Reid v. Rodriguez

1
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF NORTH CAROLINA
GREENSBORO DIVISION
In re: 	)
)
Sharon Annette Reid, 	) 	Chapter 7
) 	Case No. 25-10566
)
Debtor. 	)
___________________________________)
)
Sharon Annette Reid, 	)
)
Plaintiff, 	)
)
v. 	) 	Adv. No. 25-02021
)
Janeth Rodriguez, 	)
)
Defendant. 	)
___________________________________)
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS ADVERSARY
PROCEEDING AND FOR ABSTENTION UNDER 28 U.S.C. § 1334
This 	adversary 	proceeding 	is 	before 	the 	Court 	on 	the 	Motion
to Dismiss Adversary Proceeding and/or for Abstention Pursuant to
28 	U.S.C. 	§ 	1334 	filed 	by 	Janeth 	Rodriguez 	(“Defendant”) 	on
December 8, 2025. 	ECF No. 4. 	For the reasons stated herein, the
SO ORDERED.
SIGNED this 20th day of January, 2026.
Case 25-02021 Doc 13 Filed 01/20/26 Page 1 of 11

2
Court 	will 	grant 	Defendant’s 	motion 	and 	dismiss 	this 	adversary
proceeding without prejudice.1
BACKGROUND
Sharon Annette Reid (“Plaintiff”) filed a voluntary petition
under 	chapter 	7 	of 	title 	11 	on 	September 	2, 	2025. 	Case 	No. 	25-
10566, 	ECF 	No. 	1. 	On 	October 	3, 	2025, 	Plaintiff 	filed 	her
Statement 	of 	Financial 	Affairs 	in 	which 	she 	listed 	a 	pending
“Eviction 	Counterclaim 	Appeal” 	as 	a 	lawsuit 	she 	was 	a 	party 	to
within 	1 	year 	before 	filing. 	Case 	No. 	25-10566, 	ECF 	No. 	18, 	at
11. 	On 	December 	8, 	2025, 	Plaintiff 	filed 	an 	amended 	exempt
property 	claim 	in 	which 	she 	claimed 	as 	exempt 	$475,000.00 	in
compensation for personal injury. 	Case No. 25-10655, ECF No. 59,
at 17.
Plaintiff 	commenced 	this 	adversary 	proceeding 	on 	October 	3,
2025. 	ECF No. 1. 	Plaintiff is proceeding pro se.2 	According to
the 	complaint, 	Defendant 	has 	been 	Plaintiff’s 	landlord 	since
February 	27, 	2025. 	Id. 	at 	3. 	Plaintiff 	seeks 	damages 	against
Defendant 	for 	breach 	of 	the 	implied 	warranty 	of 	habitability 	and
fraudulent or deceptive trade practices. 	Id. at 6.
1 Bankruptcy courts have the discretion to decide an issue without holding an
evidentiary hearing where the record is sufficient to permit the court to make
a decision. 	In re Graft, 489 B.R. 65, 72 (Bankr. S.D. Ohio 2013) (noting that
bankruptcy 	courts 	have 	broad 	discretion 	in 	determining 	whether 	a 	hearing 	is
necessary, and that “‘a hearing—much less an evidentiary hearing—is not required
in every instance’”) (quoting In re I Don't Tr., 143 F.3d 1, 3 (1st Cir. 1998)).
2 The Court must construe filings by pro se litigants liberally. 	See Haines v.
Kerner, 404 U.S. 519, 520 (1972).
Case 25-02021 Doc 13 Filed 01/20/26 Page 2 of 11

