Jones v. Cain

• Citation: 804 A.2d 322
• Decision Date: 08 August 2002
• Docket Number: No. 95-CV-1394.,95-CV-1394.
• Court: Court of Appeals of Columbia District
• Parties: Kelsey A. JONES, Appellant, v. Courtney L. CAIN, Appellee.

804 A.2d 322

Kelsey A. JONES, Appellant, v. Courtney L. CAIN, Appellee.

No. 95-CV-1394.

District of Columbia Court of Appeals.

Argued June 30, 1999.

Decided August 8, 2002.

Brian K. Flowers, Washington, DC, for appellant.

J. Thomas Giunta for appellee.

Before TERRY, SCHWELB, and FARRELL, Associate Judges.

TERRY, Associate Judge:

According to appellee Courtney Cain, appellant Kelsey Jones evicted him from the house he and his wife had rented from Dr. Jones. Mr. Cain alleged that Dr. Jones locked him out of the house, then disposed of several items of personal property he had left inside the house. Dr. Jones claimed that Mr. Cain had voluntarily abandoned the premises and that nothing of value was left there. After a two-day trial, the jury found Mr. Cain's evidence more credible and awarded him $10,000 in compensatory damages and $2,000 in punitive damages. The court entered judgment on the verdict. Dr. Jones contends on appeal that the trial court erred in several respects: (1) it abused its discretion when it denied his motion for a continuance; (2) it improperly excluded certain exhibits which he sought to introduce into evidence; and (3) it incorrectly instructed the jury on the law of abandonment. We find each of these arguments meritless. We nevertheless hold that the judgment is void pursuant to the automatic stay provision of federal bankruptcy law, 11 U.S.C. § 362(a)(1) (1994), because Dr. Jones filed a petition for bankruptcy several months before the case was first scheduled for trial, thereby triggering the automatic stay. Although Dr. Jones never informed the court or Mr. Cain of the bankruptcy filing until almost a month after the judgment was entered against him, the judgment violates the stay and thus is necessarily void. We therefore vacate the trial court's judgment. However, we do so without prejudice, thus enabling Mr. Cain to petition the bankruptcy court to annul the stay retroactively and have the judgment reinstated.

I

In December 1990 Courtney and Estelle Cain lived in a house on Clay Street, Northeast. Mrs. Cain alone had rented the home from its owner, Dr. Jones. Although Mr. Cain's name was not on the lease, Dr. Jones was aware that he lived in the house and did not object to his being there. A few days before Christmas, however, Mrs. Cain moved out of the house as a result of marital difficulties. Dr. Jones then locked Mr. Cain out of the house on December 24 and subsequently disposed of the personal property that was left inside.

At trial Dr. Jones raised an abandonment defense. He claimed that the house had been rented to Mrs. Cain and that, when the couple separated, Mr. Cain abandoned what had been the marital home. Dr. Jones also maintained that he did not lock Mr. Cain out of the house and could not have done so because his mother had died on December 22, and he was preoccupied with making arrangements for her funeral at the time of the alleged eviction. The parties stipulated that Dr. Jones was in Memphis, Tennessee, from December 27 through December 29, attending his mother's funeral.

Mr. and Mrs. Cain filed this suit on June 26, 1991, asserting a claim for wrongful eviction against Dr. Jones and KAJ Associates, Inc., the corporation in whose name Dr. Jones rented the house to the Cains. Initially, in March 1992, Mr. Cain obtained a default judgment against Dr. Jones and KAJ Associates. That judgment, however, was later vacated, and trial was scheduled to begin on December 6, 1993.

On June 4, 1993, Dr. Jones filed a petition for bankruptcy in the United States Bankruptcy Court, thereby triggering the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a) (1994). Although he was represented by counsel at the time, neither Jones nor his attorney informed the trial court of the bankruptcy filing. On November 8 the court continued the December 6 trial date at the request of Mr. Cain. Less than a month later, Dr. Jones' attorney filed a motion to withdraw as counsel for Dr. Jones and KAJ. Despite Dr. Jones' opposition, the court granted the motion on February 18, 1994. Dr. Jones thereafter appeared pro se at a pretrial conference and unsuccessfully moved for summary judgment.

On September 5, 1995, the day that the trial was finally set to begin, a new attorney entered an appearance as pro bono counsel for Dr. Jones and asked for a continuance to prepare for trial. The judge denied counsel's request, explaining, "We do not grant continuances on the day of trial, and certainly do not grant continuances without motions. And the fact that counsel has just been retained in the eleventh hour is certainly not grounds." The trial then began, and at its conclusion the jury returned a verdict for Mr. Cain, awarding him $10,000 in compensatory damages and $2,000 in punitive damages. The court entered judgment on that verdict.

