COURT OF APPEALS OF VIRGINIA 

Present: Judges Elder, Fitzpatrick and Senior Judge Duff 

Argued at Alexandria, Virginia 

NANCY J. BOGART 

 OPINION BY 

v. Record Nos. 0645-94-4 and 1020-94-4 JUDGE LARRY G. ELDER 

 NOVEMBER 28, 1995 

WILLIAM C. BOGART 

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 

Thomas S. Kenny, Judge (Record No. 0645-94-4) 

Jane Marum Roush, Judge (Record No. 1020-94-4) 

 Thomas P. Mains, Jr. (Mains & Mains, L.C., on 

 briefs), for appellant. 

 (Stephen G. Cochran; Cochran & Rathbun, P.C., 

 on brief), for appellee. 

 Nancy J. Bogart (wife) appeals the trial court's order 

incorporating the parties' property settlement agreement and 

awarding William C. Bogart (husband) attorney's fees. Wife 

contends (1) the trial court lacked jurisdiction to enter a final 

equitable distribution decree on March 14, 1994, incorporating 

terms of the parties' property settlement agreement, after a 

federal bankruptcy court assumed jurisdiction over the matter and 

declined to approve the agreement; and (2) the trial court 

violated Rule 1:1 when, on May 20, 1994, it modified its 

April 28, 1994 order more than twenty-one days after the order's 

issuance. We hold the trial court had jurisdiction to enter its 

March 14, 1994 final equitable distribution order. However, 

because the trial court modified the order more than twenty-one 

days after its entry, it lacked jurisdiction. We therefore 
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affirm the trial court's order in case number 0645-94-4 and 

reverse the trial court's order in case number 1020-94-4. 

 I. 

 FACTS 

 Wife filed a bill of complaint for divorce on November 2, 

1992, seeking a divorce from husband. The divorce was granted on 

November 22, 1993. When the parties separated, they owned 

several parcels of real estate as tenants by the entirety, each 

one encumbered by a deed of trust or mortgage. Following the 

parties' separation, husband stopped making mortgage payments on 

the properties, and the creditors began foreclosure proceedings. 

 On May 27, 1993, seeking bankruptcy protection from the 

creditors, wife filed a Chapter 11 petition with the United 

States Bankruptcy Court for the Eastern District of Virginia, and 

the bankruptcy court assumed jurisdiction over the matter. 

Assumption of jurisdiction included an automatic stay over the 

related state court proceedings, pursuant to 11 U.S.C. § 362(a). 

 On June 28, 1993, the parties executed a letter agreement 

resolving issues of equitable distribution and spousal support. 

Among the terms, wife agreed to transfer to husband her interests 

in the jointly titled property and to relinquish any claims to 

the property in exchange for husband's promise to assume 

responsibility for the debts and to indemnify wife. 

 On November 5, 1993, the bankruptcy court lifted its 

automatic stay and permitted the divorce suit "to proceed to its 
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conclusion, in the state courts, with this [bankruptcy] court 

retaining jurisdiction to determine the allowance of claims 

against the estate of [wife] as the estate shall be constituted 

pursuant to the Order of the State Courts." After receiving this 

permission to litigate the equitable distribution dispute in 

state court, wife requested the bankruptcy court to approve the 

agreement, arguing that without such approval, it was a nullity. 

 On November 22, 1993, the bankruptcy court refused to approve 

the agreement's terms, ruling that the agreement was "not in the 

best interests of [wife] and her creditors." 

 On January 7, 1994, the parties appeared in the state trial 

court to determine the equitable distribution issue. Wife 

contended the bankruptcy court had already decided the issue of 

the agreement's validity, retained jurisdiction over the issue, 

and its decision as to the agreement's validity was final and 

binding on all parties and state courts. The trial court ruled, 

however, that the bankruptcy court's refusal to approve the 

agreement did not mean the agreement was invalid, and it 

scheduled an evidentiary hearing on the matter. 

