BUDZYN v. CITIBANK SOUTH DAKOTA (2010)

ORDER ON CONTINUING ABATEMENT

On March 25, 2010, this Court issued an opinion and judgment in the above-referenced cause. Thereafter, appellant filed a motion to vacate the opinion, stating that, before this Court's opinion issued, appellant had filed a Chapter 7 Bankruptcy proceeding. The motion also stated that “[a]ppellant's counsel were not aware of this filing and learned of same after they apprised Appellant of the Court's opinion.” Attached to the motion to vacate was a copy of the bankruptcy petition filed by appellant in the federal Bankruptcy Court for the Northern District of Illinois, cause no.10-04838, which was filed on February 9, 2010.

11 U.S.C. § 362(a) provides that once a petition in bankruptcy is filed, it operates as an automatic stay against the commencement or continuation of any judicial, administrative, or other proceeding against the debtor. Any actions taken in violation of the automatic stay, including judgments or other court actions, are voided. Kalb v. Feuerstein, 308 U.S. 433, 440 (1940); Greenberg v. Fincher & Son Real Estate, 753 S.W.2d 506, 506 (Tex. App-Houston [1st Dist.] 1988) (order); Wallen v. State, 667 S.W.2d 621, 623 (Tex.App.-Austin 1984, no writ). Because an appeal is a continuation of judicial action, it is automatically stayed if it is “against the debtor.” 11 U.S.C. § 362(a); Greenberg, 753 S.W.2d at 506. Generally, if the debtor was the plaintiff in the court below, the stay does not apply; if the debtor was the defendant, as was the case here, any further action is stayed. Marcus, Stowell & Beye Gov't Sec., Inc. v. Jefferson Inv. Corp., 797 F.2d 227, 230 n. 4 (5th Cir.1986).

Rule 8.1 of the Texas Rules of Appellate Procedure provides that any party may file a notice that a party is in bankruptcy. Rule 8.2 of the Texas Rules of Appellate Procedure reads as follows:

A bankruptcy suspends the appeal and all periods in these rules from the date when the bankruptcy petition is filed until the appellate court reinstates or severs the appeal in accordance with federal law. A period that began to run and had not expired at the time the proceeding was suspended begins anew when the proceeding is reinstated or severed under 8.3. A document filed by a party while the proceeding is suspended will be deemed filed on the same day, but after, the court reinstates or severs the appeal and will not be considered ineffective because it was filed while the proceeding was suspended.

(Emphasis added.)

Rule 8.3 of the Texas Rules of Appellate Procedure provides that a party may move the appellate court to reinstate the appeal if permitted by federal law or the bankruptcy court. It also provides that a party may move to sever the appeal with respect to the bankrupt party and to reinstate the appeal with respect to the other parties.

By virtue of Tex.R.App. P. 8.2, the Court stays the entire appeal. We also withdraw our opinion and judgment of March 25, 2010. This order does not preclude reissuance of the same opinion and judgment once the bankruptcy stay is lifted. Howell v.. Thompson, 839 S.W.2d 92 (Tex.1992) (order).

The parties are ordered to notify this Court when the bankruptcy stay is lifted, by termination of the bankruptcy or otherwise.

In view of the stay, the Court will not rule on any pending motions until the stay is lifted.

It is so ORDERED.

PER CURIAM.