Miller v. Miller - Court Dismisses Lane Law Firm Claims, Remands to State Court

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April 16, 2026 Get Citation Alerts Download PDF Add Note

In re: John Miller, Jr., Julie Miller v. John Miller, Jr., Haley Miller, and The Lane Law Firm

United States Bankruptcy Court, W.D. Texas

• Citations: None known
• Docket Number: 25-01060

• Precedential Status: Unknown Status

• Opinion

• Authorities (31)

• Cited By (0)

• Summaries (0)

• Similar Cases (70.9K)

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Trial Court Document

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Dated: April 16, 2026.
Chet hpin G. Brot,
CHRISTOPHER G. BRADLEY
UNITED STATES BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
In re: : Case No. 24-11038-CGB
JOHN MILLER, JR., §
§
Debtor. Chapter 7
JULIE MILLER, §
§
Plaintiff, §
§
S$ Adv. No. 25-01060-CGB
JOHN MILLER, JR., HALEY § Ve INO. £0
MILLER, and THE LANE LAW §
FIRM, §
§
Defendants. §
OPINION AND ORDER REGARDING DEFENDANTS’ MOTION TO
DISMISS [ECF No. 11] AND PLAINTIFF’S MOTION
TO REMAND OR ABSTAIN [ECE No. 18]

Introduction
This highly contentious adversary proceeding is a removed state court lawsuit
stemming out of a financial dispute between an individual debtor and his ex-wife.
The plaintiff sued the debtor, his current wife, and the law firm representing the
debtor for a variety of state causes of action. In this opinion, the Court considers the
bounds of “related to” jurisdiction and holds that simply being a relative of the debtor
is not enough to establish “related to” jurisdiction. And given the lack of any grounds
for exercising jurisdiction over the plaintiff’s claims against the debtor’s current
wife, and despite its concerns that those claims are (at best) difficult to understand,
nonetheless, this Court remands them back to the state court. Because the claims
against the debtor are so closely and thoroughly intertwined with the claims against
his current wife, the Court permissively abstains from exercising jurisdiction over
those claims as well, and thus remands them to state court. Finally, however, the
Court exercises jurisdiction over, and dismisses, the claims against the law firm, for
failure to state a claim upon which relief can be granted.

Procedural Background
On August 29, 2024, John Miller, Jr. (the “Debtor”), represented by The Lane
Law Firm, PLLC (the “Lane Firm”), filed an individual chapter 7 bankruptcy case.
Julie Miller, (the “Plaintiff”) was not listed as a creditor in the Debtor’s individual
case.1 On December 17, 2024, the Debtor received a chapter 7 discharge and the case
was subsequently closed.2

Before the Debtor’s individual case was filed, the Debtor’s business, Packet
Construction, LLC (“Packet Construction”) filed a subchapter V bankruptcy case.3
Packet Construction is also represented by the Lane Firm.4 Julie Miller was
originally not listed as a creditor in Packet Construction’s bankruptcy case either.5
The Court confirmed Packet Construction’s plan of reorganization on April 4, 2024.6

On July 7, 2025, the Plaintiff filed a state court petition (the “State Court
Petition”) against the Debtor, Haley Miller, and the Lane Firm (the “Defendants”)

1 Case No. 24-11038, ECF No. 1.
2 Case No. 24-11038, ECF No. 18.
3 Case No. 23-10860, ECF No. 1.
4 Case No. 23-10860, ECF No. 41 (Order Approving the Lane Law Firm, PLLC as Counsel for
the Debtor-in-Possession).
5 Compare Case No. 23-10860, ECF No. 1 (schedules filed October 12, 2023), with Case No. 23-
10860, ECF No. 116, at 5 (amended schedules filed October 15, 2025, including Julie Miller’s
claim).
6 Case No. 23-10860, ECF No. 98.
alleging claims for (I) Fraudulent Inducement; (II) Fraud by Misrepresentation; (III)
Common Law Fraud; (IV) Conspiracy; (V) Unjust Enrichment; and (VI)
Conversion.7

Several months later, on November 5, 2025, the Defendants removed the State
Court Lawsuit to this Court, which initiated this adversary proceeding.8 In the Notice
of Removal, the Defendants argue that removal is proper because the lawsuit
violated the discharge injunction in the Debtor’s individual bankruptcy case.9 The
Debtor then moved to reopen his chapter 7 case to assert claims against the Plaintiff
for violating his discharge injunction, and the case was reopened on December 9,
2025.10 The Debtor’s Motion for Contempt related to the discharge injunction claims
remains pending in the main bankruptcy case.11

Currently pending in this adversary proceeding are Defendants’ Rule 12(b)(6)
Motion to Dismiss Plaintiff’s Petition (the “Motion to Dismiss”)12 and the Plaintiff’s
Motion to Remand (the “Motion to Remand”).13