3
On December 8, 2025, Defendant filed the present motion. 	ECF
No. 	4. 	Defendant 	contends 	that 	abstention 	from 	hearing 	this
proceeding 	is 	mandatory 	under 	28 	U.S.C. 	§ 	1334(c)(2). 	Id. 	at 	2.
Alternatively, 	if 	this 	Court 	finds 	that 	abstention 	is 	not
mandatory, 	Defendant 	contends 	that 	the 	Court 	should 	permissively
abstain from hearing this proceeding under 28 U.S.C. § 1334(c)(1).
Id. 	Plaintiff 	has 	not 	responded 	to 	Defendant’s 	motion 	and 	the
time for doing so has expired. 	See Local Rule 7007-1(b).
On December 8, 2025, Defendant also filed a motion for relief
from stay to continue with a summary ejectment action in the North
Carolina 	General 	Court 	of 	Justice, 	District 	Court 	Division,
Alamance County, Case No. 25CV003885-000. 	Case No. 25-10566, ECF
No. 	61. 	In 	addition 	to 	asserting 	the 	claims 	in 	this 	adversary
proceeding 	as 	counterclaims 	in 	the 	summary 	ejectment 	action,
Plaintiff 	raised 	many 	of 	the 	claims 	asserted 	in 	this 	adversary
proceeding 	as 	defenses 	to 	the 	motion 	for 	relief 	from 	stay. 	See
ECF 	No. 	65. 	The 	Court 	granted 	the 	motion, 	modifying 	the 	stay 	to
permit 	all 	claims, 	including 	Plaintiff’s 	counterclaims, 	to 	be
litigated in the state court, with the enforcement of any monetary
relief 	awarded 	against 	Plaintiff 	remaining 	subject 	to 	the
automatic stay. 	Case No. 25-10566, ECF No. 75.3
3 	After 	granting 	relief 	from 	stay, 	the 	Court 	entered 	its 	order 	discharging
Plaintiff from any monetary obligations under the prepetition lease. 	Case No.
25-10566, ECF No. 77. 	As a result of the discharge injunction, Defendant no
Case 25-02021 Doc 13 Filed 01/20/26 Page 3 of 11

4
DISCUSSION
I. 	Abstention from hearing this proceeding is mandatory under
28 U.S.C. § 1334(c)(2).
Section 	1334 	of 	title 	28 	of 	the 	United 	States 	Code 	provides
when 	a 	bankruptcy 	court 	must 	abstain 	and 	when 	it 	may 	abstain 	in
favor 	of 	state 	court 	adjudication. 	In 	re 	Province 	Grande 	Olde
Liberty, 	LLC, 	No. 	13-01563-8-JRL, 	2013 	WL 	2153214, 	at 	*2 	(Bankr.
E.D.N.C. May 17, 2013). 	Abstention is mandatory under § 1334(c)(2)
when the party seeking abstention proves the following six factors:
(1) a timely motion to abstain is filed, (2) the removed
proceeding 	is 	based 	on 	a 	state 	law 	claim 	or 	state 	law
cause of action, (3) the removed proceeding is “related
to” a bankruptcy case, but does not “arise under” Title
11 	or 	“arise 	in” 	a 	case 	under 	Title 	11, 	(4) 	the 	action
could 	not 	have 	been 	commenced 	in 	a 	United 	States 	court
absent 	jurisdiction 	under 	28 	U.S.C. 	§ 	1334, 	(5) 	the
action 	was 	pending 	when 	the 	bankruptcy 	was 	filed, 	and
(6) 	the 	action 	can 	be 	timely 	adjudicated 	in 	the 	state
forum of appropriate jurisdiction.
Id. 	at 	*2-3 	(quoting 	In 	re 	Newell, 	424 	B.R. 	730, 	734 	(Bankr.
E.D.N.C. 	2010)). 	Regarding 	the 	first 	factor, 	“[c]ourts 	have
generally 	adopted 	a 	flexible, 	case-specific 	approach 	in
determining 	whether 	a 	motion for 	mandatory 	abstention 	is
‘timely.’” 	3rd Time Trucking, LLC v. Massachusetts Mut. Life Ins.
Co., No. 3:11-CV-68-JPB, 2011 WL 4478491, at *3 (N.D.W. Va. Sept.
26, 2011) (quotations omitted). 	As to the third factor, this Court
has previously explained that:
longer may seek to collect or recover monetary damages in the state court as a
personal obligation against Plaintiff. 	11 U.S.C. § 524(a)(2).
Case 25-02021 Doc 13 Filed 01/20/26 Page 4 of 11

