A bankruptcy dispute stays in bankruptcy court, not moved to federal district court.
Jacqueline Elizabeth Ard Terry Frank Nicola v. The Spa On Port Royal Sound
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A bankruptcy dispute stays in bankruptcy court, not moved to federal district court.
Why it matters
In Jacqueline Elizabeth Ard and Terry Frank Nicola v. The Spa on Port Royal Sound et al., the U.S. District Court for the District of South Carolina denied the plaintiffs' motion to withdraw reference, meaning the adversary proceeding will remain before the Bankruptcy Court rather than being transferred to the district court. The court adopted the Magistrate Judge's Report and Recommendation, which found the motion was moot, that mandatory withdrawal was not established, and that discretionary withdrawal was also not warranted. Because no objections to the Magistrate Judge's Report were filed, the district court reviewed only for clear error and found none.
Who it affects
The two pro se plaintiffs in this case are directly affected, as their dispute will proceed in Bankruptcy Court rather than the district court. Parties in bankruptcy-related adversary proceedings who seek to move their cases to federal district court may look to this ruling as an example of the burden they must meet to succeed on such a motion.
What happens next
Current
Decision issued Aug 28, 2026
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Parties can ask the same court to reconsider. Then: possible appeal to the circuit court.
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- Decision issued Aug 28, 2026
- Possible rehearingParties can ask the same court to reconsider.
- Possible appeal to the circuit court
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Aug 28, 2026
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DEEPER READ
The central question in this case was whether an adversary proceeding pending in the U.S. Bankruptcy Court for the District of South Carolina should be transferred, or 'withdrawn,' to the federal district court. The two plaintiffs, representing themselves without an attorney, filed the motion seeking that transfer. The district court denied the motion, agreeing fully with the Magistrate Judge's prior analysis. The Magistrate Judge had identified three separate reasons to deny the motion: first, the motion was moot; second, the plaintiffs did not demonstrate that withdrawal was legally required under the mandatory standard; and third, the plaintiffs did not show that the court should exercise its discretion to allow withdrawal even if it were optional. Because the plaintiffs did not file any objections to the Magistrate Judge's Report and Recommendation within the allowed fourteen-day window, the district court was only required to check the record for clear error, rather than conduct a full independent review. Finding no clear error, the court adopted the Report and issued its denial. The case now returns to the Bankruptcy Court, where the adversary proceeding will continue. No dissent is present in this opinion, as it is a single district court judge's order. The opinion does not detail the underlying substance of the dispute between the parties beyond the procedural question of which court should hear it.
CITATION AND RECORD
Record source: CourtListener
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA Jacqueline Elizabeth Ard, Terry Frank ) Nicola, ) Civil Action No. 9:26-cv-425-BHH ) Plaintiffs, ) ) v. ) ) ORDER The Spa on Port Royal Sound ) Horizontal Property Regime; William B. ) Mullis; Henry Sanders; Keith Baker; ) Jane and John Doe, Board Members ) of the IMC Resort Services, Inc.; ) Christine M. Phillips; John and Jane ) Doe, Employees and Agents of Scott ) M. Wild; Jannine Mutterer; Jerri Ann ) Roseneau; Lucas S. Fautua; Beaufort ) County; Beaufort County Treasurer’s ) Office; Beaufort County Assessor’s ) Office; Robert J. Bonds; Scott Matthew ) Wild; IMC Resort Services, Inc., ) ) Defendants. ) ________________________________ ) This matter is before the Court on the motion to withdraw reference as to an adversary proceeding in the United States Bankruptcy Court for the District of South Carolina (“Bankruptcy Court”), filed by pro se Plaintiffs Jacqueline Elizabeth Ard and Terry Frank Nicola (“Plaintiffs”). (ECF No. 1.) Defendants filed memoranda in opposition to Plaintiffs’ motion, and in accordance with Local Civil Rule 73.02(B)(2), D.S.C., the matter was referred to a United States Magistrate Judge for preliminary review. (See ECF Nos. 3-6.) On July 31, 2026, the Magistrate Judge issued a Report and Recommendation (“Report”), outlining the issues and recommending that the Court deny Plaintiffs’ motion to withdraw reference and that the action remain with the Bankruptcy Court. (ECF No. 7.) In her Report, the Magistrate Judge found that the motion should be dismissed because it is moot; that, even if it is not moot, Plaintiffs have not met their burden to show that withdrawal is mandatory; and that Plaintiff also have not met their burden to show that discretionary withdrawal is warranted. (Id. at 10-16.) Attached to the Magistrate Judge’s Report was a notice advising the parties of the right to file written objections to the Report within fourteen days of being served with a copy. To date, no objections have been filed. The Magistrate Judge makes only a recommendation to the Court. The recommendation has no presumptive weight, and the responsibility to make a final determination remains with the Court. Mathews v. Weber, 423 U.S. 261 (1976). The Court is charged with making a de novo determination only of those portions of the Report to which specific objections are made, and the Court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1). In the absence of specific objections, the Court reviews the matter only for clear error. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (stating that “in the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.’”) (quoting Fed. R. Civ. P. 72 advisory committee’s note). Here, because no objections to the Report have been filed, the Court has reviewed the record, the applicable law, and the findings of the Magistrate Judge for clear error. After review, the Court finds no clear error and fully agrees with the Magistrate Judge’s analysis. Accordingly, the Court adopts and specifically incorporates the Magistrate 2 Judge’s Report (ECF No. 7), and the Court denies Plaintiffs’ motion to withdraw reference (ECF No. 1), such that this action remains with the Bankruptcy Court. IT IS SO ORDERED. /s/Bruce H. Hendricks United States District Judge August 28, 2026 Charleston, South Carolina 3
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