In the Motion to Dismiss, the Defendants seek dismissal of the six causes of
action in the State Court Petition for failure to state a claim pursuant to Rule 12(b)(6).
In response, the Plaintiff alleges that the Court lacks subject matter jurisdiction over
this adversary proceeding and contends that the State Court Petition pleads sufficient
facts to support her causes of action.14 In their reply, the Defendants argue that the
Court has jurisdiction over this matter and the non-Debtor parties because “Haley
Miller [is] quite literally related to the Chapter 7 Debtor, Mr. Miller, by marriage,
and The Lane Law Firm was his counsel during the Chapter 7.”15

In the Motion to Remand, the Plaintiff argues that the Court lacks subject
matter jurisdiction over the case or, alternatively, asks the Court to abstain pursuant

7 ECF No. 1-2 (State Court Petition).
8 Notice of Removal, ECF No. 1.
9 Id. at ¶ 9.
10 Case No. 24-11038, Mot. to Reopen, ECF No. 24; Order Granting Mot. to Reopen, ECF No. 56.
11 Case No. 24-11038, ECF No. 25. The Court will rule on the Motion for Contempt by separate
order entered in the main case.
12 Mot. to Dismiss, ECF No. 11.
13 Mot. to Remand, ECF No. 18.
14 Resp. to Mot. to Dismiss, ECF No. 24. The Plaintiff also purports to seek sanctions against
Defendants’ counsel, but reason for imposing sanctions appears lacking, not to mention that this
is not procedurally the proper way to seek such sanctions.
15 Reply, ECF No. 26.
to 28 U.S.C. § 1334 (c)(2) because the proceeding is based on state law claims and
there is no other basis for federal jurisdiction.16

Factual Background and Allegations

According to the State Court Petition, at some point following the Debtor’s
divorce from the Plaintiff, the Debtor asked the Plaintiff for a $150,000 short-term
loan that he said he would quickly pay back from anticipated receivables, plus
$25,000 and interest.17 The Plaintiff alleges that the Debtor said that he needed the
money to keep afloat the family business, Packet Construction, which employed
several family members of both the Debtor and the Plaintiff.18 The Plaintiff alleges
that this was untrue and that the money was instead used to fund the lavish living
expenses of Debtor and his new wife, Defendant Haley Miller, and to hire Defendant
Lane Law Firm (the “Lane Firm”) to file bankruptcy for Packet Construction.19

After the Plaintiff demanded repayment of the loan on May 29, 2025, she was
informed by the Lane Firm that the loan had been dealt with in Packet Construction’s
bankruptcy.20 However, in actual fact, Packet Construction failed to list the $175,000
debt in its bankruptcy schedules.21 The Lane Firm also allegedly said that the loan
had been discharged through the Debtor’s personal bankruptcy.22 But again, the loan
had not been scheduled in Mr. Miller’s personal case either.23 In sum, the Plaintiff
alleges that the Debtor and the Lane Firm concealed the loan from the bankruptcy
court and concealed the bankruptcy cases from the Plaintiff.24

In the Motion to Dismiss, the Defendants provide their version of events. They
allege that on May 9, 2022, the Plaintiff loaned $150,000 to Packet Construction,
not the Debtor, by way of a promissory note that was signed by the Debtor solely in
his capacity as a member of Packet Construction.25 They contend that the promissory
note was inadvertently left off Packet Construction’s original schedules, which were
filed on October 12, 2023, but that the schedules have now been amended to include

16 Mot. to Remand, ECF No. 18.
17 ECF 1-2 at 3.
18 Id. 19 Id. 20 Id. 21 Id. 22 Id. 23 Id. at 3–4.
24 Id. 25 Mot. to Dismiss, ECF No. 11, ¶ 8.
the Plaintiff’s unsecured claim on October 15, 2025.26 The Defendants therefore
contend that the note is included in Packet Construction’s separate chapter 11
bankruptcy case, in which a plan was confirmed non-consensually on April 3,
2024.27 Under the terms of the plan, unsecured creditors were to be paid 3.79% of
their claims over 60 months, meaning if the Plaintiff’s claim were included in
distributions, she would receive $5,174.90 over the life of the plan.28 However, the
Defendants also state Packet Construction’s plan payments are not being made and
operations have terminated.29 Thus, the Defendants say that Packet Construction
cannot in good faith amend its plan to include the Plaintiff’s claim.30 But they add
that because of the failure of the plan, the Plaintiff’s claim against Packet
Construction will not be discharged, and should the business discover assets of any
value or restart its operations, the Plaintiff would still be able to assert her claim
against Packet Construction.31

Because the promissory note was between the Plaintiff and Packet
Construction, the Defendants argue that the debt was not and should not have been
included in the Debtor’s individual bankruptcy case.32 Furthermore, any debt related
to the loan would have been discharged on December 17, 2024. The Defendants also
contend that the Plaintiff violated the Debtor’s discharge by filing the State Court
Petition and attempting to collect debt owed by Packet Construction.33

Analysis

A. The Court has jurisdiction over the claims against John Miller and the
Lane Law Firm but not those against Haley Miller.

