Robert A. Sikes and Janice K. Sikes v. Global Marine, Inc.
881 F.2d 176
5th Cir.
1989
Check Treatment

*1 REAVLEY, Circuit Judge, specially

concurring: plaintiffs complain only of GM’srep- resentations to persuade them individually to choose the payment. severance GM does not any demonstrate relationship be- tween the VTEP and its decision not to rehire the plaintiffs. I concur in the judg-

ment.

Background 1986, suit Sikes filed March

On for other defendants and Global against A. by Robert sustained allegedly injuries 12, 1983, aboard April while on Sikes III. ISLAND HIGH GLOMAR M/V vessel Sikes, January on to the Unbeknownst in voluntary petitions had filed Global the Bank- Chapter 11 of bankruptcy under their consequence, a As Code. by 11 stayed automatically was claim 362(a).1 U.S.C. § from sought relief promptly The Sikes bankruptcy from the for the time court, an extension and the district complaint from service three-year limita- Accrual court. in objected Global imminent. was tions for of time to the extension district com- original that the service, contending bankrupt- null void. In plaint was stay not be that the asked court Global cy Tex., plain- Houston, Bain, W. Bruce coverage dis- aof resolution until modified tiffs-appellants. Global their carriers. pute with insurance McDaniel, Hardie, E. Marion Susan M. lift- stay not be that the requested further Tex., defendants-appel- Houston, Jr., debtor-in-pos- their transition pending ed lees. status. session Global later months Approximately nine dispute insurance resolved On a modification POLITZ, RUBIN, Before an entered 18, 1987, JOHNSON, Judges. Circuit listed 32 causes stay for lifting the order, all attached to A on Exhibit POLITZ, Judge: Circuit motions for which as matters identified ap- K. and Janice A. Sikes Robert lifted The order pending. stay were lift a Fed.R.Civ.P. granting judgment peal a of allow- stay “for the against demands 12(b)(6) of their dismissal to be commenced ing certain Marine, Global Marine Inc. and Global discovery to allowing against Global Global) on (collectively, Company Drilling claim The Sikes’ proceed in actions.” was complaint filed their ground In a Exhibit A. 27 on number listed as bankrupt- claims, suit number other significant Concluding that the 362(a). cy, U.S.C. § peti- Chapter after the filed been had filing and validated bankruptcy court Shortly thereafter filed. were tions their with authorized on Global. was served original and remand. reverse we complaint, administrative, cial, proceeding or other 362(a), provides: part, U.S.C. § 1. 11 could have or against the debtor (b) of provided in subsection (a) Except as commencement before the been section, petition under section filed title, or to recover under this the case stay, operates aas ... this title or 303 of arose debtor that before claim entities, (1) the com- applicable to all of— ti- under this of the case continuation, including commencement is- or mencement judi- tle. ... process, of a employment of or suance Global moved to dismiss the Sikes com- voided cured. Black’s Law Dictionary, (5th 1979); Oliver, original plaint, contending that com- 1411 ed. In re 38 B.R. *3 (Bankr.Minn.1984). plaint early of We was filed in violation the automat- 245 observed Wilczinski, (5th stay ic thus null and The in 143 27 Haggart and was void. F. Cir.1906), accuracy filed a lawsuit and that when new moved “technical is desired, the opposed only proper- consolidation. Global consolida- term ‘void’can be grounds ly applied tion on the that the second com- to those ... that [transactions] whatsoever, nullities, plaint limita- are was barred the statute of of no effect mere tions. incapable ... and therefore of confirmation or ratification.”