5
Cases “arise under” Title 11 when the cause of action or
substantive 	right 	claimed 	is 	created 	by 	the 	Bankruptcy
Code . . . . 	Cases “arise in” a title 11 proceeding if
they 	are 	not 	based 	on 	any 	right 	expressly 	created 	by
title 	11, 	but 	nevertheless, 	would 	have 	no 	existence
outside of the bankruptcy . . . . 	A civil proceeding is
“related 	to” 	a 	Title 	11 	case 	if 	the 	action’s 	outcome
might 	have 	any 	conceivable 	effect 	on 	the 	bankrupt
estate.
In 	re 	Se. 	Materials, 	Inc., 	467 	B.R. 	337, 	346 	nn.4-5 	(Bankr.
M.D.N.C. 2012) (quotations omitted).4
The final factor, whether a matter can be timely adjudicated
in 	state 	court, 	is 	measured 	by 	the 	needs 	of 	the 	bankruptcy 	case.
In 	re 	3G 	Props., 	LLC, 	No. 	10-04763-8-JRL, 	2010 	WL 	4027770, 	at 	*3
(Bankr. E.D.N.C. Oct. 14, 2010) (citing In re Pluma, Inc., No. 99-
11104C-11G, 	2000 	WL 	33673752, 	at 	*2 	(Bankr. 	M.D.N.C. 	Sept. 	15,
2000)). 	“In 	general, 	courts 	focus 	on 	whether 	allowing 	the 	state
court 	to 	hear 	the 	matter 	will 	have 	any 	unfavorable 	effect 	on the
administration 	of 	the 	bankruptcy 	case.” 	Id. 	at 	*3 	(citations
omitted).5
4 The Fourth Circuit applies the Pacor test to determine whether a proceeding
is “related to” a bankruptcy case. 	See A.H. Robins Co. v. Piccinin, 788 F.2d
994, 1002 n.11 (4th Cir. 1986). 	Under the Pacor test, “[a]n action is related
to 	bankruptcy 	if 	the 	outcome 	could 	alter 	the 	debtor’s 	rights, 	liabilities,
options or freedom of action (either positively or negatively) and which in any
way impacts 	upon 	the 	handling 	and 	administration 	of 	the 	bankrupt 	estate.”
Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984).
5 There are seven factors considered in determining whether a matter can be
timely adjudicated in state court:
(1) the backlog of the state court and federal court calendars; (2)
status of the proceeding in state court prior to being removed; (3)
status of the proceeding in the bankruptcy court; (4) the complexity
of the issues to be resolved; (5) whether the parties consent to
the bankruptcy court entering judgment in the non-core case; (6)
Case 25-02021 Doc 13 Filed 01/20/26 Page 5 of 11

6
Each 	of 	the 	six 	factors 	for 	mandatory 	abstention 	is 	present
with respect to the claims asserted by Plaintiff in this no asset
chapter 7 case in which the claims have been claimed as exempt and
the 	trustee 	has 	filed 	a 	report 	of 	no 	distribution. 	First,
Defendant 	was 	not 	served 	with 	the 	summons 	and 	complaint 	until
December 9, 2025. 	See ECF No. 8. 	Defendant filed this Motion on
December 8, 2025. 	ECF No. 4. 	The motion was timely. 	Second, the
adversary proceeding is based on a claim of breach of the implied
warranty 	of 	habitability 	and 	fraudulent 	or 	deceptive 	trade
practices, 	both 	state 	law 	claims. 	See 	ECF 	No. 	1, 	at 	6. 	Third,
this 	adversary 	proceeding 	is 	at 	most 	“related 	to” 	a 	bankruptcy
case but does not “arise under” title 11 or “arise in” a case under
title 11. 	The claims asserted in this adversary proceeding arise
under 	state 	law, 	not 	title 	11 	and 	thus, 	would 	exist 	outside 	of
bankruptcy. 	These 	claims 	are 	related 	to 	the 	bankruptcy 	estate
only 	to 	the 	extent 	that 	any 	recovery 	would 	be 	property 	of 	the
estate 	to 	be 	administered 	by 	the 	trustee, 	who 	has 	not 	sought 	to
intervene 	in 	this 	adversary 	proceeding 	and 	has 	filed 	a 	report 	of
no 	distribution. 	See 	ECF 	No. 	73.6 	As 	to 	the 	fourth 	and 	fifth
whether a jury demand has been made; and (7) whether the underlying
bankruptcy case is a reorganization or a liquidation case.
In re 3G Props., 2010 WL 4027770, at *3 (citing In re Pluma, 2000 WL 33673752,
at *3); In re Georgou, 157 B.R. 847, 851 (N.D. Ill. 1993)).
6 See 11 U.S.C. § 541(a)(1) (stating that the bankruptcy estate is comprised of
“all 	legal 	or 	equitable 	interests 	of 	the 	debtor 	in 	property 	as 	of 	the
commencement 	of 	the 	case”); 	Ahmed 	v. 	Porter, 	No. 	1:09CV101-RJC-DHL, 	2010 	WL
Case 25-02021 Doc 13 Filed 01/20/26 Page 6 of 11

