Great Midwest Insurance Company v. WB Contracting Group, Inc.
3:23-cv-00680
| E.D. Va. | Dec 22, 2023Background
- Great Midwest Insurance Company (GMIC) filed a complaint against WB Contracting Group, Inc., William Bigger, and Alisa Bigger.
- William Bigger filed for Chapter 7 bankruptcy in the Eastern District of Virginia after the complaint was filed.
- GMIC notified the Court of the bankruptcy petition and indicated it had no evidence the other defendants (WB Contracting Group, Inc. and Alisa Bigger) had filed for bankruptcy.
- GMIC requested the suit proceed against non-bankrupt parties and sought default against Alisa Bigger and WB Contracting Group, Inc.
- The Court recognized an automatic stay for William Bigger under bankruptcy law but questioned if the stay should also extend to WB Contracting Group, Inc., given Bigger's sole ownership and its principal place of business being his residence.
- The Clerk was ordered to enter default against Alisa Bigger but to withhold default against WB Contracting Group, Inc. pending a further decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of automatic bankruptcy stay to co-defendants | GMIC argues the action should proceed against non-bankrupt parties | Not explicitly stated; implied that WB Contracting may be closely tied to the bankrupt debtor | Stay applies to William Bigger; Court to assess whether stay should also extend to WB Contracting Group, Inc. |
| Entry of default against non-appearing parties | GMIC requests default against Alisa Bigger and WB Contracting Group, Inc. | No defense presented; defaults have not been opposed | Default entered against Alisa Bigger; withheld against WB Contracting Group, Inc. pending stay determination |
| Relationship between WB Contracting Group, Inc. and William Bigger | GMIC highlights lack of bankruptcy filing by corporation | Court notes possible close connection (100% ownership by Bigger) | Court requires GMIC to show cause why stay should not extend to corporate entity |
| Effect of ownership interest on extension of bankruptcy protections | None presented | Not stated; Court analyzes sua sponte | Court finds the need to consider extension of stay due to possible identity of interests |
Key Cases Cited
- A.H. Robins Co., Inc. v. Piccinin, 788 F.2d 994 (4th Cir. 1986) (automatic stay generally does not extend to co-defendants, except in unusual circumstances)
- Kreisler v. Goldberg, 478 F.3d 209 (4th Cir. 2007) (extension of automatic stay to non-bankrupt parties in unusual circumstances)
- Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139 (4th Cir. 1990) (judicial notice of bankruptcy proceedings is permitted)