Case Summary:
The Debtors filed an adversary proceeding to avoid the defendant’s mortgage. They alleged that the mortgage was invalid due to unconscionability, lack of consideration, mistake, misrepresentation, unjust enrichment, breach of contract, and breach of the duty of good faith and fair dealing. The defendant argued that the court lacked the constitutional authority to rule on these claims under Stern v. Marshall, __ U.S. __, 131 S. Ct. 2594 (2011). The court found that the debtors’ claims all related to issues which would be resolved in the process of adjudicating the defendant’s claim, which would not be an allowed secured claim until the debtors’ claim objection (and their adversary proceeding, which was the vehicle for resolving the objection) was resolved. The request to dismiss the adversary proceeding was denied.

Statute/Rule References:
28 U.S.C. § 157(b)(2) -- Core Proceeding

Key Terms:
Constitutional Authority of Article I Court
Core Proceedings