 Before the trial court could rule on the matter, wife moved 

for an injunction in the bankruptcy court, seeking to prevent 

husband from proceeding with his request to approve the 

settlement agreement. On January 18, 1994, the bankruptcy court 

denied wife's request for an injunction. The bankruptcy court 

commented that "I see no reason why the state court cannot make a 
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determination as to coercion just as well as I can, and maybe 

better . . . and, furthermore, as to equitable distribution." 

 On January 31, 1994, the trial court determined the 

agreement was not the product of duress and incorporated the 

agreement's terms in a March 14, 1994 order. On March 29, 1994, 

the trial court denied wife's motion to vacate or reconsider the 

order, despite her contention that the trial court lacked 

jurisdiction to litigate the equitable distribution issue because 

of the bankruptcy court's earlier refusal to validate the 

parties' agreement. 

 On April 28, 1994, the trial court granted husband's 

petition for enforcement of the order but denied his request for 

attorney's fees. On May 20, 1994, the trial court modified its 

April 28, 1994 order and awarded husband $1,000 in attorney's 

fees. 

 II. 

 JURISDICTION 

 Wife argues that the trial court lacked jurisdiction to 

adjudicate the issue whether the parties' property settlement 

agreement was enforceable as the basis for equitable distribution 

and that, therefore, this Court must vacate the trial court's 

final order of March 14, 1994. We disagree. 

 Our analysis is guided by federal bankruptcy law. 

When a bankruptcy petition is filed, most judicial 

actions against the debtor commenced before the filing 

of the petition are automatically stayed. See 11 
 5 

U.S.C. § 362(a)(1). The automatic stay gives the 

bankruptcy court an opportunity to harmonize the 

interests of both debtor and creditors while preserving 

the debtor's assets for repayment and reorganization of 

his or her obligations. According to section 362(d), 

the bankruptcy court may lift the stay "for cause." 

Because the [United States] Code provides no definition 

of what constitutes "cause," courts must determine when 

discretionary relief is appropriate on a case-by-case 

basis. See In re MacDonald, 755 F.2d 715, 717 (9th 

Cir. 1985); 2 Collier on Bankruptcy § 362.07[1], at 

362-68 to 69. (15th ed. 1992). 

In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992); see In re 

Wilson, 85 B.R. 722, 724 (Bankr. E.D. Pa. 1988). 

 Accordingly, when wife filed her bankruptcy petition on 

May 27, 1993, she became a "debtor" under federal bankruptcy law. 

 The filing of her petition mandated that no state court 

litigation concerning the parties' jointly held property could 

proceed without the bankruptcy court lifting its automatic stay. 

 Wife requested the bankruptcy court to lift its automatic 

stay, pursuant to 11 U.S.C. § 362(d),1 which the bankruptcy court 

did on November 5, 1993.2 Armed with the bankruptcy court's 

 

 1 11 U.S.C. § 362(d)(1) provides in part: 

 On request of a party in interest and after notice and a 

hearing, the court shall grant relief from the stay provided 

under [11 U.S.C. § 362(a)], such as by terminating, 

annulling, modifying, or conditioning the stay-- 

 (1) for cause. 

 2 The bankruptcy court's order stated: 

 Upon consideration of the Motion of Nancy J. Bogart for 

Relief from the Automatic Stay to permit litigation now 

pending to go forward, namely, Chancery Case No. 127306, 

Circuit Court, Fairfax County, Virginia, and by agreement of 

William Bogart, through counsel, and for good cause shown, 

it is by this Court 
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express permission, the parties continued their litigation to 

determine the equitable distribution matter in state trial court. 

 On November 22, 1993, the bankruptcy court issued another 

order, presumably on wife's request, on the matter of the 

parties' settlement agreement. The bankruptcy court denied 

wife's application to approve the agreement, stating it was not 

in the best interest of wife and her creditors. Despite the 

bankruptcy court's November 22, 1993 order and wife's 

protestations that the trial court lacked jurisdiction to approve 

the agreement, an equitable distribution hearing was scheduled. 

The trial court reasoned that the bankruptcy court order did not 

per se invalidate the agreement and that it would examine the 

agreement to see if wife signed it under duress or coercion, as 

she alleged. 

 While the bankruptcy court's November 22, 1993 order 

declining to approve the agreement may appear to have stripped 

the state trial court of jurisdiction over the matter, its 

lifting of the automatic stay and a January 18, 1994 hearing on 

wife's motion to enjoin the state proceedings reveal otherwise. 

First, as discussed above, the bankruptcy court's November 5, 

 

 ORDERED that the automatic stay imposed by 11 U.S.C. 

sec. 362 be, and the same hereby is, vacated and 

extinguished with respect to the said above-identified 

litigation and said litigation shall be permitted to proceed 

to its conclusion, in the State Courts, with this Court 

retaining jurisdiction to determine the allowance of claims 

against the estate of Nancy J. Bogart as that estate shall 

be constituted pursuant to the Order of the State Courts. 
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1993 order lifted the automatic stay to allow all state court 

proceedings to continue. The bankruptcy court retained 

jurisdiction only over the allowance of claims against wife's 

estate, "as that estate shall be constituted pursuant to the 

Order of the State Courts." Furthermore, the bankruptcy court 

unequivocally stated on January 18, 1994, during the hearing of 

wife's request for injunction: 

I see no reason why the state court cannot make a 

determination as to coercion just as well as I can, and 

maybe better, since they deal with many more divorce 

cases, for which I am grateful, than I do, and 

furthermore, as to equitable distribution. So I want 

to advise you at this time that I'm denying your motion 

for an injunction. 

 

(Emphasis added). 

 The trial court concluded that the agreement was enforceable 

and issued a final order on March 14, 1994, incorporating the 

terms of the agreement into the final decree of equitable 

distribution. On March 29, 1994, the trial court declined to 

reconsider its ruling. In fact, the trial court observed that 

 [i]n accordance with state law . . . the agreement 

could and should be given effect unless procured by 

fraud or duress. I found no such fraud or duress 

 . . . . [The bankruptcy court] and I are each 

applying the law of our own courts to the same 

document, and it is entirely possible to come out with 

opposite results. 

We see no error in these proceedings. 

 Wife also asserts even if the bankruptcy court chose to 

allow the state trial court to decide the matters of the 
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agreement's validity and equitable distribution, it lacked 

authority to do so. We reject this argument. As one bankruptcy 

court noted, "[i]t is appropriate for bankruptcy courts to avoid 

incursions into family law matters 'out of consideration of court 

economy, judicial restraint, and deference to our state court 

brethren and their established expertise in such matters.'" 

Wilson, 85 B.R. at 727 (quoting MacDonald, 755 F.2d at 717); see

Robbins, 964 F.2d at 344-45. 

 Under these principles, bankruptcy courts give state courts 

the right to determine and divide marital property, even after 

bankruptcy courts assume jurisdiction over a case. "In the 

normal case, the state court therefore defines what the debtor's 

rights are in the marital property and then the bankruptcy court 

exercises exclusive jurisdiction over the debtor's property which 

has become property of the bankruptcy estate." Hohenberg v. 

Hohenberg, 143 B.R. 480, 485 (Bankr. W.D. Tenn. 1992). As 

another bankruptcy court noted, "'[a] property settlement 

involves an inquiry into factors regularly considered by state 

courts in divorce proceedings, an inquiry which I would find is 

best left to the state courts.'" Robbins, 964 F.2d at 346 

(quoting In re Heslar, 16 B.R. 329, 333 (Bankr. W.D. Mich. 

1981)). 

 Although wife relies on Hohenberg to support her position, 

we interpret that decision differently. In Hohenberg, when 

lifting the stay to allow the divorce proceedings to proceed, the 
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bankruptcy court specifically retained "exclusive jurisdiction" 

over "entry of any consensual property settlement agreement." In 

the case before us, the bankruptcy court did not make such a 

reservation when initially lifting the stay. In fact, the 

bankruptcy court refused to enjoin the state court proceedings 

regarding the agreement after ruling it would not approve the 

agreement's terms. Nevertheless, the Hohenberg court explained: 

[t]o the extent that the state matrimonial court 

adjudicates an equitable distribution in favor of the 

nondebtor spouse, such award becomes a claim within the 

context of 11 U.S.C. § 101[(5)]. The nondebtor 

spouse's claim is an entitlement against the debtor's 

estate, and thus [the nondebtor spouse] becomes one of 

the general unsecured creditors of the estate. 

Hohenberg, 143 B.R. at 488 (citation omitted). In this case, the 

record reveals that the claims involved creditors secured by the 

real estate and accommodated in the parties' agreement. 

 Finally, one scholar commented: 

In particular, a large majority of bankruptcy courts 

are willing to lift the stay to the extent of 

permitting the state court to determine the property 

rights of the debtor's spouse. This permits the 

equitable distribution proceedings to continue, subject 

of course to the exclusive authority of the bankruptcy 

court to determine the priority of the spouse's rights 

as against those of the other creditors. 

Brett R. Turner, Equitable Distribution of Property § 3.06 at 66 

(2d ed. 1994)(footnote omitted)(emphasis added). 

 We therefore hold that the trial court had jurisdiction to 

make its final determination of whether the agreement was 
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enforceable and to fashion its equitable distribution order. 

 III. 

 RULE 1:1 

 In this case, the trial court entered a final order on April 

28, 1994, including an order denying husband attorney's fees. 

Husband filed a motion for reconsideration. On May 5, 1994, the 

trial court addressed a letter to counsel, explaining that 

husband's motion to reconsider was granted and that husband "will 

be awarded attorney's fees in the amount of one thousand dollars 

($1,000.00), to be paid within thirty days of the date of this 

letter." The trial court requested husband to prepare an order 

based on the May 5, 1994 letter "for entry within ten days." The 

trial court's final order awarding attorney's fees was entered on 

May 20, 1994, twenty-two days after the original order. 

 Rule 1:1, a mandatory rule, states "[a]ll final judgments, 

orders, and decrees, irrespective of terms of court, shall remain 

under the control of the trial court and subject to be modified, 

vacated, or suspended for twenty-one days after the date of 

entry, and no longer." (Emphasis added). See Rook v. Rook, 233 

Va. 92, 94-95, 353 S.E.2d 756, 758 (1987). "At the expiration of 

that 21-day period, the trial court loses jurisdiction to disturb 

a final judgment, order, or decree except for the limited 

authority conferred by Code § 8.01-428." School Board v. Caudill 

Rowlett Scott, Inc., 237 Va. 550, 554, 379 S.E.2d 319, 321 

(1989). 
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 In this case, no exceptions to the twenty-one day rule 

applied. The trial court's May 5, 1994 letter to counsel did not 

act as an official court order that was entered within the 

twenty-one day period. See D'Alessandro v. Commonwealth, 15 Va. 

App. 163, 167, 423 S.E.2d 199, 201 (1992)(stating there must be 

an "entry, within the 21-day period after final judgment, of an 

order" vacating the final order); In re Dept. of Corrections, 222 

Va. 454, 463-65, 281 S.E.2d 857, 862-63 (1981). Nor was the 

court's May 20, 1994 order merely an order that did not alter the 

substantive provisions of a final judgment and that merely aided 

in the execution of the final judgment. See Davidson v. 

Commonwealth, 246 Va. 168, 171, 432 S.E.2d 178, 179-80 (1993). 

Because the trial court lacked jurisdiction to enter its May 20, 

1994 order, we vacate the order. 

 Accordingly, we affirm the trial court's March 14, 1994 

equitable distribution order but reverse and vacate its May 20, 

1994 order awarding husband attorney's fees. 

Case No. 0645-94-4 affirmed.

Case No. 1020-94-4 reversed.