Pointer, Matter of
| Decision Date | 14 January 1992 |
| Docket Number | No. 90-7072,90-7072 |
| Citation | 952 F.2d 82 |
| Parties | 26 Collier Bankr.Cas.2d 551, 22 Bankr.Ct.Dec. 799, Bankr. L. Rep. P 74,439 In the Matter of Martha Jo POINTER, Debtor. CITY OF FARMERS BRANCH and Carrollton-Farmers Branch Independent School District, Appellants, v. Martha Jo POINTER, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
James E. Porter, Perdue, Brandon, Fielder, Collins & Mott, Arlington, Tex., for City of Farmers.
Earl Luna, Steven L. Eason, Michael L. Atchley, Dallas, Tex., for Carrollton-Farmers Branch.
Michael W. Deeds, Sydna H. Gordon, Dallas, Tex., for amicus--Cities of Arlington, et al.
Kent M. Rider, Calame, Linebarger & Graham, Austin, Tex., for amicus--Duval County, Tex.
Charles E. Klein, Richard Scott Steinbach, Steinbach & Steinbach, Dallas, Tex., for appellee.
Edith Stuart Phillips, Asst. Atty. Gen., Dan Morales, Atty. Gen., Collections Div., Austin, Tex., for amicus--Comptroller of Pub. Accts. State of Tex.
Appeal from the United States District Court for the Northern District of Texas.
Before KING, JOHNSON and EMILIO M. GARZA, Circuit Judges.
Carrollton-Farmers Branch Independent School District and the City of Farmers Branch (collectively, the "Taxing Units") appeal from an order of the district court affirming the bankruptcy court's determination that the automatic stay of 11 U.S.C. § 362 barred the Taxing Units from obtaining tax liens for post-petition ad valorem property taxes for the years 1987 and 1988 on property currently owned by Martha Jo Pointer. The Taxing Units also appeal the lower courts' determinations that they are not entitled to post-petition penalties, fees, and costs for unpaid 1985 and 1986 ad valorem property taxes secured by valid liens.
The principal question presented for our review, and one extensively briefed by the parties and amici curiae, is whether Texas ad valorem tax liens, which arise by operation of law, 1 violate the automatic stay when they attach, post-petition, to property of a bankruptcy estate. This is an issue that has divided the circuits, compare In re Parr Meadows Racing Ass'n, 880 F.2d 1540, 1546 (2d Cir.1989) (), cert. denied, 493 U.S. 1058, 110 S.Ct. 869, 107 L.Ed.2d 953 (1990), and Equibank, N.A. v. Wheeling-Pittsburg Steel Corp., 884 F.2d 80, 84 (3d Cir.1989) (same), with Maryland Nat'l Bank v. Mayor of Baltimore, 723 F.2d 1138, 1142-43 (4th Cir.1983) (). 2 We are unable to address this issue here, however, because we hold that Pointer lacked standing under the Bankruptcy Code to avoid the post-petition tax liens as violative of the stay. We are therefore compelled to reverse the judgment below as to that issue. As to the Taxing Units' claim for post-petition penalties, fees, and costs for unpaid taxes secured by the valid, pre-petition liens, we affirm the judgment of the district court.
The facts in this case are stipulated. Gerald Pointer built an apartment complex in Farmers Branch, Texas. He owned the complex, which he called the "Valwood Village Apartments," until 1977, when he sold the complex. As partial consideration for the sale, Gerald Pointer accepted a promissory note secured by a deed of trust that granted him a lien on the apartment complex. In 1982, Gerald Pointer divorced his wife, Martha Jo Pointer. In the divorce decree, Martha Jo Pointer ("Pointer") was awarded the promissory note and the deed of trust on the Valwood Village Apartments.
During the early 1980s, ownership of the Valwood Village Apartments frequently changed hands. All transfers of the property, however, remained subject to the lien that Pointer held on the property. In 1986, Valwood Village Apartments, Ltd. ("VVAL") owned the apartment complex. VVAL was forced into involuntary bankruptcy on April 25, 1986. Its bankruptcy case is currently pending in the Northern District of Texas.
On November 16, 1987, Pointer herself filed a petition for relief under chapter 11 of the United States Bankruptcy Code. Three months later, Pointer filed a motion for relief from the automatic stay in the VVAL bankruptcy proceedings. On June 9, 1988, the bankruptcy court presiding over the VVAL bankruptcy lifted the automatic stay to permit Pointer to foreclose her lien on the Valwood Village Apartments. Pointer conducted a foreclosure sale of the property where she was the high bidder, and consequently purchased the apartment complex.
