Opinion
No. 05-07-01269-CV
Opinion issued February 10, 2009.
On Appeal from the 296th Judicial District Court, Collin County, Texas, Trial Court Cause No. 296-00275-01.
Before Justices MOSELEY, FITZGERALD, and MAZZANT.
OPINION
This is a suit for damages based on allegations of neglect of a nursing home resident. The trial court dismissed the case for want of prosecution in October 2004. The plaintiff did not appeal until September 2007. We dismiss the appeal for lack of appellate jurisdiction.
I. Procedural History
Appellant, Paula Brashear, filed this lawsuit in February 2001. She sued five defendants: appellees Victoria Gardens of McKinney, L.L.C. and Lisa Mauer, plus Raintree Healthcare Corporation, Stephen J. Wolf, and Eddie Haggard. Raintree promptly filed a suggestion of bankruptcy and plea in abatement. Raintree attached documents showing that it had filed its bankruptcy case in February 2000. The trial judge signed an agreed order staying the case indefinitely on account of Raintree's bankruptcy.
In September 2004, the trial court sent a notice that the case would be dismissed for want of prosecution absent certain action from the parties, and the court dismissed the case for want of prosecution on October 27, 2004. The record indicates that the trial judge signed an "Agreed Order of Dismissal with Prejudice as to Defendant Raintree Only" on January 20, 2005, although the order itself does not appear in our clerk's record.
Brashear filed a verified motion to reinstate the case on February 2, 2006. It appears that the motion was heard but never ruled upon by written order. The record suggests that Raintree's bankruptcy closed on August 17, 2007. On September 15, 2007, Brashear filed by mail both a duplicate of her 2006 motion to reinstate and a notice of appeal from the October 2004 dismissal for want of prosecution. The trial court denied the motion to reinstate by order signed on November 20, 2007. We questioned our jurisdiction over this appeal and solicited letter briefs from the parties directed to that issue.
II. Appellate Jurisdiction
A. Summary of appellant's argument
Brashear argues that the automatic bankruptcy stay precluded her from taking any action to reinstate her case after the October 2004 dismissal until Raintree was discharged (which never happened) or the bankruptcy closed. Once the bankruptcy closed, she contends, federal law gave her thirty days to file her notice of appeal, which she timely did. See 11 U.S.C.A. § 108(c) (West 2004 Supp. 2008) (extending certain deadlines that fall after the filing of a bankruptcy petition). Alternatively, she contends that the October 2004 dismissal order itself was void and that we have jurisdiction to determine that it is void. Appellees disagree with Brashear, and Mauer has included a motion to dismiss this appeal in her appellate brief.
B. Analysis
The question presented is whether Brashear's notice of appeal was timely despite its being filed almost three years after the trial court purportedly dismissed the entire case for want of prosecution. To answer this question, we must analyze the effect of Raintree's bankruptcy on the proceedings in the trial court.
We start at the beginning. When Brashear filed this lawsuit, Raintree was in bankruptcy and the automatic stay was in effect. Under the bankruptcy code, the filing of a bankruptcy petition "operates as a stay, applicable to all entities, of . . . the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor." 11 U.S.C.A. § 362(a)(1) (West 2004 Supp. 2008). An action taken in violation of the automatic stay is void, not merely voidable. Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501 (Tex. 1988) (per curiam); Stephens v. Hemyari, 216 S.W.3d 526, 529 (Tex.App.-Dallas 2007, pet. denied). Thus, Brashear's filing of this lawsuit was "a void act" and "a nullity" as to Raintree. Lawrenson v. Global Marine, Inc., 869 S.W.2d 519, 523 (Tex.App.-Texarkana 1993, writ denied); accord Lovall v. Chao, No. 01-02-01019-CV, 2005 WL 110372, at *3 (Tex.App.-Houston [1st Dist.] Jan. 20, 2005, no pet.) (mem. op.) (justice court had no jurisdiction over forcible detainer action filed after tenant filed for bankruptcy); Raney v. Hall, No. 05-98-00436-CV, 2000 WL 567054, at *1 (Tex.App.-Dallas May 4, 2000, no pet.) (not designated for publication) (holding that lawsuit filed against bankrupt debtor "was void and did not vest the trial court with jurisdiction").
