CROWE GROUP, INC., APPELLANT,
v.
WADE H. GARNER, TRUSTEE, APPELLEE
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A Florida appellate court recognized that a debtor's Chapter 11 bankruptcy filing triggered an automatic stay under federal law that halted continuation of a foreclosure appeal, even though the debtor was the appellant rather than the appellee in the appellate proceedings.
The automatic stay under 11 U.S.C. § 362(a) applies to the appeal because the original action was brought against the debtor by the creditor. The determination of whether a case on appeal is stayed depends upon its inception, with the stay applying regardless of whether the debtor is the appellant or appellee in appellate proceedings.
[1] The filing of a voluntary bankruptcy petition under chapter 11 operates as an automatic stay of the commencement or continuation of a judicial proceeding against the debt…
[2] The automatic stay applies to appellate proceedings that were originally brought against the debtor, regardless of whether the debtor is the appellant or the appellee.
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Join FLexlaw to unlock all legal intelligence“the filing of a petition under chapter 11 operates as an automatic stay of the commencement or continuation of a judicial proceeding against the debtor”
Establishes the operative language of the federal automatic stay provision that applies to this case
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Join FLexlaw to unlock all legal intelligenceAppellee Wade Garner initiated a mortgage foreclosure action against appellant Crowe Group, Inc. Just prior to filing its notice of appeal, Crowe Grou…
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This appeal arises from an action begun by the appellee to foreclose a mortgage against the appellant. The appellant’s initial brief states that just prior to the filing of its notice of appeal, it filed a voluntary petition in bankruptcy under chapter 11. Sua sponte this court raised the question whether the bankruptcy filing affects the instant appeal in view of the automatic stay provisions of 11 U.S.C. § 362(a) (1982). That section provides, in part, that the filing of a petition under chapter 11 operates as an automatic stay of the commencement or continuation of a judicial proceeding against the debtor. We gave the appellant and the appellee an opportunity to advise this court of the effect of the bankruptcy proceedings on this appeal. We also conducted our own research on the issue. The argument has been made that if the appeal is brought by the debtor, as in this case, continuation of the appeal should not be considered the continuation of a proceeding against the debtor. However, most courts have rejected that argument.
The rule is that the determination of whether a case on appeal is stayed depends upon its inception, with the stay applying against proceedings originally • brought against the debtor regardless of whether the debtor is the appellant or the appellee in appellate proceedings. Cathey v. Johns-Manville Sales Corp., 711 F. 2d 60 (6th Cir.1983), cert. denied, 478 U.S. 1021, 106 S.Ct. 3335, 92 L.Ed.2d 740 (1986); Ellison v. Northwest Engineering Co., 707 F. 2d 1310 (11th Cir.1983); 9A Am.Jur.2d Bankruptcy § 1388 (1991).
Accordingly, since this action was originally brought against the debtor (the appellant) by the creditor (the appellee), the automatic stay under the federal statute applies to these proceedings. Therefore, these proceedings are stayed. The parties are directed to inform this court when the bankruptcy court grants relief from the automatic stay or when that stay lapses.
We recognize that our decision regarding the stay expressly and directly conflicts with the decision of the Third District Court of Appeal in Shop in the Grove, Ltd. v. Union Federal Savings & Loan Association, 425 So. 2d 1138 (Fla. 3d DCA 1982), with which the Fourth District Court of Appeal expressed its agreement in Marine Charter & Storage, Ltd. v. Underwriters, 568 So. 2d 944 (Fla. 4th DCA 1990).
It is so ordered.
DANAHY, A.C.J., and HALL and THREADGILL, JJ., concur.
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Taylor v. Barnett Bank OF N. Cent. Fla., N.A., 737 So. 2d 1105 (Fla. 1st DCA 1998)…Bankruptcy Code. The fourth district followed that ruling in Marine Charter & Storage, Ltd. v. Underwriters, 568 So. 2d 944 (Fla. 4th DCA 1990). In contrast, the second district 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 dea…
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AmMED Surgical Equip., LLC v. Prof'l Med. Billing Specialists, LLC, 162 So. 3d 209 (Fla. 2d DCA 2015)…rise to the automatic stay. Because any act taken in violation of the automatic stay is void, the Notice of Appeal is ineffective to the extent it purports to confer jurisdiction on this Court .... ” (citation omitted)); Crowe Grp., Inc. v. Garner, 691 So. 2d 1089, 1089 (Fla. 2d DCA 1993) (holding that the automatic stay applies to the debt- or’s appeal of an order entered in action brought against the debtor in the lower court). The Eighth Circuit has ruled as follows with regard to Arkansas’s notice-of-appe…1 / 2
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Nat'l Med. Imaging, LLC v. Lyon Fin. Servs., Inc. (Fla. 3d DCA 2021)…nly 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 provided in paragraph (2), an individual injured by any willful violatio…
Authorities Cited
- Cathey v. Johns-Manville Sales Corp., 711 F.2d 60 (6th Cir. 1983)
- Butts v. City of N.Y., 478 U.S. 1021 (U.S. 1986)
- Block v. Meese, 478 U.S. 1021 (U.S. 1986)
- Shop IN THE Grove, Ltd. v. Union Fed. Sav. & Loan Ass'n OF Miami, 425 So. 2d 1138 (Fla. 3d DCA 1982)
- Ellison v. Nw. Eng'g Co., 707 F.2d 1310 (11th Cir. 1983)
- Marine Charter & Storage, Ltd., Inc. v. ALL Underwriters AT Lloyds OF London Subscribing TO Cover Notes 2H04/1291, 568 So. 2d 944 (Fla. 4th DCA 1990)