IN RE: Robert Phillip GARCIA; Elizabeth Pauline Garcia (2018)

ORDER AND JUDGMENT *

In this appeal from the bankruptcy court, Carl Davis, a Chapter 13 Trustee, asks us to hold that the so-called “automatic stay” contained within 11 U.S.C. § 362(a) encompasses not only affirmative conduct against the property of the bankruptcy estate, but also any liens that may nonetheless arise in the absence of affirmative conduct. According to the Trustee, Tyson Prepared Foods’s lien—which arose in the aftermath of post-petition worker-compensation payments to the debtor—violates the automatic stay.

In an adversary proceeding initiated by the Trustee, the bankruptcy court relied on our decision in WD Equip., LLC v. Cowen (In re: Cowen), 849 F.3d 943 (10th Cir. 2017), to conclude that Tyson’s subrogation lien was both valid and enforceable. In Cowen, we held the meaning of “act” for the purposes of 11 U.S.C. § 362(a)(3) is limited to affirmative conduct. Id. On appeal, both parties concede that Cowen controls the outcome of this case. But the Trustee nonetheless asks this panel to reconsider Cowen, or—at a minimum—to call its reasoning into question.

Absent en banc review or intervening Supreme Court precedent, it is well-settled that one panel of the Tenth Circuit cannot overturn the work of another. United States v. Meyers, 200 F.3d 715, 720 (10th Cir. 2000) (“The precedent of prior panels which this court must follow includes not only the very narrow holdings of those prior cases, but also the reasoning underlying those holdings, particularly when such reasoning articulates a point of law.”). Since the Trustee argues only that Cowen was wrongly decided, this principle marks both the beginning and the end of our inquiry.

In Cowen, we construed the same statutory term—albeit for the purposes of 11 U.S.C. § 362(a)(3), rather than § 362(a)(4)—to encompass only affirmative conduct. 849 F.3d at 948.¹ Both parties concede that the same term must be construed in the same way within the same statute, in keeping with well-recognized rules for statutory interpretation. Cf. A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts, 170–74 (2012) (on the “Presumption of Consistent Usage”).

Accordingly, when construing the text of § 362(a)(4) at issue in this case—which proscribes “any act to create, perfect, or enforce any lien”—we, too, must read the statutory term “act” to encompass only affirmative conduct on the part of the lienholder. As it is undisputed that Tyson’s subrogation lien arose solely by operation of law, the logic and the holding of Cowen compel our conclusion that the lien is valid and enforceable, and that no violation of the automatic stay has occurred.²

The judgment of the bankruptcy court is accordingly AFFIRMED.

FOOTNOTES

1.   The common statutory language that stands at the center of both this case and Cowen appears frequently throughout § 362(a) as operative language for establishing the boundaries of the automatic stay. See 11 U.S.C. § 362(a)(3)-(a)(6) (“any act ․”). The statutory provision at issue in Cowen reads “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate.” 11 U.S.C. § 362(a)(3). The statutory provision at issue here reads “any act to create, perfect, or enforce any lien against property of the estate.” 11 U.S.C. § 362(a)(4).

2.   In the event this panel were so inclined to revisit Cowen, Tyson maintains several alternative grounds for distinguishing this case. At oral argument, counsel emphasized that—unlike in other cases that address this issue—the underlying financial transactions here took place post- rather than pre-petition, such that Tyson’s payments to the debtor had the effect of benefitting the bankruptcy estate. In briefing, Tyson likewise contends that 11 U.S.C. § 362(a) is not applicable to the facts of this case because § 362(a) stays only the acts of “entities,” rather than claims arising solely by operation of law. We need not reach these questions since Cowen controls regardless.

Timothy M. Tymkovich, Chief Judge