On 1987 prepared entered an The distinction between the terms is Global, modifying precise practical counsel for the automat- much less and clear in stay. preamble usage. considering ic The to the order an- Courts whether actions nounced: “CAME ON FOR in stay CONSIDERA- taken violation of the automatic are hearing TION the various motions to void opposite or voidable have reached con lift the automatic to allow clusions. Some courts have concluded that forward, go actions to as identified actions violate the automatic void, A in Exhibit attached hereto.” The Sikes’ therefore incurable. Miller v. exhibit, Baltimore, Savings claim is listed as number 26 on Bank 10 B.R. 778 (Bankr.D.Md.1981); containing this time Cory. claims. The order Advent v. Fidel Deposit ity & Company declared Maryland, (Bankr. Cir.1982); B.R. 612 1st 2 Collier provided by that the automatic as (15th 1979) (cit on Bankruptcy, 362.11 ed. Bankruptcy section of the Code be ing cases which hold that actions taken in regard further with modified to those are void and without Stay Motions Lift identified in Exhibit effect). Other courts have concluded that A for the of allowing voidable, merely violative actions are personal injury actions identified therein capable discretionary cure. In re against Global, be permit- Supply Inc., Fuel Terminaling, Oil ting personal injury actions that are (Bankr.N.D.Tex.1983); 30 B.R. 360 In re pending proceed, Global to allow- Oliver; Brooks, (9th In re 79 B.R. 479 ing discovery actions, in those 1987); Cir.BAP In Sapp, re 91 B.R. 520 and allowing proceed. trials to (Bankr.E.D.Mo. 1988). prohibited any attempts to en- force any judgment persuaded or collect on We are without better rea- approval further of the court. soned rule characterizes acts taken in viola- tion of the automatic stay as voidable rath- In urging the motions to dismiss Global er agree than void. We that “the charac- maintained that the orders bankrupt- every terization of violation of section 362 cy court did not filing, validate the earlier as being absolutely void is inaccurate and filing that a new was necessary. After overly broad.” Fuel Oil Supply, B.R. granting Global’s motions to dismiss the at 362. district requisite court made the Fed.R. 54(b) Civ.P. determination and the Sikes 362(d) In Congress section empow appealed. grant ered the court to relief from the stay “by automatic terminating, annulling, Analysis modifying, or conditioning”