The Taxing Units filed a proof of claim against the Pointer estate seeking, inter alia, payment of the taxes allegedly secured by the liens at issue, and penalties, fees, and costs attributable to the unpaid taxes. On January 16, 1990, Pointer filed an adversary proceeding to determine the extent and validity of the ad valorem tax liens claimed by the Taxing Units for the years 1987 and 1988. Pointer argued that § 362(a)(4) of the Bankruptcy Code prohibited the Taxing Units from taking any action to create or perfect any tax liens against the apartment complex after April 25, 1986, the date on which the involuntary petition against VVAL was filed. 3 The bankruptcy court agreed, 113 B.R. 285, ruling that the Taxing Units held valid tax liens against the Valwood Village Apartments to secure ad valorem property taxes for the pre-petition year of 1985 and for 1986, the year in which the VVAL bankruptcy was filed, but that they did not hold valid tax liens for the post-petition years of 1987 and 1988. Pointer's complaint also alleged that the Taxing Units' liens for 1985 and 1986, the validity of which she does not contest, do not secure the payment of post-petition penalties, fees, or costs. The bankruptcy court again agreed, ruling that the valid 1985 and 1986 tax liens did not secure the payment of penalties, fees, and costs for Pointer's non-payment of the 1985 and 1986 taxes. The district court affirmed in all respects the judgment of the bankruptcy court.
On appeal, the Taxing Units contend that the automatic stay should not prevent them from obtaining tax lien status for post-petition 1987 and 1988 taxes. The Taxing Units also contend that they are entitled to penalties, fees, and costs on the unpaid ad valorem taxes secured by valid liens for the pre-petition years 1985 and 1986.
Pointer contends that the post-petition ad valorem tax liens on the apartment complex are invalid because their attachment violated the automatic stay of 11 U.S.C. § 362. The issue of whether Pointer, as a creditor of the VVAL estate, has standing to seek avoidance of the tax liens as violative of the VVAL automatic stay is a threshold issue, and one of first impression in this circuit.
The question of whether a creditor has standing to seek relief for an alleged violation of the automatic stay by another creditor requires two separate inquiries. The first is whether the creditor has standing under the Constitution and certain prudential concepts that have developed to limit constitutional standing. The second is whether the creditor has standing under the Bankruptcy Code. We address these inquiries in turn.
The Supreme Court in Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975), stated that a plaintiff's standing depends on "whether the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal court jurisdiction and to justify exercise of the court's remedial powers on his behalf." The test for standing includes elements mandated by Article III as well as non-constitutional prudential considerations. 6A James W. Moore & Jo Desha Lucas, Moore's Federal Practice p 57.11, at 57-93 (2d ed. 1991). The Court summarized these elements in Gladstone Realtors v. Village of Bellwood:
The constitutional limits on standing eliminate claims in which the plaintiff has failed to make out a case or controversy between himself and the defendant. In order to satisfy Art. III, the plaintiff must show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant. Otherwise, the exercise of federal jurisdiction "would be gratuitous and thus inconsistent with the Art. III limitation."
Even when a case falls within these constitutional boundaries, a plaintiff may still lack standing under the prudential principles by which the judiciary seeks to avoid deciding questions of broad social import where no individual rights would be vindicated and to limit access to the federal courts to those litigants best suited to assert a particular claim....
Congress may, by legislation, expand standing to the full extent permitted by Art. III, thus permitting litigation by one "who otherwise would be barred by prudential standing rules." In no event, however, may Congress abrogate the Art. III minima: A plaintiff must always have suffered "a distinct and palpable injury to himself," that is likely to be redressed if the requested relief is granted.
441 U.S. 91, 99-100, 99 S.Ct. 1601, 1607-08, 60 L.Ed.2d 66 (1979) (footnotes and citations omitted). In order to assert constitutional standing, a plaintiff must therefore allege (1) a personal injury (2) fairly traceable to the defendant's allegedly unlawful conduct, which is (3) likely to be redressed by the requested relief. Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984)).
Pointer can certainly show here that she has suffered palpable injury, which was caused by the Taxing Units' alleged stay violations. If the actions by the Taxing Units to create and perfect the ad valorem tax liens are deemed valid, Pointer's property may well be seized to satisfy VVAL's delinquent taxes. Finally, the bankruptcy court can redress...
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