This Court derives its statutory subject matter jurisdiction from several
sources. First, 28 U.S.C. § 1334 establishes that federal district courts have primary
jurisdiction over bankruptcy cases.34 Next, 28 U.S.C. § 157 (a) gives district courts

26 Id. at ¶ 9.
27 Id. at ¶ 10.
28 Id. 29 Id. at ¶ 11.
30 Id. 31 As of April 16, 2026, the Plaintiff still has not filed a motion asking the Court to extend the
claims bar date as to her claim or filed a claim in the Packet Construction case.
32 The Debtor amended his schedules on January 6, 2026, to include Julie Miller’s claim, which
he marked as contingent and disputed. Case No. 24-11038, ECF No. 52, at 15.
33 Mot. to Dismiss, ECF No. 11.
34 28 U.S.C. § 1334.
authority to refer all bankruptcy cases to bankruptcy courts.35 The District Court for
the Western District of Texas has chosen to do so by entering an order directing that
“[a]ll bankruptcy cases and proceedings under Title 11 of the United States Code, or
arising from or related to any case or proceeding filed under Title 11, shall be
automatically referred to the bankruptcy judges of this district.”36

Section 157 further defines the bounds of bankruptcy court jurisdiction. Under
§ 157(b)(1), bankruptcy judges have authority to “determine all cases under title 11
and all core proceedings arising under title 11, or arising in a case under title 11,
referred under subsection (a) of this section, and may enter appropriate orders and
judgments” subject to review by district courts.37 “A proceeding is core under
section 157 if it invokes a substantive right provided by title 11 or . . . by its nature,
could arise only in the context of a bankruptcy case.”38 Relevant here, § 157(b)(2)
states that core proceedings include (but are not limited to) “matters concerning
administration of the estate,” “allowance or disallowance of claims against the
estate,” and “determinations as to the dischargeability of particular debts.”39

In addition to core proceedings, § 157(c) provides that bankruptcy courts may
also hear a proceeding that is “related to” a case under title 11.40 With all parties’
consent, the bankruptcy court can issue a final judgment in actions that are related
to the bankruptcy case.41 Absent such consent (and such consent is lacking from
Plaintiff),“the bankruptcy judge shall submit proposed findings of fact and
conclusions of law to the district court, and any final order or judgment shall be
entered by the district judge after considering the bankruptcy judge's proposed
findings and conclusions and after reviewing de novo those matters to which any
party has timely and specifically objected.”42

In sum, these provisions give bankruptcy courts authority to hear “(1) ‘cases
under title 11;’ (2) ‘proceedings arising under title 11;’ (3) ‘proceedings arising in a

35 28 U.S.C. § 157 (a).
36 Order of Reference of Bankruptcy Cases and Proceedings (W.D. Tex. Oct. 4, 2013).
37 28 U.S.C. § 1587 (b)(1).
38 Wood v. Wood (In re Wood), 825 F.2d 90, 97 (5th Cir. 1987).
39 28 U.S.C. § 157 (b)(2).
40 28 U.S.C. § 157 (c)(1).
41 28 U.S.C. § 157 (c)(2); Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665, 684–85 (2015); VSP
Labs, Inc. v. Hillair Capital Invs., L.P. (In re PFO Global, Inc.), 26 F. 4th 245, 253 (5th Cir. 2022).
42 28 U.S.C. § 157 (c)(1).
case under title 11;’ and (4) ‘proceedings related to a case under title 11.’ These four
categories ‘conjunctively . . . define the scope of [statutory] jurisdiction.’”43

When claims that relate to a bankruptcy case are pending in state court, 28 U.S.C. § 1452 (a) gives parties authority to remove such claims to federal district
courts.44 At that point, the order of reference discussed above grants the bankruptcy
court authority to hear these state law claims to the extent allowed by governing law.
Alternatively, under § 1452(b), the bankruptcy court can remand the causes of action
“on any equitable ground.”45

In her Motion to Remand, the Plaintiff contends that this Court lacks subject
matter jurisdiction over this lawsuit, citing § 1452(b). But § 1452(b) simply grants
the court authority to remand the lawsuit “on equitable grounds.” It does not
somehow deprive the Court of jurisdiction. However, because the Plaintiff
challenges this Court’s jurisdiction, and despite her failure to cite any relevant
section or law, the Court will carefully review whether it has jurisdiction to hear the
claims asserted in the State Court Petition.

