-3. Defendant alleges that plaintiffs, and others, burned the property in order to recover the insurance proceeds. See e.g. Dkt. Nos. 2 & 48.
Plaintiffs' commenced this action in the Supreme Court of the State of New York, Albany County. Compl.; Pet. for Removal (Dkt. No. 1 at 1-3) ¶ 1. Defendant filed a petition of removal as this Court has original jurisdiction over this action based upon complete diversity of citizenship of the parties pursuant to 28 U.S.C. § 1332(a) and this action is one which may be removed pursuant to 28 U.S.C. §1441. Pet. for Removal ¶ 2. Plaintiffs seek damages in excess of five hundred thousand dollars. Id.
On November 10, 2010 defendant filed a verified answer with counterclaims against plaintiffs. Dkt. No. 2. The counterclaims allege, inter alia,
The plaintiffs intentionally concealed or misrepresented material facts or circumstances and engaged in fraudulent conduct related to this insurance during the course of Amica Mutual Insurance Company's investigation of plaintiffs' reported loss and claim including, but not necessarily limited to, the following: having denied any involvement in causing and/or knowledge of the cause of the fire; having falsely stated and testified about their activities or connection with the fire; and the amount of the alleged damages. Fraudulent statements are included in such documentation as the plaintiffs' transcripts of their examinations under oath, proof of loss forms, and estimates of alleged damages.
Id. at 12, ¶ 45. Defendant seeks to recover for any and all expenses incurred in the investigation and evaluation of this matter plus interest. Id. at 14. Plaintiffs filed an answer to the counterclaims on November 19, 2012. Dkt. No. 5.
II. Plaintiffs' Bankruptcy Petition
On July 6, 2012, plaintiffs' filed a petition pursuant to Chapter 13 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Northern District of New York. Dkt. No. 48-5. The plaintiffs listed estimated assets between $500, 001 and $1, 000, 000. Id. at 10-13, 36. This action is listed under the category of "[o]ther personal property of any kind not already listed, itemize." Id. at 13.
Plaintiffs listed a variety of creditors, and types of creditors in the Chapter 13 petition. Dkt. No. 48-5 at 19-31. On Schedule F, creditors holding unsecured non-priority claims, plaintiffs named defendant. Id. at 19. On July 2, 2012 the attorney for the debtors, plaintiffs herein, certified that the petition had ...