Court Opinion

ID: 9479336
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:15:02.981718+00
Date Added: 2024-06-11T17:46:57.834637
License: Public Domain

JOHNSON, Circuit Judge,
dissenting:
In entering its agreed orders modifying the automatic stay in the instant case, the bankruptcy court, in its first order, allowed the commencement of certain personal injury actions against the debtor Global and, in its subsequent order, allowed those actions to proceed forward. The majority today concludes that, on the basis of the above orders, the bankruptcy court validated the otherwise void filing of the personal injury complaint of the Sikes in violation of the automatic stay. Persuaded that the above conclusion interprets too broadly the relevant orders of the bankruptcy court and contravenes the fundamental purpose underlying the automatic stay in bankruptcy, I respectfully dissent.
In general, “[ajcts in violation of the [automatic] stay are void ab initio regardless of lack of knowledge of the filing of the petition.” Matter of J & L Transport, Inc., 47 B.R. 51, 52-58 (Bkrtcy.W.D.Wis.1985). The majority, however, states that such acts are in some instances voidable, instead of void, by virtue of the express powers granted to the bankruptcy court in Section 362(d) of the Bankruptcy Code to grant relief from the automatic stay “by terminating, annulling, modifying, or conditioning” the stay. While in agreement with the proposition that a bankruptcy court may validate an otherwise void filing in violation of the automatic stay, I am not persuaded that such was the intent of the bankruptcy court in the instant case for the following reasons.
After several parties petitioned the bankruptcy court for relief from the automatic stay triggered by the filing by Global for bankruptcy relief, the bankruptcy court, pursuant to an agreed order entered on February 18, 1987, modified the automatic stay “for the limited purpose of allowing [certain] personal injury actions ... to be commenced against Global and allowing discovery to proceed in those actions.” Among those personal injury actions allowed to be commenced by the February 18 order, as identified in the attachment to that order, was the personal injury action of the Sikes against Global. In so identifying the action of the Sikes in the February 18 order, however, the bankruptcy court did not refer to the cause number of the previous complaint filed by the Sikes in violation of the automatic stay. Thereafter, the bankruptcy court entered another agreed order on September 25, 1987, further modifying the automatic stay for the limited purpose of allowing “personal injury actions that are pending against Global to proceed, allowing discovery to proceed in those actions, and allowing trials to proceed.” Contrary to the conclusion reached by the majority today, I am persuaded that the express language of the February 18 order of the bankruptcy court only allowed the commencement of personal injury actions against Global. Thereafter, the September 25 order allowed the continuation of previous personal injury actions already validly filed against Global by virtue of the earlier modification of the automatic stay by the February 18 order. In this regard, the agreed orders of the bankruptcy court did not relate back to the initial filing by the Sikes of their complaint in violation of the automatic stay and validate that filing. To infer such a radical form of relief from the limited actions of the bankruptcy court contravenes a fundamental purpose of the automatic stay in *181bankruptcy — that purpose being to provide the debtor with relief from his creditors and their collection efforts.
This is not to say that a bankruptcy court may never validate otherwise void filings should it choose to do so; the majority opinion ably sets forth the powers of the bankruptcy court in this regard. Nevertheless, this Court should not imply such relief from the automatic stay in the absence of an express intent by the bankruptcy court to afford that relief. If the bankruptcy court in the instant case had intended to validate otherwise void filings in violation of the automatic stay, it could have expressly provided for such relief through the inclusion of specific language to such effect in its orders. It did not do so. Accordingly, I respectfully dissent.