1. The Court has jurisdiction over the claims against the Lane Firm.

The Lane Firm represents the Debtor in his individual bankruptcy case and in
this adversary proceeding as well as representing Packet Construction in its chapter
11 case. The State Court Petition includes allegations that the Lane Firm conspired
with the other Defendants to conceal the Plaintiff’s claim from the bankruptcy court
and the bankruptcy cases from the Plaintiff. Obviously, these claims are “inseparable
from the bankruptcy context.”46 Thus, the claims against the Lane Firm are “core”
claims related to administration of the Debtor’s bankruptcy case, and the Court has
jurisdiction over the claims.

43 Deelen v. Dickson (In re McDermott Int’l, Inc.), No. 23-20436, 2024 WL 3875141, at *2 (5th
Cir. Aug. 20, 2024) (first quoting 28 U.S.C. §§1334 (a)–(b) and 157 (a)–(b)(1), and then quoting
Wood v. Wood (In re Wood), 825 F.2d 90, 93 (5th Cir. 1987)).
44 28 U.S.C. § 1452 (a).
45 28 U.S.C. § 1452 (b).
46 SR Construction Inc. v. RE Palm Springs II, L.L.C. (In re RE Palm Springs II, L.L.C.), 106 F.4th
406, 414 (5th Cir. 2024) (quoting Southmark Corp. v. Coopers & Lybrand (In re Southmark Corp.), 163 F.3d 925, 931 (5th Cir. 1999)).
2. The Court has jurisdiction over the claims against John Miller.

The State Court Petition brings claims against John Miller that are based on
conduct that occurred before the Debtor filed bankruptcy. The alleged injuries
suffered by Plaintiff constitute “claims” within the meaning of bankruptcy law.
Section 101(5)(A) of the Bankruptcy Code broadly defines “claim” as a “right to
payment, whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured.”47 The Plaintiff’s claims against John Miller relate to pre-
petition conduct and derive from the parties’ pre-petition relationship; they are thus
“claims” that existed on the petition date.48 Those claims (and any judgment
ultimately awarded on the basis of them) would be considered, under bankruptcy
law, pre-petition claims against the Debtor’s bankruptcy estate, and any liability
deriving from them would be subject to discharge, unless the Court determined that
the debt was non-dischargeable pursuant to § 523 of the Bankruptcy Code. The
determinations of whether a claim should be allowed and whether a debt is non-
dischargeable are core bankruptcy matters over which the Court undoubtedly has
jurisdiction.49

Typically, in a chapter 7 case a creditor must file a non-dischargeability action
“within 60 days after the first date set for the 341(a) meeting of creditors.”50 But
under § 523(a)(3), a chapter 7 discharge does not discharge a debtor from debt that
is not listed or scheduled in time to permit the creditor to timely file a proof of claim
or request a determination that the debt is non-dischargeable.51 When the Debtor’s
individual case was originally filed, he did not schedule the Plaintiff with a claim,
and she did not receive notice of the bankruptcy case in time to file a claim or request
that the Court determine whether the debt should be deemed non-dischargeable.

47 11 U.S.C. § 105 (A).
48 Lemelle v. Universal Mfg. Corp., 18 F.3d 1268, 1274–78 (5th Cir. 1994).
49 28 U.S.C. §§ 157 (b)(2)(B), (I).
50 Fed. R. Bankr. P. 4004(a).
51 11 U.S.C. § 523 (a) (“(a) A discharge under section 727 . . . of this title does not discharge an
individual debtor from any debt—(3) neither listed nor scheduled under section 521(a)(1) of this
title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to
permit—(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely
filing of a proof of claim and timely request for a determination of dischargeability of such debt
under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in
time for such timely filing and request . . . ”).
Thus, under § 523(a)(3), the claim could not have been discharged by the 2024
discharge order.

But now the Debtor’s individual case is reopened, and the Debtor has
scheduled the Plaintiff with a (disputed) claim. 52 Thus, the Court has core
jurisdiction to determine whether the claim should be allowed and, if requested,
whether it should be deemed non-dischargeable.53

1. The Court lacks jurisdiction over the claims against Haley Miller.

i. “Literal related to jurisdiction” is not a thing, and the claims
against Haley Miller are not “related to” the bankruptcy.

Although the Defendants do not address jurisdiction in depth in their
pleadings, they assert, rather creatively, that the Court has jurisdiction over Haley
Miller because she is literally “related to” the Debtor, through their marriage. But as
discussed above, § 157(c) allows bankruptcy courts to hear “a proceeding that is not
a core proceeding but that is otherwise related to a case under title 11.”54 Haley
Miller is obviously not “a case under title 11” and her relationship to the Debtor
alone is not sufficient to confer jurisdiction over the claims against her on this Court.

