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Pope v. Manville Forest Products Corporation

United States Court of Appeals, Fifth Circuit
Dec 12, 1985
778 F.2d 238 (5th Cir. 1985)

Summary

holding that district court's post-petition dismissal of an action was a continuance that violated the stay

Summary of this case from Dean v. Trans World Airlines, Inc.

Opinion

No. 85-4397. Summary Calendar.

December 12, 1985.

Gerard N. Torry, Opelousas, La., for plaintiff-appellant.

Lang, Simpson, Robinson Somerville, Peyton Lacy, Jr., Birmingham, Ala., and John J. Hemrick, Gen. Atty., Manville Forest Products Corp., W. Monroe, La., for defendant-appellant.

Appeal from the United States District Court for the Western District of Louisiana; F.A. Little, Jr., District Judge, Presiding.

Before POLITZ, GARWOOD and JOLLY, Circuit Judges.


OPINION


The plaintiff, Linda Pope, appeals the district court's judgment which dismissed her Title VII claim on grounds of res judicata after a bankruptcy court heard the matter and allowed no damages.

She initially filed this action against Manville in the Western District of Louisiana, but the district court action was automatically stayed after Manville filed Chapter 11 proceedings, 11 U.S.C. § 362, in the Bankruptcy Court of the Southern District of New York. The bankruptcy court entered a stay order that was filed in the Western District of Louisiana.

Pope filed her claim in the bankruptcy court, but "moved to change the venue" back to the Western District of Louisiana; she also contested the jurisdiction of the bankruptcy court. The bankruptcy court denied the motion to change venue, held that it had jurisdiction, and then proceeded to a hearing. Pope did not appear or otherwise offer any evidence, despite the fact that the court had given notice that it would proceed to a hearing if it denied the motions. The bankruptcy court allowed Pope's claim in the amount of $0. Then the district court in Louisiana, on notice of the bankruptcy court's action, dismissed the suit with prejudice, sua sponte, on the grounds of res judicata. Pope now appeals the dismissal of the action by the district court.

Pope ignores the question of res judicata and raises two grounds for appeal. The first is that Title VII actions should not be dischargeable in bankruptcy; the second is that the bankruptcy court should have granted a change of venue. Manville asserts that the bankruptcy court's determination is res judicata and that the present appeal is an improper collateral attack on that judgment.

Because of our conclusion that the district court must be reversed on other grounds, we address these contentions only in passing. Both these issues should have been raised in an appeal from the bankruptcy court. Moreover, the first contention has no basis in law. The second contention would have been more properly handled by requesting the Southern District of New York to lift the stay to allow the case to proceed to a final result in the Western District of Louisiana. The result could then have been recognized in the bankruptcy court.

We note initially that the Manville bankruptcy proceeding is still pending with no final disposition having been reached. In the light of this fact, we examine whether the district court's ruling was a proper exercise of its authority.

A stay granted against an action in district court continues until the bankruptcy case is closed, dismissed, or discharge is granted or denied, or until the bankruptcy court grants some relief from the stay. 11 U.S.C. § 362(a), (c)(2), (d), (e), (f). None of these events has taken place.

We recognize that the stay, by its statutory words, operates against "the commencement or continuation" of judicial proceedings. No specific reference is made to "dismissal" of judicial proceedings. Nevertheless, it seems to us that ordinarily the stay must be construed to apply to dismissal as well. First, if either of the parties takes any step to obtain dismissal, such as motion to dismiss or motion for summary judgment, there is clearly a continuation of the judicial proceeding. Second, in the more technical sense, just the entry of an order of dismissal, even if entered sua sponte, constitutes a judicial act toward the disposition of the case and hence may be construed as a "continuation" of a judicial proceeding. Third, dismissal of a case places the party dismissed in the position of being stayed "to continue the judicial proceeding," thus effectively blocking his right to appeal. Thus, absent the bankruptcy court's lift of the stay, or perhaps a stipulation of dismissal, a case such as the one before us must, as a general rule, simply languish on the court's docket until final disposition of the bankruptcy proceeding. In making these observations, we expressly do not decide any case except the one before us; we do not wish unnecessarily, or with technicality, to impede the district court in maintaining a current docket. We simply hold that the entry of the particular order of dismissal in the appeal before us was prohibited by the section 362 stay.

We therefore reverse the judgment of dismissal for the reasons stated herein, and remand the case to the district court for appropriate action not inconsistent with this opinion.

The appellee has filed a motion to dismiss the appeal on grounds of res judicata. That motion is hereby denied.

REVERSED AND REMANDED.


Summaries of

Pope v. Manville Forest Products Corporation

United States Court of Appeals, Fifth Circuit
Dec 12, 1985
778 F.2d 238 (5th Cir. 1985)

holding that district court's post-petition dismissal of an action was a continuance that violated the stay

Summary of this case from Dean v. Trans World Airlines, Inc.

holding that a district court's sua sponte order of dismissal of a plaintiff's employment discrimination action, with prejudice, and on the merits (by reason of res judicata), was violative of the automatic stay

Summary of this case from In re Lyondell Chemical Co.

holding that the trial court's sua sponte dismissal in favor of defendant employer who had filed for bankruptcy violated the automatic stay for the following reasons: "First, if either of the parties takes any step to obtain dismissal, such as motion to dismiss or motion for summary judgment, there is clearly a continuation of the judicial proceeding. Second, in the more technical sense, just the entry of an order of dismissal, even if entered sua sponte, constitutes a judicial act toward the disposition of the case and hence may be construed as a ‘continuation’ of a judicial proceeding. Third, dismissal of a case places the party dismissed in the position of being stayed ‘to continue the judicial proceeding,’ thus effectively blocking his right to appeal. Thus, absent the bankruptcy court's lift of the stay, or perhaps a stipulation of dismissal, a case such as the one before us must, as a general rule, simply languish on the court's docket until final disposition of the bankruptcy proceeding."

Summary of this case from Gaddy v. Se Prop. Holdings, LLC

reversing district court dismissal order on ground that its entry was prohibited by the automatic stay

Summary of this case from In re Best Payphones, Inc.

reversing order dismissing action against the debtor that was entered in violation of the automatic stay

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noting that, as general rule, a stay persists "until the bankruptcy case is closed, dismissed, or discharge is granted or denied, or until the bankruptcy court grants some relief from the stay"

Summary of this case from Villarreal v. City of Laredo

In Pope v. Manville Forest Prod. Corp., 778 F.2d 238, 239 (5th Cir. 1985), the court dealt with an action against a debtor that was dismissed, after the debtor's bankruptcy case commenced, by a district court sua sponte based on the res judicata effect of a ruling in another court.

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stating that "absent the bankruptcy court's lift of the stay, or perhaps a stipulation of dismissal, a case such as the one before us must, as a general rule, simply languish on the court's docket until final disposition of the bankruptcy proceeding"

Summary of this case from Gaddy v. Se Prop. Holdings, LLC

noting that because § 362 makes no specific reference to the dismissal of judicial proceedings, the stay must be construed to apply to dismissal because the entry of an order of dismissal constitutes a judicial act toward the disposition of the case and may be construed as a "continuation" of a judicial proceeding

Summary of this case from Darr v. Altman
Case details for

Pope v. Manville Forest Products Corporation

Case Details

Full title:LINDA POPE, PLAINTIFF-APPELLANT, v. MANVILLE FOREST PRODUCTS CORPORATION…

Court:United States Court of Appeals, Fifth Circuit

Date published: Dec 12, 1985

Citations

778 F.2d 238 (5th Cir. 1985)

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