Opinion
Civil No. 00-2351 (JAG)
July 14, 2003
Anthony E. Keller-Charneco, Mayaguez, PR, for plaintiffs.
Miguel A. Pagan-Rivera, Hato Rey, PR, for defendants.
OPINION AND ORDER
This case was set for trial and was to commence on May 27, 2003, when the jury had been summoned to appear although not yet selected. When the case was called, plaintiff for the first time responded to defendant's motion regarding qualified immunity and the motion in limine upon which estoppel was raised related to prior bankruptcy petitions wherein plaintiff failed to include this action among his assets. Thereafter, limited information as to plaintiff's pending bankruptcy proceedings was obtained upon examining the electronic docket system. Counsel for plaintiff indicated being unaware of the situation and in no position to present arguments to the court nor having information to provide as to the nature of the pending bankruptcy. Thus, whether an automatic stay was appropriate was briefly discussed. Trial was not held. The jurors not being needed for any other trial that day, were dismissed without being utilized. The parties were ordered to submit their respective briefs on the dismissal of this civil action and if so, whether it would be with or without prejudice.
Absent necessary information as to the pending bankruptcy, the issue of an automatic stay of civil proceedings before this Magistrate was initially considered. Under Title 11 U.S.C. § 362(a), there is an automatic stay as to those actions enumerated. Section 362(b) governs the actions excluded from the automatic stay. Thus, it can be construed that actions initiated by the debtor, although not referred directly under § 362(b), and neither specifically enumerated in § 362(a), are not stayed by the Bankruptcy Code. See The Bohack Corporation v. Borden, Inc. (in the Matter of the Bohack Corporation), 599 F.2d 1160, 1168 (2d Cir. 1979) (although an Act case, the principle is the same, the debtor may file suit in any forum without leave of the Bankruptcy Court, for the automatic stay is to protect the debtor from creditors not vice versa). Further consideration in support seems to flow from Rule 7075 of the Federal Rules of Bankruptcy Procedure in reference to injunctions filed by the debtor that do not require the posting of a bond. See Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1204 (3d Cir. 1991); Martin-Trigona v. Champion Fed. Sav. Loans Ass'n, 892 F.2d 575, 577 (7th Cir. 1989). See also In re Berry Estates, 812 F.2d 67, 71 (2d Cir.) Cert. Denied 484 U.S. 819, 108 S.Ct. 77 (1987). In light of the above, the automatic stay provision of the Bankruptcy Code are inapplicable to the case at bar.
The co-defendant's brief regarding the entry of judgment of dismissal was received (D.E. #73) and so was plaintiff's motion to consider summary judgment filed on May 5, 2003, as a non-suit argument, providing therein some information as to the pending bankruptcy case (D.E. #74). A hearing to receive oral arguments was scheduled for July 1, 2003. For the reasons set forth below, the dismissal of the complaint is warranted.
Counsel for plaintiff indicated at the hearing that the fourth bankruptcy petition (03-02408) had not been dismissed, although no schedules were filed, debtor failed to appear to the "341 meeting" and that counsel was unaware if the trustee would want to manage the case as part of the estate. A judicial concern was present that if plaintiff might be subject to payment of costs and attorney's fees, the bankruptcy status would hinder collection and/or compliance with this Court orders. Additionally, arguments as to the propriety of judicial estoppel arose, both to foster the integrity of the judicial system and/or as a result of the need to make findings, under the totality of circumstances, of whether plaintiff might have attempted to manipulate the outcome by playing cat and mouse with aborted bankruptcy filings (02-02254; 00-06560; 99-06822; 93-01997) and by not notifying the status of the lawsuit at other times in the bankruptcy filings. However, this Magistrate would rather defer the issue of estoppel, requiring a finding of injury to creditors that is premature, to the Bankruptcy Court. Still, there is no doubt that plaintiff failed to timely notify this court, except at the eve of trial, of the pending bankruptcy action. Plaintiff has hereinafter the duty to inform the Bankruptcy Court as to the issues raised before this Magistrate since defendant is not a creditor or party to the petition.
Verification of the pending active bankruptcy petition No. 03-2408 shows same status as of trial date, that is, no action of dismissal or discharge been taken nor submission by plaintiff.
Judicial estoppel is distinct from the concept of equitable estoppel.
It is not to an attempt that the Bankruptcy Court would entertain the merits of this civil action but rather to shed light as to the debtor's duty to notify the status and pendency of this case, which seems to affect significantly the Estate and/or its creditors.
Counsel for plaintiff was amenable to dismissal, and entry of judgment thereof, without prejudice, pending the outcome of the bankruptcy action. Richardson v. United Parcel, 195 B.R. 737 (E.D. Mo. 1996). Counsel for defendant, on the other hand, would rather seek dismissal with prejudice, arguing that judicial estoppel should be found from the whole case scenario and the history of the case at bar.
In light of the above discussed, dismissal, without prejudice, of the above case is ordered. The parties were apprised that once the Bankruptcy Court resolves the pending issues, plaintiff will be allowed to reinstate this cause of action, without payment of filing fees. Likewise, as promptly as possible, the defendants' motions for summary judgment, including issues of estoppel and qualified immunity would be addressed by this court, without additional briefing requirements.
It is ordered that judgment of dismissal, without prejudice, be entered.
IT IS SO ORDERED.