While it is true that the traditional formulation of related to jurisdiction is
“whether the outcome of a proceeding could conceivably have any effect on the
estate being administered in bankruptcy,” a bankruptcy court’s “related to”
jurisdiction is not limitless. 55 “An 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.”56

Unfortunately for the Defendants, their proposed “literal related to doctrine”
has no basis in law, and it would sweep far too wide. Applying bankruptcy

52 See Case No. 24-11038, ECF No. 46 (order reopening case) and ECF No. 52 at 15 (amended
Schedule F adding Julie Miller’s claim as contingent and disputed).
53 See Fed. R. Bankr. P. 3002(c)(3) (allowing a creditor to file a proof of claim 30 days after entry
of a final judgment against the debtor).
54 28 U.S.C. § 157 (c)(1).
55 PFO Global, Inc., 26 F.4th at 252 (quoting In re Prescription Home Health Care, Inc., 316 F.3d
542, 547 (5th Cir. 2002)).
56 Galaz v. Galaz (In re Galaz), 765 F.3d 426, 430 (5th Cir. 2014) (quoting Walker v. Cadle Co.
(In re Walker), 51 F.3d 562, 569 (5th Cir. 1995)).
jurisdiction over individuals solely because of their relationship with the Debtor
would go much too far. For instance, while it is certainly “conceivable” that a lawsuit
against an adult child would have an “effect” on most parents, due to their love for
their child and perhaps even due to material support they might feel obligated to
provide for their child, the lawsuit would not for that reason be “related to” the
bankruptcy case of the parents. While the Court acknowledges the ingenuity of
debtor’s counsel in trying to forge a new scope of the meaning of “related to,” that
effort must fail.

Instead, the Court must apply the more traditional “related to” analysis and
consider whether the claims against Haley Miller could conceivably impact the
handling or administration of the Debtor’s bankruptcy estate. At this point, aside
from the Plaintiff’s claim, the Debtor’s chapter 7 bankruptcy case has been fully
administered. It was reopened solely for the purpose of scheduling the claim and
removing the State Court Petition to this Court. As discussed above, the Plaintiff
now has an opportunity to file a claim and seek a non-dischargeable judgment—
although she has yet to file a claim or seek such relief in this Court. If the Plaintiff
files a claim and successfully obtains a non-dischargeable judgment against the
Debtor and also obtains a judgment against Haley Miller, it is conceivable that using
community marital property to pay the judgment against Haley Miller might make
it more difficult for the Debtor to pay his own non-dischargeable debt. But the
Debtor’s ability to pay that debt would still not affect the bankruptcy estate because
it does not involve estate assets or liabilities. And so, regardless of how such
hypothetical non-dischargeability litigation might turn out, awarding a judgment
against Haley Miller could not alter or otherwise impact the bankruptcy estate.

Therefore, the Court cannot exercise “related to” jurisdiction over the claims
asserted against Haley Miller, even though she is “actually related to” the Debtor.

ii. In the Fifth Circuit, bankruptcy courts cannot exercise
supplemental jurisdiction.

Where claims in a proceeding are so related that they form part of the same
case or controversy, some bankruptcy courts have applied 28 U.S.C. § 1367 to
exercise supplemental jurisdiction over such claims even if they do not fall under
their “related to” jurisdiction.57

57 28 U.S.C. § 1367 (a) (“[I]n any civil action of which the district courts have original jurisdiction,
the district courts shall have supplemental jurisdiction over all other claims that are so related to
In the abstract, this case would be a plausible contender for the exercise of
such jurisdiction. The claims against Haley Miller, while elaborated only very thinly
in the Plaintiff’s Petition, appear very thoroughly factually intertwined with the
claims against the Debtor.

But the Fifth Circuit 58 and many other courts 59 reject the exercise of
supplemental jurisdiction by bankruptcy courts because § 1367 only expressly
applies to district courts and § 157, the more specific statute governing bankruptcy
jurisdiction, does not extend supplemental jurisdiction to bankruptcy courts. This
Court is, of course, bound by Fifth Circuit precedent. Therefore, the Court cannot
exercise supplemental jurisdiction over the Haley Miller claims.

