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Judge Karlin's Guidelines for Concluding An Adversary Proceeding

Judge Karlin's Guidelines for Concluding An Adversary Proceeding

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JUDGE JANICE MILLER KARLIN’S
GUIDELINES FOR CONCLUDING AN ADVERSARY PROCEEDINGS


There are 3 ways to resolve an adversary proceeding to effect its closing:

1.
Dismissal1 - resolves the legal action from a procedural perspective (Fed. R. Civ. P. 41
made applicable in adversary proceedings by Fed. R. Bankr. P. 7041–copy attached).
a.
Before service of a response – The plaintiff may dismiss an adversary proceeding
without court order by filing a “Notice of Dismissal” at any time before the
defendant responds. See Fed. R. Civ. P. 41(a)(1)(i). See Exhibit A for a“Notice
of Dismissal” form.
b.
After service of a response –
i.
The adversary proceeding may be dismissed upon the filing of an“Agreed
Stipulation of Dismissal” signed by counsel for all parties who have
appeared in the action (or by pro se parties if no counsel has entered
appearance for an answering defendant). See Fed. R. Civ. P.
7041(a)(1)(ii). See Exhibit B for an “Agreed Stipulation of Dismissal”
form.
ii.
Plaintiff may file a “Motion to Dismiss” to obtain an Order of Dismissal.
See Fed. R. Civ. P. 41(a)(2). See Exhibit C for a“Motion to Dismiss”
form.
(1)
Because this is a dispositive motion, a 21-day response time is
allowed unless it is a motion signed by all parties who have
entered an appearance. See D. Kan. Rule 6.1(d)(2) regarding
response times for dispositive and non-dispositive motions in
adversary proceedings.
2.
Settlement - an agreement between the parties that resolves the substance of the dispute.
a.
Parties may dismiss an adversary proceeding as set forth above, or they may
submit an “Agreed Journal Entry of Judgment” and the court will enter a
judgment and close the adversary proceeding after the appeal time has run.
Enforcement of the settlement agreement must be sought in state court unless
there is some independent basis for federal jurisdiction or the judgment
1A plaintiff may not dismiss a complaint objecting to a debtor’s discharge (§ 727 action)
without notice to all parties in interest. A motion to dismiss the adversary proceeding should be
accompanied by the affidavits required, and should be prepared in accordance with D. Kan. LBR
7041.1 and served upon the case trustee, the United States Trustee, all creditors and any person
who has requested notice. See Fed. R. Bankr. P. 7041; D. Kan LBR 7041.1.


specifically calls for retention of jurisdiction. See Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375 (1994).2

b.
The parties may agree to stay execution of the judgment pursuant to the terms of
the settlement agreement. See Exhibit D for an “Agreed Journal Entry of
Judgment” form.
i.
Parties may request that the court close the adversary proceeding subject
to reopening, without a fee, for the purpose of entering judgment against
the defendant (in the event of default). See Fed. R. Civ. P. 41(a)(1)(ii).
Parties should file an “Agreed Stipulation of Dismissal” specifically
requesting that the Order of Dismissal incorporate the terms of the
settlement agreement and/or that the court specifically retain jurisdiction
over the settlement agreement. See Morris v. City of Hobart, 39 F.3d
1105 (10th Cir. 1994). See Exhibit E for a“Agreed Stipulation of
Dismissal” form.
c.
Upon full performance of a settlement agreement, the parties shall file an “Agreed
Stipulation of Dismissal” signed by all parties who have appeared in the action.”
See Fed. R. Civ. P. 41(a)(1)(ii). See Exhibit B for an “Agreed Stipulation of
Dismissal” form.
3.
Judgment - Final legal determination of disputed legal or factual issues that resolves
legal rights from which an appeal can be taken. The adversary proceeding will be closed
by the Court Clerk 14 days after entry of the final judgment unless the judgment is
appealed or there are other issues pending.3 See Exhibit F for a form commonly used by
Chapter 7 Trustees. It grants a money judgment against Debtor/Defendant but then stays
execution while allowing repayment of the sum certain. It also contains an agreement
that discharge will be revoked only if the money judgment is not paid, and after notice is
provided.
2Bankruptcy Rule 9019 provides that “[o]n motion by the trustee and after notice and a
hearing, the court may approve a compromise or settlement.” Fed. R. Bankr. P. 9019(a).

3Remember that when defendants(s) have satisfied the judgment, a Satisfaction of
Judgment must be filed by Plaintiff.

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EXHIBIT A

UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:


Debtor(s).
Case No.
Chapter
v.
Plaintiff,
Adv. No.
Defendant.1

NOTICE OF DISMISSAL

Plaintiff _______________ (“Plaintiff”) seeks to dismiss the above-referenced adversary
proceeding pursuant to Federal Rule of Civil Procedure 41(a)(1)(i), made applicable to adversary
proceedings by Federal Rule of Bankruptcy Procedure 7041. Defendant _________ has not filed
a responsive pleading in this adversary proceeding. Accordingly, Plaintiff seeks dismissal
without court order.
Dated this ____ day of ______, 201___.

Attorney Name, KBA #
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

1If more than one Defendant, the Notice must address the status of each Defendant if
Plaintiff’s intent is to dismiss the entire case.

3



EXHIBIT B

UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:
Case No.
Debtor(s).