On October 6 Dr. Jones, through counsel, filed both a timely notice of appeal and a motion to stay the judgment based on the bankruptcy petition Jones had filed more than two years earlier. This was the first time that the court and Mr. Cain were made aware of the bankruptcy proceedings. The motion was granted, and the judgment was stayed, as was the present appeal, until the bankruptcy petition was dismissed. See Ellison v. Northwest Engineering Co., 707 F.2d 1310, 1311 (11th Cir.1983)

(automatic stay applies to appeals); Association of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446, 449 (3d Cir.1982) (same). The stay was then lifted, and the appeal proceeded to briefing and oral argument.

II

We begin our discussion with the matter of the bankruptcy stay, since it is dispositive of the case. The automatic stay provision of the federal bankruptcy code, 11 U.S.C. § 362(a), is "`one of the fundamental debtor protections provided by the bankruptcy laws.'" Midlantic Nat'l Bank v. New Jersey Dep't of Environmental Protection, 474 U.S. 494, 503, 106 S.Ct. 755, 88 L.Ed.2d 859 (1986) (quoting S.REP. No. 95-989, at 54 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5840; H.R.REP. No. 95-595, at 340 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6296); accord, e.g., In re Soares, 107 F.3d 969, 975 (1st Cir.1997)

. Section 362(a) provides, in pertinent part:

[A] petition filed under [the Bankruptcy Act] ... operates as a stay, applicable to all entities, of ... the commencement or continuation ... of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under [the Bankruptcy Act].

11 U.S.C. § 362(a)(1). The automatic stay gives the debtor a breathing spell from his creditors by stopping collection efforts, harassment, and foreclosure actions, and protects creditors by providing for an orderly liquidation of the debtor's assets. See Checkers Drive-In Restaurants, Inc. v. Commissioner of Patents & Trademarks, 311 U.S.App. D.C. 188, 192, 51 F.3d 1078, 1082,

cert. denied, 516 U.S. 866, 116 S.Ct. 182, 133 L.Ed.2d 120 (1995); S.REP. No. 95-989, at 54-55, reprinted in 1978 U.S.C.C.A.N. at 5840-41; H.R. REP. No. 95-595, at 340, reprinted in 1978 U.S.C.C.A.N. at 6296-97. "To effectuate these congressional purposes, section 362(a) generally must be construed broadly." Checkers Drive In, 311 U.S.App. D.C. at 192,

51 F.3d at 1082 (citations omitted); see Midlantic Nat'l Bank,

474 U.S. at 504,

106 S.Ct. 755 ("in enacting § 362 in 1978, Congress significantly broadened the scope of the automatic stay"); In re Calder, 907 F.2d 953, 956 (10th Cir.1990); Morgan Guaranty Trust Co. v. American Savings & Loan Ass'n, 804 F.2d 1487, 1491 (9th Cir.1986),

cert. denied, 482 U.S. 929, 107 S.Ct. 3214, 96 L.Ed.2d 701 (1987); McDonell v. Eggestein, 357 N.W.2d 168, 170 (Minn.Ct.App. 1984). Thus, as the statutory language directs, "[t]he filing of a bankruptcy petition acts as an automatic stay of all judicial proceedings pending against the debtor." Corto v. National Scenery Studios, Inc., 705 A.2d 615, 620 (D.C.1997); accord, Peare v. Jackson, 777 A.2d 822, 824 (D.C. 2001). The stay "extends to virtually all formal and informal actions against property of the bankrupt estate." In re Smith, 876 F.2d 524, 525-526 (6th Cir.1989). It "remains in effect until the bankruptcy court lifts it ... or the bankruptcy case ends." Peare, 777 A.2d at 824 (citation omitted).

Mr. Cain attempts to avoid the broad reach of the automatic stay provision by arguing that the property at issue was not Dr. Jones' property and therefore not part of the bankrupt estate. Cain claims that because the automatic stay is designed to preserve the remainder of the debtor's insolvent estate and to prevent a scramble for the debtor's assets, an action which involves only property that does not belong to the debtor "is neither connected with nor interfering with the bankruptcy proceeding" and therefore should not be affected by the stay. See In re Holtkamp, 669 F.2d 505, 508 (7th Cir.1982)

. We are not persuaded.

The breadth of the automatic stay, while not unlimited, see Checkers Drive-In, 311 U.S.App. D.C. at 192,

51 F.3d at 1082, surely extends to actions for conversion in which ownership of the allegedly converted property is at issue. Furthermore, in this case Cain demanded more than merely the return of his property. He sought (and obtained) damages for the value of the possessions he left in the house, as well as compensatory and punitive damages for wrongful eviction. Even if this case were limited to the personal property that was left in the house, we would be reluctant to determine the scope of the stay because such determinations are generally entrusted to the bankruptcy court. See Powell v. Washington Land Co., 684 A.2d 769, 774 (D.C.1996) (Schwelb, J. concurring); see also In re 48th Street Steakhouse, Inc., 835 F.2d 427, 430-431 (2d Cir.1987) (notice of termination of lease affected sublease and therefore violated automatic stay), cert. denied, 485 U.S. 1035, 108 S.Ct. 1596, 99...