claims in the action within such original jurisdiction that they form part of the same case or
controversy under Article III of the United States Constitution. Such supplemental jurisdiction
shall include claims that involve the joinder or intervention of additional parties.”). See, e.g.,
Montana v. Goldin (In re Pegasus Gold Corp.), 394 F.3d 1189, 1195 (9th Cir. 2005); Century 21
Real Estate, LLC v. Prestige Realty Grp. of Ohio & Florida, LLC (In re Prestige Realty Grp. of
Ohio & Florida, LLC), 420 B.R. 894, 898–900 (Bankr. S.D. Fla. 2009) (exercising supplemental
jurisdiction over a non-debtor defendant in an adversary proceeding where the claims arose “from
the same core of facts”); Hosp. Ventures/LaVista v. Heartwood 11, L.L.C. (In re Hosp.
Ventures/LaVista), 358 B.R. 462, 474–81 (Bankr. N.D. Ga 2007) (exercising supplemental
jurisdiction over matters that have “a nexus with a primary claim arising under the Bankruptcy
Code within the district court’s jurisdiction”); Pierce v. Conseco Fin. Servicing Corp. (In re
Lockridge), 303 B.R. 449, 455 (Bankr. D. Ariz. 2003) (“Thus even if bankruptcy jurisdiction did
not exist under § 1334, supplemental jurisdiction may exist under § 1367 if the state law claims
are so related. But the use of the identical term ‘related to’ in both § 1334 and §1367 also suggests
that supplemental jurisdiction is what Congress always intended when it used that term in
§ 1334.”). 58 Walker, 51 F.3d at 572–73 (“Simply put, even assuming that a district court could exercise
jurisdiction supplemental to its bankruptcy jurisdiction described in 28 U.S.C. § 1334, there is
nothing in the jurisdictional statutes to indicate that the district court could refer such a case to a
bankruptcy court.”).
59 See, e.g., Halvajian v. Bank of New York, N.A., 191 B.R. 56, 58–59 (D.N.J. 1995); Samson Res.
Co. v. J. Aron & Co. (In re SemCrude, L.P.), No. 09-52530, 2010 WL 5140487, at *18 (Bankr. D.
Del. Dec. 13, 2010); Scully v. Danzig (In re Valley Food Servs., LLC), 400 B.R. 724, 728–30
(Bankr. W.D. Mo. 2008); Enron Corp. v. Citigroup, Inc. (In re Enron Corp.), 353 B.R. 51, 59–63
(Bankr. S.D.N.Y. 2006); Dawson v. J&B Detail, L.L.C. (In re Dawson), No. 05-1463, 2006 WL
2372821, at *6 n.2 (Bankr. N.D. Ohio Aug. 15, 2006), aff’d sub nom. Dawson v. J & B Detail,
L.L.C., No. 106CV1949, 2006 WL 3827459 (N.D. Ohio Dec. 27, 2006).
B. Plaintiff failed to state a claim upon which relief can be granted against
the Lane Firm.

Defendants bring their Motion to Dismiss under Federal Rule of Civil
Procedure 12(b)(6), made applicable to this adversary proceeding via Federal Rule
of Bankruptcy Procedure 7012. To survive a Rule 12(b)(6) motion to dismiss, a
plaintiff’s complaint must both “describe the claim in enough detail to give fair
notice of the claim and the grounds for it” and “state a claim ‘plausible on its face,’
meaning the plaintiff’s right to relief must rise above a ‘speculative level.’”60 In
making this determination, the Court must accept all of plaintiff’s allegations as
true.61

It is difficult to determine from the face of the pleadings exactly which
allegations Plaintiff intends to bring against the Lane Firm.62 However, the Lane
Firm is mentioned in the sections of the complaint discussing common law fraud,63
conspiracy,64 unjust enrichment,65 and conversion.66

As a preliminary matter, and for the avoidance of doubt, Defendants’ Motion
to Dismiss is granted with prejudice as to the Lane Firm for the fraudulent
inducement and fraud by misrepresentation claims, as the Lane Firm is not even
mentioned in those sections of the live pleading.67

60 Curtis v. L. Off. Of Rogelio Solis PLLC (In re Josiah’s Trucking, LLC), 645 B.R. 208, 214
(Bankr. S.D. Tex. 2022) (footnotes omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570, 555 (2007)). Stated otherwise, the plaintiff must satisfy the pleading requirements of Federal
Rule of Civil Procedure 8(a)(2), made applicable to this adversary proceeding by Federal Rule of
Bankruptcy Procedure 7008.
61 Ballard v. Wall, 413 F.3d 510, 514–15 (5th Cir. 2005) (citing Moore v. Carwell, 168 F.3d 234,
236 (5th Cir. 1999)).
62 See generally Pl.’s Compl., ECF No. 1.
63 ECF No. 1-2 at 6 (“The Defendant law firm falsely asserted that this money had been noticed in
the business bankruptcy, they knew or should have known which assets were included in the
Bankruptcy.”).
64 Id. at 7 (“Lane Law Firm was paid with proceeds of the money Plaintiff provided to Defendant
Miller that he misrepresented as a loan.”).
65 Id. at 8 (referring to “legal fees to Defendant Law Firm”).
66 Id. (“Miller then referred Plaintiff’s counsel to his bankruptcy lawyers who misrepresented the
debt had been discharged in Bankruptcy.”).
67 See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (stating that the pleading standard “demands
more than an unadorned, the-defendant-unlawfully-harmed-me accusation” (citing Twombly, 550 U.S. at 555)).
Plaintiff’s remaining allegations against the Lane Firm do not fare much
better. In Texas, the attorney immunity doctrine is a “comprehensive affirmative
defense protecting attorneys from liability to non-clients.”68 Generally, under Texas
law, “attorneys are immune from civil liability to non-clients ‘for actions taken in
connection with representing a client in litigation.’”69 However, an attorney is “not
protected from liability to non-clients for their actions when they do not qualify as
‘the kind of conduct in which an attorney engages when discharging his duties to his
client.’”70 Here, Plaintiff has not asserted that she was ever a client of the Lane Firm.
Therefore, the Lane Firm could only plausibly be held liable for damages arising
from “wrongful conduct outside the scope of representation.”71

