Opinion
No. 56910.
02-10-2011
PALM COURT, LLC, A Nevada Limited Liability Company, Appellant, v. NEVADA PROPERTY MORTGAGE, LLC, A Nevada Limited Liability Company; and Kristine Seward, an Individual d/b/a Nevada Property Mortgage, Respondents.
Prezant & Mollath Rowe & Hales
Prezant & Mollath
Rowe & Hales
ORDER DISMISSING APPEAL
This is an appeal from a district court judgment dismissing appellant's complaint and awarding damages, attorney fees, and costs to respondents on their counterclaim in a contract action. First Judicial District Court, Carson City; James E. Wilson, Judge.
Appellant has notified this court that on January 23, 2011, it filed a petition for relief under Chapter 7 of the bankruptcy code, in the United States Bankruptcy Court for the District of Nevada (Case No. 11–10914). The filing of a petition under Chapter 7 operates to stay, automatically, the “continuation” of any “judicial ... action ... against the debtor.” 11 U.S.C. § 362(a)(1) (2006). An appeal, for purposes of the automatic stay, is considered a continuation of the action in the trial court. See Ingersoll–Rand Financial Corp. v. Miller Min. Co., 817 F.2d 1424 (9th Cir.1987). Consequently, an appeal is automatically stayed in proceedings that were originally brought against the debtor, regardless of whether the debtor is the appellant or respondent in the appeal. Id.
Here, appellant was the plaintiff/counter-defendant below and, following a bench trial, it was awarded nothing on its breach of contract claim and a money judgment was entered against it on respondents' counterclaim for breach of contract. Accordingly, the automatic bankruptcy stay applies to this appeal.
Given the applicability of the automatic stay, this appeal may linger indefinitely on this court's docket pending final resolution of the bankruptcy proceedings. Thus, we conclude that judicial efficiency will be best served if this appeal is dismissed without prejudice to appellant's right to move to reinstate this appeal upon the lifting of the bankruptcy stay. Because a dismissal without prejudice will not require this court to reach the merits of this appeal and is not inconsistent with the primary purposes of the bankruptcy stay—to provide protection for debtors and creditors—we further conclude that such a dismissal will not violate the bankruptcy stay. See Dean v. Trans World Airlines, Inc., 72 F.3d 754, 756 (9th Cir.1995) (holding that a post-bankruptcy dismissal will violate the automatic stay “where the decision to dismiss first requires the court to consider other issues presented by or related to the underlying case”); see also IUFA v. Pan American, 966 F.2d 457, 459 (9th Cir.1992) (holding that the automatic stay does not preclude dismissal of an appeal so long as dismissal is “consistent with the purpose of [11 U.S.C. § 362(a) ”] ).
Accordingly, we dismiss the appeal without prejudice to appellant's right to move for reinstatement of this appeal upon either the lifting of the bankruptcy stay or the final resolution of the bankruptcy proceedings, if such a motion is deemed appropriate at that time. Thus, we
ORDER this appeal DISMISSED.