FLORIDA EASTERN DEVELOPMENT COMPANY, INC. OF HOLLYWOOD, APPELLANT,
v.
LEN-HAL REALTY, INC., ETC., ET AL., APPELLEES

Fla. 4th DCA | 1994-03-09
No. 93-2034
DELL, C.J., and ANSTEAD, HERSEY, GLICKSTEIN, GUNTHER, STONE, WARNER, POLEN, FARMER, PARIENTE and STEVENSON, JJ., concur.
636 So. 2d 756 Florida District Court of Appeal, Fourth District (1994) Negative Treatment
Cited by 5 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.


Holding

The court held that the automatic stay provisions of 11 U.S.C. § 362(a) apply on appeal when the original proceedings were against the debtor, regardless of whether the debtor is the appellant or appellee.


Headnotes

[1] The automatic stay provisions of 11 U.S.C. …

[2] An appeal by a debtor from a judgment obtained against the debtor as defendant is a continuation of a judicial proceeding against the debtor for purposes of the automatic…

Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

Appellant, a defendant in the trial court, filed a suggestion of bankruptcy after a judgment was entered against it. The court considered whether the …

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
KLEIN, Judge.

ORDER ON SUGGESTION OF BANKRUPTCY UNDER CHAPTER 11

KLEIN, Judge.

Appellant, who was a defendant in the trial court and is appealing a judgment entered against it, has filed a suggestion of bankruptcy under Chapter 11 of the Bankruptcy Code. 11 U.S.C. § 362(a)(1) of the code provides for an automatic stay of all legal proceedings “against the debtor.” We recede from a prior decision and acknowledge that there is an automatic stay under these circumstances.

In Marine Charter & Storage v. Underwriters, 568 So. 2d 944 (Fla. 4th DCA 1990), this court held that there is no automatic stay on appeal if the debtor is the appellant. This court relied on Shop in the Grove, Ltd. v. Union Federal Savings and Loan Association of Miami, 425 So. 2d 1138 (Fla. 3d DCA 1982), in which the third district reasoned that an appeal is not a proceeding “against the debtor” if the debtor is the appellant. This court certified the issue in Marine as one of great public importance, but the case did not go to the supreme court.

Although there was a dearth of law on the subject at the time Shop in the Grove was decided in 1982, beginning with Association of St. Croix Condominium Owners v. St. Croix Hotel, 682 F. 2d 446 (3d Cir.1982), all federal circuit courts considering the issue have held that there is an automatic stay, where the original proceedings were “against the debtor,” regardless of whether the debtor is the appellant or the appellee on appeal. Farley v. Henson, 2 F. 3d 273 (8th Cir.1993); Sheldon v. Munford, Inc., 902 F. 2d 7 (7th Cir.1990); Ingersoll-Rand Fin. Corp. v. Miller Mining Co., 817 F. 2d 1424, 1426 (9th Cir.1987); Teachers Ins. & Annuity Ass’n of Am. v. Butler, 803 F. 2d 61, 65 (2d Cir.1986); Marcus, Stowell & Beye Gov’t Sec., Inc. v. Jefferson Inv. Corp., 797 F. 2d 227, 230 n. 4 (5th Cir.1986); Cathey v. Johns-Manville Sales Corp., 711 F. 2d 60 (6th Cir.1983).

In In the Matter of the Celotex Corporation, 128 B.R. 478 (M.D.Fla.1991), the bankruptcy court held that there was an automatic stay when a defendant in the trial court appealed, citing Cathey. In Titus Brothers Roofing Company v. Blank, 542 So. 2d 439 (Fla. 5th DCA 1989), Titus appealed a summary judgment entered against it, and the court held that when Titus filed a suggestion of bankruptcy there was an automatic stay, citing Cathey. The opinion does not reflect whether Titus was the defendant in the lower court.

