08/18/2011 – Order filed in the Sharon Vernell Cofield Adversary Proceedings by Cofield et al before U.S. Bankruptcy Judge Randy D. Doub in the United States Bankruptcy Court for the Eastern District of North Carolina. Eastern District of South Carolina, U.S. Bankruptcy Judge Randy D. Doub holds that under Stern v. Marshall, 564 U.S.—, 131 S. Ct. 2594, 252011 WL 2472792 (June 23, 2011), the Court has authority to render a final judgment in the pending adversary proceeding.  Judge Doub found that, in determining the amount and dischargeability of Plaintiffs claim, “[t]he alleged breach of contract defense is so intertwined with the Plaintiff’s claim, that consideration of the facts and circumstances of the breach of contract defense is necessary to determine the outcome of this proceeding.”

Judge Doub first considered whether the Defendant’s breach of contract allegations were in the nature of a defense or a counterclaim.  He concluded that the breach of contract claim was raised as a defense finding that ” Defendant’s defense of breach of contract, is a defense to the amount claimed by Plaintiff.”   Even if the breach of contract allegations had been in the nature of a counterclaim, Judge Doub reads Stern as standing ” for the proposition that if the nature of the debtor’s counterclaim is such that it would necessarily have been fully resolved through the process of ruling on the creditor’s proof of claim, then the Bankruptcy Court has jurisdiction to decide the counterclaim.” In conclusion, Judge Doub held that the adversary proceeding was a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B) and the Court has statutory and constitutional authority to hear and render judgment on all issues raised in this adversary proceeding.