A threshold consideration power is wheth to annul authorizes retroactive relief filing er the complaint in viola even unto the date filing tion of the void, petition is in the giving rise to the automatic stay. term, strict sense of that merely power voida The to annul authorizes the court to By ble. strict definition that which is void validate actions taken subsequent to the nugatory noof effect and cannot be impressing 362(a) section Our cured; that which may is voidable be colleagues either in the Eleventh Circuit reached specific Partners, man- or inconsistent with less Albany in In re this conclusion Cir.1984) (11th declaring 362(a). reject al- Ltd., We both F.2d 670 date section 362(d) concluding that section a com- ternatives unknowing grants bankruptcy plaint courts the expressly relief, fashioning voidable, option, appropriate stay is void.2 “annulling” stay, in ad- the automatic Having initial fil concluded “terminating” merely it. dition merely void “annulling” provision ing in this evi- of the Sikes word power of contemplates able, bank- the bank dently we must determine whether *4 grant relief from the courts to ruptcy filing the ruptcy court intended to validate effect; other- retroactive stay which has conclude original complaint. the We inclusion, “terminating,” next to its wise Feb entering it did. In its orders on that superfluous. be would 18, 25, ruary again and on 1987 one agree. 1987, So does bankruptcy at We the court referred to 749 F.2d 675. authority: secondary preeminent stay motions lift those cases in which to “ter- power to identi obvious had been filed. Those cases were In addition to the 362(d)] gives also stay, the minate” fied name of the claimants and the [§ power “an- bankruptcy court the to the and claimants’ counsel. names addresses of The difference between stay. the nul” specifically court allowed actions to annulling the an order two is that the pending actions commence and allowed to retroactively the to operate stay could assume, absent proceed. We are bound to filing petition of the of the date contrary, the that demonstration to clear stay, thus gave to validate rise the bankruptcy court was aware of the the at time party the taken filing respective complaints. date the of the may have been unaware when he filing the com date of Sikes Aware stay. On the other existence permitted it bankruptcy the court to plaint, terminating hand, the an order proceed. only operative from the date be would an recognize that the en We was entry. its not one which did differentiate globo Manual, Bankruptcy 362.06 § Collier’s yet not between claims filed those 1983). (3d ed. filed, complaints served and not find the fact We instructive iden- The order authorized the yet served. specifically protects cer- Bankruptcy Code “commence,” forward,” “go to tified claims in violation of the auto- tain actions taken orders, perceive we “proceed.” As some trans- stay. matic Under section 549 appropriate applica- they contemplated an will be actions made in violation of case, eliminating necessity to each tion valid voided at trustee’s deemed unless February, in- separate orders for 32 (“the trustee discretion. U.S.C. § September. to 45 orders creased may property avoid a transfer complaint they the Sikes filed their When estate—(1) occurs after the commence- petitions. bankruptcy were unaware ”). 542(c)rati- ment of the case ... Section learning stay they Upon of the automatic having by parties fies no knowl- transfers stay. for relief from the moved court bankruptcy edge case. U.S.C. bankruptcy granted court that relief. 542(c). everything post-petition If done § word, find the court’s intent clear—it was We in the strict sense of were void judg- meaning- these claims provisions permitting these would either be Supreme today Court Kalb in bank- does conflict the ruptcy decided Our decision not with the Feuerstein, statutory power holding express had the Supreme in Kalb v. referees Court’s 433, 343, 346, modify only or terminate U.S. 60 S.Ct. 84 L.Ed. 370 (1940), involving post-petition power had property real to annul the not been autho- action, Accordingly, rized. where foreclosure where the Court stated: statutorily proscribed applica- County an was was action of the Walworth Court "[T]he exist, exception merely beyond power, not did the violative action not void, erroneous but was its ble longer subject applies. void. no to collateral attack.” When That scenario ment. We decline to accept argu- Global’s tioning” agreement While in ment that the order merely allowed the with the proposition that a bankruptcy permission to refile complaint. their may court validate an otherwise void filing perceive We no valid to be served stay, I am by requiring that the Sikes pa- persuaded file more that such was the intent of the pers with already burdened court. Nor bankruptcy court in the instant case for the prepared we to burden the following Sikes with reasons. adverse effects flowing any from impreci- After parties several petitioned the bank- language sion of the order which court for relief from the automatic prepared. Global stay triggered by by Global for We hold the filing relief, the Sikes’ the bankruptcy court, pursuant was a voidable action to an and that order entered on the bankruptcy had option modified the automatic validate it. We further “for hold that the limited purpose bank- of allowing ruptcy validated the filing [certain] when it actions ... to be *5 granted the Sikes against relief from commenced in its Global and allowing of order discovery to as restated and in those actions.” reinforced in its Among personal of those September 25, injury actions al- lowed to be the February 18 order, as identified in the attachment to We REVERSE and REMAND for fur- order, personal the injury action proceedings ther consistent herewith. of against Global. In so identify- ing the action of the JOHNSON, Sikes in the February Circuit Judge, dissenting: order, however, the bankruptcy court In entering agreed its orders modifying did not refer to the cause number of the automatic in the case, instant previous complaint filed the Sikes in bankruptcy court, in its first allowed automatic There- commencement certain personal inju- after, the bankruptcy court entered anoth- ry against actions and, debtor Global agreed er order on September 25, 1987, subsequent its order, allowed those actions further modifying the automatic stay for to proceed forward. The majority today purpose of allowing “personal that, concludes on the basis of the above injury actions that are pending against orders, the bankruptcy court validated the Global to proceed, allowing discovery to otherwise void proceed in actions, and allowing trials complaint of the Sikes in violation of the proceed.” Contrary to the conclusion automatic Persuaded that the above reached by the majority today, I per- am conclusion interprets broadly too the rele- suaded that express language of the vant orders of the bankruptcy court and February 18 order of the bankruptcy court contravenes the fundamental purpose un- only allowed the commencement of per- derlying the automatic in bankruptcy, sonal injury Global. There- I respectfully dissent. after, 25 order allowed the general, In “[ajcts in violation of the previous continuation of personal injury ac- stay are [automatic] void ab regard initio tions already validly filed against Global less of lack of knowledge of the filing of by virtue of the earlier modification of the the petition.” Matter J & L Transport, automatic stay by the February 18 order. Inc., 47 B.R. 52-58 (Bkrtcy.W.D.Wis. In regard, this orders of the 1985). majority, however, states bankruptcy court did not relate back to the such acts are in some instances voidable, initial filing by the Sikes of their complaint void, instead by virtue of the express in violation automatic val- powers granted bankruptcy court in idate that filing. To infer such a radical 362(d) Section of the Bankruptcy Code to form of relief from the limited actions of grant relief from the automatic stay “by the bankruptcy court contravenes a funda- terminating, annulling, modifying, or condi- mental purpose of the provide being to bankruptcy —that creditors from his relief debtor with efforts. collection

and their say that not This void otherwise validate may never so; major- to do choose it filings should powers ably sets forth ity opinion regard. in this bankruptcy court imply not should Nevertheless, this Court stay in the automatic relief from such the bank- intent express of an absence If the relief. afford case had instant in the bankruptcy court filings void otherwise to validate intended stay, it could in violation relief for such provided expressly have language specific through the inclusion do did It in its orders. effect to such dissent. respectfully I Accordingly, so. *6 INSUR- & LOAN FEDERAL SAVINGS CORP., for Sunbelt Receiver ANCE F.S.B., Plaintiff-Appel- Bank, Federal lant, LTD., al., VENTURES, et TRI-PARISH Defendants-Appellees.

No. 88-3435. Appeals, Court United States Fifth Circuit. Aug. La., Metairie, Jr., Lightfoot, C.

Claude plaintiff-appellant. Martzell, Jane Cranner, R. John A. Bruce La., Orleans, defen- Ettinger, New dants-appellees.