In her common law fraud claim, Plaintiff asserts that the Lane Firm “falsely
asserted that [the alleged loan] had been noticed in the business bankruptcy” and that
it “knew or should have known which assets were included in the Bankruptcy.”72
Even accepting Plaintiff’s allegations as true, fraud within the scope of client
representation is not excepted from attorney immunity.73 Communications with a
potential creditor in a client’s bankruptcy case are certainly within the scope of client
representation.74 Further, even if the attorney immunity doctrine was not at play, this
claim could not succeed because the Plaintiff could not prove that she “actually and
justifiably relied upon the representation” due to the general principal that “a third
party’s reliance on an attorney’s representation is not justified when the

68 Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015).
69 Id. at 481 (quoting Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405 (Tex. App.—
Houston [1st Dist.] 2005, pet. denied) (collecting cases).
70 Id. at 482 (quoting Dixon Fin. Servs., Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C.,
No. 01-06-00696-CV, 2008 WL 746548, at *9 (Tex. App.—Houston [1st Dist.] March 20, 2008,
pet. denied) (mem. op. on reh’g)).
71 Id. at 484.
72 ECF No. 1-2 at 6.
73 See Cantey Hanger, LLP, 467 S.W.3d at 484. The Court also notes that the federal pleading
standards require a party to “state with particularity the circumstances constituting fraud.” Fed. R.
Civ. P. 9(b), made applicable to this case by Fed. R. Bankr. P. 7009. Plaintiff did not do so.
74 See, e.g., Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 408 (Tex. App.—Houston [1st
Dist.] 2005, pet. denied) (characterizing “the filing of lawsuits and pleadings, the providing of
legal advice upon which the client acted, and awareness of settlement negotiations” as “acts taken
and communications made to facilitate the rendition of legal services”); see also White v. Bayless, 32 S.W.3d 271, 275–77 (Tex. App.—San Antonio 2000, pet. denied) (affirming summary
judgment in attorneys’ favor in case alleging conspiracy to commit fraud involving bankruptcy
filings).
representation takes place in an adversarial context.”75 Therefore, Defendants’
motion to dismiss is granted with prejudice as to the common law fraud claim against
the Lane Firm.

Plaintiff’s conversion claim appears to have little if anything to do with the
Lane Firm. It merely alleges that “[Debtor] then referred Plaintiff’s counsel to his
bankruptcy lawyers who misrepresented the debt had been discharged in
Bankruptcy.”76 Under Texas law, the elements of conversion are:
(1) the plaintiff owned or had possession of the property or entitlement
to possession; (2) the defendant unlawfully and without authorization
assumed and exercised control over the property to the exclusion of, or
inconsistent with, the plaintiff’s rights as an owner; (3) the plaintiff
demanded return of the property; and (4) the defendant refused to return
the property. The plaintiff must also prove damages that are the
proximate result of the defendant’s conversion.77
Plaintiff has not alleged any conduct by the Lane Firm that could potentially satisfy
these elements. Therefore, the conversion claim against the Lane Firm is likewise
dismissed with prejudice.

Plaintiff’s unjust enrichment and conspiracy claims against the Lane Firm
simply allege that the Lane Firm was paid with money allegedly obtained by Debtor
via unscrupulous means.78 The Court will address each in turn.

Whether unjust enrichment exists as an independent cause of action is
somewhat unsettled in Texas.79 However, the doctrine has been summarized by the
Court of Appeals in Texarkana as follows:

75 See JPMorgan Chase Bank, N.A. v. Orca Assets, G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018)
(quoting Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001)) (listing
the elements of fraud); McCamish, Martin, Brown & Loeffler v. F.E. Appling Ints., 991 S.W.2d
787, 794 (Tex. 1999) (collecting cases) (discussing reliance on opposing counsel’s statements).
76 ECF No. 1-2 at 8.
77 Senior Care Living VI, LLC v. Preston Hollow Cap., LLC, 695 S.W.3d 778, 816 (Tex. App.—
Houston [1st Dist.] 2024, pet. denied) (citations omitted) (citing Cypress Creek EMS v. Dolcefino, 548 S.W.3d 673, 684 (Tex. App.—Houston [1st Dist.] 2018, pet. denied)).
78 See ECF No. 1-2 at 7 (“Lane Law Firm was paid with the proceeds of the money Plaintiff
provided to Defendant Miller that he misrepresented as a loan.”); id. at 8 (alleging that “Defendants
used Plaintiff’s money” for “legal fees to Defendant Law Firm”).
79 See, e.g., Ed & F Man Biofuels Ltd v. MV FASE, 728 F.Supp.2d 862, 869–70 (S.D. Tex. 2010)
(contrasting the Texas Supreme Court’s implication that unjust enrichment is a separate cause of
action with other Texas courts’ conclusions that it is but a theory of liability (collecting cases)).
The unjust enrichment doctrine applies the principles of restitution to
disputes which for one reason or another are not governed by a contract
between the contending parties. When a defendant has been unjustly
enriched by the receipt of benefits in a manner not governed by
contract, the law implies a contractual obligation to restore the benefits
to the plaintiff. Unjust enrichment is typically found under
circumstances in which one person has obtained a benefit from another
by fraud, duress, or the taking of an undue advantage.80
Here, Plaintiff’s pleading has not sufficiently alleged any way that the Lane Firm
has been unjustly enriched nor any benefit that this Court could plausibly restore to
the Plaintiff. It is not alleged that the Lane Firm received anything from Plaintiff,
rather merely that their client, the Debtor, paid them “legal fees.” Therefore,
Plaintiff’s claim of unjust enrichment is dismissed with prejudice.

