517 B.R. 698
Bankr. N.D. Tex.2014Background
- McLoba sought direct appeal to the Fifth Circuit of a bankruptcy court order issued July 23–24, 2014 certifying a direct appeal.
- Adkins, the debtor, objected to McLoba’s direct-appeal certification and to the underlying stay-violation ruling.
- The bankruptcy court may certify a direct appeal if four conditions under 28 U.S.C. § 158(d)(2)(A) are met; the court concluded the matter qualified.
- McLoba argued the issue was whether the automatic stay was violated by a third-party action against Adkins filed in Morton Adversary, an adversary proceeding in a related bankruptcy case.
- The court concluded Campbell does not resolve this, recognized a potential broader question, and certified the issue for direct appeal; the court also held that McLoba violated the stay and awarded Adkins damages.
- The resulting orders grant Adkins’s damages for willful stay violation and provide for an affidavit detailing attorney’s fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether McLoba’s third-party action against Adkins violated the automatic stay | McLoba contends no stay violation occurred | Adkins contends the stay was violated | Yes, the stay was violated and damages awarded |
| Whether the court should certify a direct appeal given controlling authorities | McLoba relies on Campbell to show no direct-appeal issue | Adkins argues the issue is novel and merits direct appeal | Certified for direct appeal; issue arguably depends on unique facts |
Key Cases Cited
- Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. 2008) (stay exception; statements in a proof of claim are not stay violations; prepetition claims allowed under the Code)
- In re Sammon, 253 B.R. 672 (Bankr.D.S.C. 2000) (stay does not apply to proceedings within the bankruptcy court; proof-of-claim context discussed)
- In re S.I. Acquisition, Inc., 817 F.2d 1142 (5th Cir. 1987) (alter-ego and estate claims; property of the bankruptcy estate)
- GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711 (5th Cir. 1985) (breathing spell purpose of automatic stay)
- In re Halo Wireless, Inc., 684 F.3d 581 (5th Cir. 2012) (automatic stay—debtor protection and breathing spell)