We next consider what effect Raintree's bankruptcy had on Brashear's lawsuit as to the other defendants. Raintree argued in its suggestion of bankruptcy and plea in abatement that the three individual defendants (Mauer, Wolf, and Haggard) were its employees and were also protected by the automatic stay. In a subsequent motion to enforce the automatic stay, Raintree expanded its argument, contending that Victoria Gardens, which purchased the nursing home in question from Raintree, was also protected by the automatic stay. Raintree did not verify these documents or attach any evidence to them except for its bankruptcy petition and a bankruptcy court order converting its cases from Chapter 11 to Chapter 7. The trial court eventually signed an "Agreed Order to Stay Litigation," ordering that the case "is stayed on the Court's docket pursuant to 11 U.S.C. § 362 until further order of this Court."
The general rule is that the automatic stay does not bar the trial court from proceeding with litigation against a bankrupt debtor's co-defendants, co-debtors, or co-tortfeasors. In re Sw. Bell Tel. Co., 35 S.W.3d 602, 604 (Tex. 2000) (per curiam). But there are exceptions to this general rule, and Brashear argues that the stay applies for the benefit of nondebtors if the claims against the debtor and the nondebtors are "inextricably intertwined" or "arise from the same legal and factual basis." See Houston Pipeline Co. L.P. v. Bank of Am., N.A., 213 S.W.3d 418, 425 (Tex.App.-Houston [1st Dist.] 2006, no pet.). Such broad exceptions, however, would swallow the general rule, and we find no cases from this Court or our state and federal supreme courts embracing those exceptions. Rather, we have said that the automatic stay applies to claims against nondebtors only in "very limited situations." Cissne v. Robertson, 782 S.W.2d 912, 924 (Tex.App.-Dallas 1989, writ denied). Those exceptions arise when failure to extend the automatic stay to claims against the nondebtors would jeopardize the assets of the bankruptcy estate. Lisanti v. Dixon, 147 S.W.3d 638, 641 (Tex.App.-Dallas 2004, pet. denied). We have said that a nondebtor must demonstrate either (1) that there is such an identity between the debtor and the nondebtor that the debtor could be said to be the true defendant and a judgment against the nondebtor would be, in effect, a judgment or finding against the debtor or (2) that extending the stay for the benefit of the nondebtor would contribute to the debtor's efforts of rehabilitation. Hoover v. Hooker, No. 05-00-00268-CV, 2002 WL 1462210, at *2 (Tex.App.-Dallas July 9, 2002, no pet.) (not designated for publication); accord Bamburg v. Townsend, 35 S.W.3d 85, 89 (Tex.App.-Texarkana 2000, no pet.). In Hoover, we concluded that an attorney was not protected by the automatic stay merely because his professional corporation filed for bankruptcy. 2002 WL 1462210, at *2-3; see also Novosad v. Cunningham, 38 S.W.3d 767, 770 (Tex.App.-Houston [14th Dist.] 2001, no pet.) (dentist not entitled to automatic stay based on his corporation's bankruptcy). No party presented any evidence to the trial court that would support application of these exceptions. Accordingly, we conclude that the automatic stay did not bar the trial court from proceeding with the litigation as to the four nondebtor defendants.
Based on the foregoing, we conclude that the case was in the following posture when the trial court signed the October 2004 dismissal order. First, Raintree was not properly before the trial court, as the filing of the lawsuit was void and a nullity as to it. Second, the nondebtor defendants were not entitled to the benefit of Raintree's automatic stay, so the trial court's exercise of jurisdiction over and its dismissal of the case were effective as to the claims against them. See Sw. Bell Tel. Co., 35 S.W.3d at 604 (holding that an order transferring venue was void as to defendant in bankruptcy but valid and effective as to a nondebtor co-defendant); see also id. ("[A]n express severance is not required for the proceedings to continue against the non-debtor."). Thus, the dismissal order disposed of all parties and claims before the trial court and was a final, appealable judgment. Cf. M.O. Dental Lab v. Rape, 139 S.W.3d 671, 674-75 (Tex. 2004) (per curiam) (summary judgment order disposing of all claims except claims against unserved and nonappearing defendant was final for appellate purposes). Brashear took no action within thirty days of the dismissal, nor did she seek to postpone the commencement of her postjudgment deadlines under Texas Rule of Civil Procedure 306a(4). Accordingly, her September 2007 notice of appeal was not timely filed, and we have no jurisdiction over this appeal. See Raulston v. Progressive Ins. Co., 115 S.W.3d 803, 804 (Tex.App.-Dallas 2003, no pet.) (per curiam) (timely notice of appeal is jurisdictional prerequisite).
III. Conclusion
We dismiss this appeal for lack of jurisdiction.