In Texas, “civil conspiracy is a theory of vicarious liability and not an
independent tort.”81 It follows that an underlying tort is required to be alleged for a
conspiracy to exist.82 Plaintiff’s pleading simply fails to allege an underlying tort for
which the Lane Firm could be held liable. Therefore, Plaintiff’s claim of conspiracy
is dismissed with prejudice.

The Court will decline to allow Plaintiff to amend her complaint in an attempt
to sufficiently plead these allegations against the Lane Firm. “An ‘amendment is
futile if it would fail to survive a Rule 12(b)(6) motion.’”83 As discussed above, there
is no way that Plaintiff could succeed on any of her claims against the Lane Firm.
Therefore, all claims against the Lane Firm are dismissed with prejudice.

80 Burlington N. R.R. Co. v. Sw. Elec. Power Co., 925 S.W.2d 92, 96 (Tex. App.—Texarkana,
1996) (citations omitted).
81 Agar Corp., Inc. v. Electro Cirs. Int’l, LLC, 580 S.W.3d 136, 142 (Tex. 2019).
82 Id. at 142 (“Civil conspiracy requires an underlying tort that has caused damages.” (citing Tilton
v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996))). Cf. id. at 141 (“Civil conspiracy depends entirely
on the injury caused by the underlying tort; the injury is the damage from the underlying wrong,
not the conspiracy itself.” (citing Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 856 (Tex. 1968))).
83 CH Offshore, Ltd. v. Mexiship Ocean CCC S.A. de C.V., 163 F.4th 171, 184 (5th Cir. 2025)
(quoting Marucci Sports, L.L.C. v. Nat’l Collegiate Athletic Ass’n, 751 F.3d 368, 378 (5th Cir.
2014)).
C. The Court will permissively abstain from deciding the claims against
John Miller and will remand them to state court.

While it is sometimes true that a bankruptcy court must abstain from
considering certain state law claims,84 a court may choose to abstain “in the interest
of justice, or in the interest of comity with State courts or respect or State law”85
even if it has core jurisdiction over the claims. Given that the Court does not have
jurisdiction over Haley Miller and the remaining claims against the Debtor are state
law claims, the Court must consider whether to abstain from the claims against the
Debtor and remand them to state court.

Here, the claims against the Debtor and the claims against Haley Miller are
all but identical, and they arise out of the same factual circumstances. As established
above, the Court has no jurisdiction over Haley Miller. Therefore, the Court finds
that it is in the interest of justice and judicial efficiency to permissively abstain under
§ 1334(c)(1) and remand those claims to the state court for determination.86 If the
Plaintiff is awarded a judgment against the Debtor, she may file a claim in this Court
and seek a dischargeability determination at that time.87

Conclusion

For the reasons stated herein, the Court finds that it should dismiss the claims
against the Lane Firm with prejudice and abstain and remand the claims against the
Debtor and Haley Miller for determination by the state court. As these remaining
claims are being remanded to state court, the Court also finds that this adversary
proceeding should be dismissed. If the Plaintiff successfully obtains a judgment
against the Debtor in the state court action, she may come back to this Court and
seek a non-dischargeability determination at that time.

IT IS THEREFORE ORDERED that the claims against the Lane Firm are
dismissed with prejudice.

84 See 28 U.S.C. § 1334 (c)(2).
85 28 U.S.C. § 1334 (c)(1).
86 See generally Parkhouse v. Johnson (In re Johnson), No. 11-06020-CAG, 2012 WL 1110342,
at *5 (W.D. Tex. Bankr. Apr. 2, 2012) (discussing non-exhaustive factors the court may consider
when deciding whether to permissively abstain).
87 See Fed R. Bankr. P. 3002(c)(3).
IT IS FURTHER ORDERED that the Court abstains and remands all
remaining claims in this proceeding to state court.

IT IS FURTHER ORDERED that this adversary proceeding is hereby
dismissed.

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