In Farley, 2 F. 3d at 275, the eighth circuit summarized the reasons why the federal circuits have concluded as they have:

Several factors support our decision. First, the plain language of § 362(a)(1) appears to compel this result. It would strain the language of the statute to suggest that an appeal by a debtor from a judgment obtained against the debtor as defendant is not a “continuation” of a judicial “proceeding against the debtor.” See Cathey, 711 F. 2d at 61 (“It is beyond peradventure that the instant appeals are continuations of judicial proceedings.”) Second, the policies underlying the automatic stay are implicated even though the debt-or, by bringing the appeal, seeks to escape or mitigate the adverse judgment. See Sheldon, 902 F. 2d at 8-9 (noting that the policies behind the automatic stay are implicated because the estate has an interest in the outcome of the appeal and suggesting that the bankruptcy court should ensure that the debtor is adequately represented in the appeal).

Finally, to apply or not apply the automatic stay depending upon whether an appeal was taken “against” or “by” a debtor would be impractical and unworkable. Under such an approach, a debtor’s appeal in a case originally brought against it as defendant would not be stayed, yet any cross-appeal by the plaintiff would be stayed. See Association of St. Croix Condominium Owners, 682 F. 2d at 449. Moreover, even absent a cross-appeal, if the debtor prevailed in an appeal from a judgment obtained against it as defendant, both the filing of a petition for rehearing or for certiorari by the debtor’s adversary and any proceedings required upon a remand would be stayed, since both would be “proceeding^] against the debtor.” See Cathey, 711 F. 2d at 62: Association of St. Croix Condominium Owners, 682 F. 2d at 449 n. 2. We can not believe that Congress intended that the applicability of the automatic stay should depend upon “which party is ahead at a particular stage in the litigation.” Teachers Ins. & Annuity Ass’n of Am., 803 F. 2d at 65.

We are persuaded by the above reasoning and therefore recede from our opinion in Marine Charter and hold that the automatic stay provisions of 11 U.S.C. § 362(a) apply on appeal, regardless of whether the debtor is an appellant or appellee, where the original proceedings were against the debtor. DELL, C.J., and ANSTEAD, HERSEY, GLICKSTEIN, GUNTHER, STONE, WARNER, POLEN, FARMER, PARIENTE and STEVENSON, JJ., concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • …ument, that this is not an action against the employer/carrier, is not persuasive. See, e.g., Association of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F. 2d 446 (3d Cir.1982); Florida Eastern Development Co. v. Len-Hal Realty, Inc., 636 So. 2d 756 (Fla. 4th DCA 1994) (en banc) (bankruptcy stay applies where the defending party in the trial forum seeks bankruptcy protection while appealing an adverse judgment). . It is the purpose of this state's workers’ compensation law "to assure the quick…
  • Taylor v. Barnett Bank OF N. Cent. Fla., N.A., 737 So. 2d 1105 (Fla. 1st DCA 1998)
    …strict determined that the stay would apply in Crowe Group, Inc. v. Garner, 691 So. 2d 1089 (Fla. 2d DCA 1993). The. fourth district revisited its Marine Charter decision in Florida Eastern Development Co., Inc. of Hollywood v. Len-Hal Realty, Inc., 636 So. 2d 756 (Fla. 4th DCA 1994). The fourth district noted that although there was a dearth of law on the subject at the time the third district decided Shop in the Grove in 1982, beginning with Association of St. Croix Condominium Owners v. St. Croix Hotel, 68…
  • …lations of the automatic stay.4 Federal bankruptcy judges are certainly not bound by this 3 See Taylor v. Barnett Bank of N. Cent. Fla., N.A., 737 So. 2d 1105, 1106 (Fla. 1st DCA 1998); Fla. E. Dev. Co., Inc. of Hollywood v. Len-Hal Realty, Inc., 636 So. 2d 756, 758 (Fla. 4th DCA 1994); Crowe Group, Inc. v. Garner, 691 So. 2d 1089, 1089 (Fla. 2d DCA 1993). 4 Section 362 provides for the award of damages, including attorneys’ fees and costs, for a willful violation of the automatic stay: (k)(1) Except as p…

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw