Court Opinion

ID: 61893
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:17:01+00
Date Added: 2024-06-11T11:03:02.315955
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                           May 28, 2008

                                     No. 07-10557                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk

In the Matter Of: SHEILA KAY BARNES,

                                                  Debtor.

                                       ____________
SHEILA KAY BARNES,

                                                  Appellant,
v.

RONALD BARNES,

                                                  Appellee.

                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 1:07-CV-32

Before STEWART, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Prior to the bankruptcy filing by Appellant Sheila Kay Barnes, the
Barneses were engaged in a divorce proceeding in Texas state court. During the
bankruptcy proceeding, Appellee Ronald Barnes petitioned the bankruptcy court

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                  No. 07-10557

to retroactively lift the bankruptcy stay as to the divorce proceeding, which had
apparently proceeded to some degree before and after Appellant’s filing of
bankruptcy. On November 6, 2006, after conducting a hearing on the matter,
the bankruptcy court annulled the automatic stay, and granted relief to Appellee
from the automatic stay with regard to the divorce proceeding retroactive to the
entry of a final divorce decree on September 2, 2003.          Appellant filed an
interlocutory appeal from the stay order, and the district court affirmed.
Finding no error in the bankruptcy court’s decision to lift the stay, we affirm the
decision below.
      This Court reviews the decisions of a bankruptcy court using the same
standard applied by the district court. Plunk v. Yaquinto (In re Plunk), 481 F.3d
302, 305 (5th Cir. 2007). Findings of fact are reviewed for clear error, and
conclusions of law are reviewed de novo. Id. A bankruptcy court’s lift of an
automatic stay is reviewed for abuse of discretion. In re Chunn, 106 F.3d 1239,
1242 (5th Cir. 1997).
      Appellant first contests the district court’s denial of her request for a free
transcript of the bankruptcy court’s November 6, 2006 hearing. As the district
court noted, Appellant did not include a transcript of the hearing in the record,
nor did Appellant seek in forma pauperis status or a free transcript upon the
filing of her appeal. Rather, Appellant delayed requesting the free transcript
until after both she and Appellee had filed their initial briefs in the district
court. Under 28 U.S.C. 753(f), fees for transcripts in civil cases shall be paid by
the United States to persons permitted to appeal in forma pauperis if the trial
judge certifies that the appeal is not frivolous. However, Appellant never
actually filed with the district court a motion to proceed in forma pauperis, and
in fact paid all filing fees up until her appeal to this Court. Even assuming that
Appellant’s “Motion for Free Appellate Transcript Record” can be regarded as a
request to proceed in forma pauperis under 28 U.S.C. § 1915, Appellant did not

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                                       No. 07-10557

demonstrate to the district court that she was entitled to in forma pauperis
status. Contrary to her assertions, Appellant did not file with the district court
the required affidavit of indigence and statement of assets, and thus the district
court did not err in concluding that Appellant had not established indigency and
in denying her request for a free transcript.
       Second, we agree with the district court that Appellant’s appeal is
frivolous and lacks merit. Bankruptcy courts are given broad discretion to
fashion relief from the automatic stay, including retroactive annulment if
warranted. See 11 U.S.C. § 362(d); In re Cueva, 371 F.3d 232, 236 (5th Cir.
2004). Even without inclusion of the transcript, we have no difficulty concluding
that the bankruptcy court did not abuse its discretion in lifting the automatic
stay. In general, bankruptcy courts owe state courts deference in domestic
matters. See In re Robbins, 964 F.2d 342, 344-47 (4th Cir. 1992); see also In re
White, 851 F.2d 170, 173-74 (6th Cir. 1988). In addition, as the district court
noted, the resolution of the divorce proceeding could only benefit the resolution
of the bankruptcy. For these reasons, courts have often permitted the lifting of
the automatic stay to allow the state court to resolve pending divorce
proceedings. See, e.g., White, 851 F.2d at 173; Vaughan v. First Nat’l Bank, No.
93-7032, 1993 U.S. App. LEXIS 34000 (10th Cir. Dec. 23, 1993). The bankruptcy
court properly exercised its discretion in lifting the stay.1
       Therefore, for the reasons stated above, the judgment of the district court
is AFFIRMED.

       1
         Appellant’s circular argument that the divorce proceedings were void because they
violated the stay – that was lifted – and thus could not serve as a basis for annulling the stay
is meritless. This Court has held “that actions taken in violation of an automatic stay are not
void, but rather that they are merely voidable, because the bankruptcy court has the power
to annul the automatic stay pursuant to section 362(d).” Picco v. Global Marine Drilling Co.,
900 F.2d 846, 850 (5th Cir.1990) (emphasis in opinion). When a bankruptcy court lifts the
automatic stay, any defect in the previous action is cured. Thus, in the instant case, any
alleged defect in the state court order was cured when the stay was lifted. Chunn, 106 F.3d
at 1242 n6.

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