7
factors, there are no independent grounds for federal jurisdiction
over 	these 	claims 	and 	a 	state 	court 	action 	based 	on 	these 	claims
was pending when Plaintiff’s bankruptcy case was filed. 	See Case
No. 25-10566, ECF No. 18, at 11.
Finally, 	these 	claims 	can 	be 	timely 	adjudicated 	in 	state
court. 	Plaintiff’s claims are on appeal in the state court action,
id., 	whereas 	an 	answer 	has 	not 	yet 	been 	filed 	in 	the 	adversary
proceeding. 	Thus, 	the 	state 	court 	case 	has 	progressed
substantially 	further 	than 	this 	adversary 	proceeding.
Additionally, 	Plaintiff 	has 	claimed 	an 	exemption 	in 	the 	proceeds
of 	any 	judgment 	on 	these 	claims, 	see 	Case 	No. 	25-10566, 	ECF 	No.
59, 	at 	17, 	and 	the 	deadline 	to 	object 	to 	those 	exemptions 	under
Fed. 	R. 	Bankr. 	P. 	4003 	is 	February 	4, 	2026. 	The 	meeting 	of
creditors under § 341 concluded on January 5, 2026, and the chapter
7 	trustee 	has 	filed 	a 	report 	of 	no 	distribution. 	To 	the 	extent
that 	Plaintiff’s 	claimed 	exemptions 	become 	final, 	this 	adversary
proceeding could not have any effect on the administration of the
bankruptcy 	estate 	because 	any 	judgment 	obtained 	would 	not 	be
584045, 	at 	*2 	(W.D.N.C. 	Feb. 	16, 	2010) 	(stating 	that 	a 	cause 	of 	action 	is
property of the bankruptcy estate where it “existed at the commencement of the
filing of the bankruptcy action and the debtor could have asserted the claim of
his own behalf under state law”) (citing Butner v. United States, 440 U.S. 48,
54 (1979)).
Case 25-02021 Doc 13 Filed 01/20/26 Page 7 of 11

8
property 	of 	the 	bankruptcy 	estate.7 	Therefore, 	abstention 	is
mandatory under § 1334(c)(2).
II. 	Even 	if 	abstention 	were 	not 	mandatory, 	the 	Court 	would
permissively abstain under 28 U.S.C. § 1334(c)(1).
Under 	28 	U.S.C. 	§ 	1334(c)(1), 	“a 	federal court may
voluntarily abstain from 	hearing 	core 	and non-core proceedings
‘if the interests of justice’ require or ‘in the interest of comity
with 	State Court or 	respect 	for 	State 	law.’” 	Puls 	v. 	Suntrust
Mortg., Inc., No. 5:08-CV-369-F, 2010 U.S. Dist. LEXIS 150888, at
*16 (E.D.N.C. Aug. 20, 2010). 	Courts consider twelve factors when
determining whether to permissively abstain:
(1) 	efficiency 	in 	the 	administration 	of 	the 	debtor's
estate; 	(2) 	the 	extent 	to 	which 	state 	law 	issues
predominate 	over 	bankruptcy 	issues; 	(3) 	whether 	the
issues involve difficult or unsettled issues of state
law; 	(4) 	the 	presence 	of 	a 	related 	proceeding
commenced 	in 	state 	court; 	(5) 	the 	existence 	of 	a
jurisdictional basis other than 28 U.S.C. § 1334; 	(6)
the 	degree 	of 	relatedness 	or 	remoteness 	of 	the
proceeding 	to 	the 	main 	bankruptcy 	case; 	(7) 	the
substance 	rather 	than 	form 	of 	an 	asserted 	“core”
proceeding; (8) the feasibility of severing state law
claims from core bankruptcy matters to allow judgments
to be entered in state courts; (9) the burden of the
bankruptcy 	court’s 	docket; 	(10) 	the 	likelihood 	that
the 	commencement 	of 	the 	proceedings 	in 	bankruptcy
court 	involved 	forum 	shopping 	by 	one 	of 	the 	parties;
(11) 	the 	existence 	of 	a 	right 	to 	a 	jury 	trial; 	(12)
7 If Plaintiff’s claimed exemptions had become final prior to the commencement
of 	this 	adversary 	proceeding, 	the 	Court 	likely 	would 	lack 	subject 	matter
jurisdiction. 	See 28 U.S.C. § 1334; Constantine v. Rectors & Visitors of George
Mason 	Univ., 	411 	F.3d 	474, 	480 	(4th 	Cir. 	2005) 	(“[a] 	federal 	court 	has 	an
independent obligation to assess its subject-matter jurisdiction, and it will
raise 	a 	lack 	of 	subject-matter 	jurisdiction 	on 	its 	own 	motion”) 	(quotations
omitted). 	Moreover, Plaintiff seeks removal of eviction from her record. 	ECF
No. 1, at 1. 	The Court lacks subject matter jurisdiction over this claim.
Case 25-02021 Doc 13 Filed 01/20/26 Page 8 of 11