Plaintiff,

v.
Adv. No.
Defendant.1
AGREED STIPULATION OF DISMISSAL

Pursuant to Federal Rule of Civil Procedure 41(a)(1)(ii), made applicable to adversary
proceedings by Federal Rule of Bankruptcy Procedure 7041, Plaintiff ______________ and
Defendant _______________, being all parties who entered an appearance in the above-
referenced adversary proceeding, hereby jointly and mutually stipulate to the dismissal of all
claims asserted herein by virtue of any pleading entered or filed in this proceeding,
[with/without] prejudice to refiling.
Dated this ____ day of ______, 201___.

Attorney Name, KBA #_________
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR DEFENDANT

1If there is more than one Defendant, the Notice must address the status of each
Defendant if Plaintiff’s intent is to dismiss the entire case.

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EXHIBIT C

UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:


Debtor(s).
Case No.
Chapter
v.
Plaintiff,
Adv. No.
Defendant.
MOTION TO DISMISS

On _____________, Plaintiff _____________ (“Plaintiff”) filed the Complaint to
[describe nature of claims and the relief sought] (the “Complaint”). On _______________,
Defendant ___________ (“Defendant”) filed an Answer to the Plaintiff’s Complaint.

Pursuant to Federal Rule of Civil Procedure 41(a)(2), made applicable to adversary
proceedings by Federal Rule of Bankruptcy Procedure 7041, Plaintiff seeks to dismiss all claims
set forth in the Complaint.
Dated this ____ day of ______, 201___.

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

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[4 inch top margin]

EXHIBIT D

UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:


Debtor(s).
Case No.
Chapter
v.
Plaintiff,
Adv. No.
Defendant.1

AGREED JOURNAL ENTRY OF JUDGMENT

Plaintiff ________________ (“Plaintiff”) and Defendant ___________ (“Defendant”)
jointly and mutually agree that judgment shall be entered against the Defendant pursuant to
[insert statutory or other authority].

Plaintiff and Defendant agree that [describe terms of agreement between the parties].
IT IS, THEREFORE, ORDERED that [insert specific terms of the agreed judgment,

e.g. amount of judgment, terms of repayment, interest calculation] is granted [in the amount of]
[any non-monetary relief] _____________.
IT IS FURTHER ORDERED that [if applicable, insert consequences of default under a
payment plan, or other additional terms].
# # #

1If there is more than one Defendant, the Agreed Journal Entry should address all
Defendants or indicated if there is an intent to separately deal with/or litigate against any
remaining Defendant(s).

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APPROVED BY:

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR DEFENDANT


[4 inch top margin]

EXHIBIT E

UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:


Debtor(s).
Case No.
Chapter
v.
Plaintiff,
Adv. No.
Defendant.

AGREED STIPULATION OF DISMISSAL

[If applicable, (Subject to Reopening, without fee, for
purposes of entering judgment in the event of default)]

Pursuant to Federal Rule of Civil Procedure 41(a)(1)(ii), made applicable to adversary
proceedings by Federal Rule of Bankruptcy Procedure 7041, Plaintiff _______________
(“Plaintiff”)
and Defendant _______________ (“Defendant”), being all parties that entered an appearance in the
above-referenced adversary proceeding, hereby jointly and mutually stipulate to the dismissal of the
adversary proceeding [subject to reopening for purposes of entering judgment against the Defendant
in the event of default under the settlement agreement]. The parties have agreed that [insert terms
of agreement, repayment terms, if any, terms of default, etc.]

Dated this ____ day of ______, 201___.

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

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Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR DEFENDANT


[4-inch top margin]

EXHIBIT F

IN THE UNITED STATES BANKRUPTCY COURT
DISTRICT OF KANSAS


IN RE:


Case No.

Debtor.

Plaintiff,
vs. Adv. No.
Defendant.

AGREED JOURNAL ENTRY OF JUDGMENT

Plaintiff’s Complaint is before the Court upon the agreement of the parties.
_______________ appears by and through _________________. ___________________appears
by and through _________________________.

The parties agree, and the Court FINDS:

1.
Trustee filed a Complaint seeking revocation of Debtor’s discharge pursuant to 11
U.S.C. § 727_____ for Debtor’s failure to turnover property of the bankruptcy estate;
2.
The Trustee properly served a copy of the Complaint and Summons upon the Debtor,
who is the defendant herein, and service is proper;
3.
This Court has personal and subject matter jurisdiction over this core proceeding;
4.
Defendant has advised Trustee that he/she has spent the funds being sought by the
Trustee, but wishes to repay those funds.
IT IS, THEREFORE, ORDERED, ADJUDGED and DECREED that the Trustee is

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granted judgment against _______________________ in the sum of ______________________,
plus ______ court costs.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Trustee will not
and cannot execute upon the judgment, provided that [set out terms of repayment here]:

1.
Prior to __[DATE]_____________, Defendant remits __[SUM]______________ to
Trustee;
2.
Commencing on or before _____________________, Defendant makes payments
to the Trustee of ________________ and continues to make ___________ monthly
payments by the ___day of each succeeding month until the judgment is paid in full.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that if Defendant makes
all payments to the Trustee in a timely manner, the Trustee shall submit a Satisfaction of Judgment
to the Court.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that if Defendant fails to
make the payments in a timely manner, the Trustee, after providing Defendant and his/her attorney
with fourteen (14) days written notice of default, may submit an Order to the Court revoking
Debtor’s discharge pursuant to 11 U.S.C. § 727_____, which shall be granted without hearing.

# # #

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APPROVED BY:

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR PLAINTIFF

Attorney Name, KBA #__________
[Address/Telephone/Fax/Email]

ATTORNEY FOR DEFENDANT


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