Assoc. of St. Croix Condominium Owners v. St. Croix Hotel Corp.
| Decision Date | 09 July 1982 |
| Docket Number | 81-2993,Nos. 81-2992,s. 81-2992 |
| Citation | 682 F.2d 446 |
| Parties | 7 Collier Bankr.Cas.2d 137, 9 Bankr.Ct.Dec. 462 ASSOC. OF ST. CROIX CONDOMINIUM OWNERS v. ST. CROIX HOTEL CORP. ASSOC. OF ST. CROIX CONDOMINIUM OWNERS v. The ST. CROIX HOTEL CORP. Appeal of ST. CROIX HOTEL CORPORATION. ASSOC. OF ST. CROIX CONDOMINIUM OWNERS v. ST. CROIX HOTEL CORP. ASSOC. OF ST. CROIX CONDOMINIUM OWNERS v. The ST. CROIX HOTEL CORP. Appeal of ASSOCIATION OF ST. CROIX CONDOMINIUM OWNERS. |
| Court | U.S. Court of Appeals — Third Circuit |
Warner Alexander (argued), Christiansted, St. Croix, V. I., for appellant-cross appellee St. Croix Hotel Corp.
Joel H. Holt (argued), Law Offices of Joel H. Holt, Christiansted, St. Croix, U. S. V. I., for appellee-cross appellant Ass'n of St. Croix Condominium Owners.
Before GARTH, ROSENN and HIGGINBOTHAM, Circuit Judges.
This is an appeal from a final order of the district court affirming in part, and vacating and remanding in part, the judgment of the Virgin Islands Territorial Court. In an action on a lease by the Association of St. Croix Condominium Owners (the Association), the Territorial Court awarded the Association $2,147.31 in past due rent and water charges and ordered the eviction of St. Croix Hotel Corp. for its failure to comply with its obligation to maintain the leasehold premises. The Territorial Court, however, awarded the Hotel $1,800 on its counterclaim. After both parties made applications for attorneys' fees and costs, the Territorial Court awarded the Association $1,545.00 in fees and costs, but did not make an award to the Hotel.
On appeal, the District Court of the Virgin Islands vacated the order of eviction and remanded the question of the Hotel's continued possession for a determination as to whether the Hotel had remedied the breach of its maintenance obligation prior to judgment, so as to come within the protective provision of V.I. Code Ann. tit. 28, § 292(a). 1 In addition, since the Territorial Court did not set forth its reasons for denying attorney's fees to the Hotel, although the Hotel had prevailed on its counterclaim, see V.I. Code Ann. tit. 5, § 541(b), the District Court remanded that question for an articulation by the Territorial Court. Both parties then appealed to this court.
When the briefs of the parties were filed with this court, it was revealed in one brief that a petition for reorganization under chapter 11 of the Bankruptcy Code had been filed by the Hotel. There was no other mention of the bankruptcy proceedings in the record. We requested supplementary memoranda on the effect of the bankruptcy proceeding on the instant action, particularly in light of the automatic stay provision of section 362 of the Bankruptcy Code, 11 U.S.C. § 362 (Supp. II 1978). Such memoranda were filed by counsel. After reviewing the memoranda it remained unclear whether the bankruptcy judge had entered an order granting relief from any automatic stay that might have gone into effect pursuant to section 362. Upon inquiry to counsel, we were informed that no order of the Bankruptcy Court appears in the record.
Section 362 provides:
Automatic stay
(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of-
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title.
11 U.S.C. § 362 (Supp. II 1978) (emphasis added). Section 362(d) provides that upon request of "a party in interest" the court can grant relief from the stay after notice and a hearing. Id. § 362(d).
In explaining the purpose of the automatic stay, the House Report accompanying the Bankruptcy Reform Act of 1978 states:
The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan or simply to be relieved of the financial pressures that drove him into bankruptcy.
The automatic stay also provides creditor protection. Without it, certain creditors would be able to pursue their own remedies against the debtor's property. Those who acted first would obtain payment of the claims in preference to and to the detriment of other creditors....
Subsection (a) defines the scope of the automatic stay, by listing the acts that are stayed by the commencement of the case. The commencement or continuation, including the issuance of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the bankruptcy case is stayed under paragraph (1). The scope of this paragraph is broad. All proceedings are stayed, including arbitration, license revocation, administrative, and judicial proceedings. Proceeding in this sense encompasses civil actions as well, and all proceedings even if they are not before governmental tribunals.
H.R.Rep.No.95-595, 95th Cong., 1st Sess. 340 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5963, 6296-97.
Under the old Bankruptcy Act, a debtor apparently could waive a stay. Under the new Code, relief from a stay must be authorized by the Bankruptcy Court to prevent certain creditors from gaining a preference for their claims against the debtor; to...
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