9
whether 	non-debtor 	parties 	are 	involved 	in 	the
proceeding.
In re Dambowsky, 526 B.R. 590, 606 (Bankr. M.D.N.C. 2015) (quoting
In 	re 	Freeway 	Foods 	of 	Greensboro, 	Inc., 	449 	B.R. 	860, 	879-80
(Bankr. M.D.N.C. 2011)).
These 	factors 	weigh 	in 	favor 	of 	permissive 	abstention. 	The
adversary 	proceeding 	is 	based 	solely 	on 	state 	law 	and 	would 	be
better 	addressed 	by 	the 	state 	court. 	In 	fact, 	the 	Court 	already
has 	modified 	the 	automatic 	stay 	to 	permit 	those 	claims 	to 	be
litigated. 	This 	Court’s 	subject 	matter 	jurisdiction 	over
Plaintiff’s claims is tenuous, and adjudication of the claims will
not have an effect on the administration of the bankruptcy estate.
See 	supra 	n.7. 	Resolving 	this 	dispute 	in 	state 	court 	also 	is 	a
more economical use of judicial resources as the state court action
has progressed substantially further than the adversary proceeding
and 	the 	Court 	has 	lifted 	the 	stay 	to 	permit 	it 	to 	be 	concluded.
There 	would 	be 	prejudice 	to 	Defendant 	if 	required 	to 	relitigate
these 	claims 	anew 	after 	already 	litigating 	them 	in 	state 	court.
The Court has not been given any reason to suggest that the state
court 	is 	an 	inadequate 	forum 	or 	that 	there 	is 	any 	benefit 	in
proceeding 	with 	these 	claims 	in 	bankruptcy 	court. 	There 	is 	also
a 	risk 	of 	promoting 	forum 	shopping 	if 	Plaintiff 	is 	permitted 	to
seek 	a 	more 	favorable 	outcome 	in 	this 	Court 	instead 	of 	awaiting
the outcome of her appeal of an unfavorable decision in the state
Case 25-02021 Doc 13 Filed 01/20/26 Page 9 of 11

10
court. 	Therefore, 	the 	Court 	finds 	that 	the 	interests 	of 	justice
and 	comity 	require 	permissive 	abstention 	from 	hearing 	this
adversary proceeding.
NOW, 	THEREFORE, 	IT 	IS 	HEREBY 	ORDERED, 	ADJUDGED, 	AND 	DECREED
that 	Defendant’s 	motion 	is 	granted 	and 	this 	adversary 	proceeding
is dismissed without prejudice.
[END OF DOCUMENT]
Case 25-02021 Doc 13 Filed 01/20/26 Page 10 of 11

11
Parties to be Served
25-02021
John Paul Hughes Cournoyer
U.S. Bankruptcy Administrator 	Via CM/ECF
Adam M. Gottsegen
Counsel for Defendant 	Via CM/ECF
Sharon Annette Reid
1183 University Dr #105-205
Burlington, NC 27217
Sharon Annette Reid
A-1
1212 Collins Drive
Burlington, NC 27215
Janeth Rodriguez
c/o Attorney Ralph Hill
3120 S. Church St
Burlington, NC 27215
Case 25-02021 Doc 13 Filed 01/20/26 Page 11 of 11