Freeman v. King
OPINION. Signed by Honorable Judge Myron H. Thompson on 8/17/11. Furnished to bankruptcy clerk via this notice.(djy, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION
JESSE LEWIS FREEMAN,
JESSE LEWIS FREEMAN,
GLADYS F. KING,
CIVIL ACTION NO.
Appellant Jesse Lewis Freeman appeals a decision by
the Bankruptcy Court of the Middle District of Alabama
that lifted an automatic stay of a state-court proceeding
For the reasons that follow, the bankruptcy
court’s decision will be affirmed.
STANDARD OF REVIEW
“The district court in a bankruptcy appeal functions
as an appellate court in reviewing the bankruptcy court's
In re Sublett, 895 F.2d 1381, 1383 (11th Cir.
Acting in its appellate capacity, the district
court reviews a bankruptcy court’s conclusions of law de
novo and its factual findings under a clearly erroneous
Dionne v. Simmons, 200 F.3d 738, 741 (11th
In 2006, appellee Gladys F. King filed a civil action
in a state court, seeking to quiet title to a parcel of
Freeman is named as one of 83 defendants
in that suit.
King alleges that Freeman owns only a
contends that he owns the entire interest having acquired
it by adverse possession from the other heirs.
February 19 and April 21, 2008, Freeman attempted to
remove the state lawsuit to federal court.
The case was
On November 18, 2008, Freeman filed a Chapter 13
bankruptcy petition in the Middle District of Alabama
The bankruptcy court confirmed the
Chapter 13 Plan on June 16, 2009.
Pursuant to 11 U.S.C.
§ 362(a), an automatic stay was placed on any pending
judicial proceeding against the debtor’s property.
On June 15, 2009, King filed a motion seeking relief
from the automatic stay so that her state lawsuit to
quiet title could go forward.
On July 13, 2010, the
bankruptcy court held a teleconference hearing on King’s
Freeman did not participate in the hearing or
offer any briefing or evidence in opposition to the
The bankruptcy court found sufficient cause to
grant relief from the automatic stay, permitting the
state court to hear King’s lawsuit.
On July 20, 2010, Freeman filed a motion to vacate
the order suspending the automatic stay.
bankruptcy court denied this motion, Freeman filed an
December 22, 2010, the bankruptcy court denied Freeman’s
renewed motion to stay state-court proceeding pending
resolution of this appeal.
Freeman’s appeal is without merit.
In his brief,
Freeman presents virtually no issue of law or fact for
Freeman includes only two sentences of
argument in his initial brief.
His argument revolves
around alleged infirmities in the state-court civil suit,
a matter that is irrelevant to the bankruptcy court’s
decision to lift the stay.
Freeman raises only two
issues that have any bearing on the propriety of the
bankruptcy court’s order: first, whether the bankruptcy
court gave adequate notice to Freeman before the hearing
on King’s motion and, second, whether the bankruptcy
court erred in granting King relief from the automatic
This court holds that the bankruptcy court acted
properly in both instances.
First, Freeman’s argument that he was denied due
process is without merit.
Freeman concedes that he
received notice of King’s motion and was advised that a
teleconference would be held on July 13, 2010.
he objects that the bankruptcy court did not dial out to
his telephone on the date of the July 13 hearing.
process under the bankruptcy statute requires “notice”
and “a reasonable opportunity to be heard.”
New York v.
New York, N. H. & H. R. Co., 344 U.S. 293, 297 (1953).
A direct call to a personal telephone was not required to
give Freeman a reasonable opportunity to be heard.
bankruptcy court sent notice of the July 13 hearing on
June 17, 2010.
The notice provided a toll free telephone
number and included the following instruction: “Each
services at least 5 minutes prior to the commencement of
questions or confusion, it was incumbent upon him to
contact the bankruptcy court for additional guidance.
participate in the hearing.
Next, Freeman questions whether the bankruptcy court
erred in granting King relief from the automatic stay.
A Chapter 13 bankruptcy petition “operates as a stay,
applicable to all entities, of ... (1) the commencement
or continuation ... of a judicial, administrative or
other action against the debtor that was or could have
been commenced before the [bankruptcy petition] ... (3)
any act to obtain property from the estate or to exercise
Pursuant to 11 U.S.C. § 362(d), the bankruptcy court
may suspend the automatic stay, “On request of a party in
interest and after notice and a hearing.”
Relief from an
automatic stay may be granted for a variety of reasons,
including “for cause.”
11 U.S.C. § 362(d)(1).
determine whether cause exists to grant relief from the
automatic stay, courts balance a variety of equities
including: “(1) trial readiness; (2) judicial economy;
(3) the resolution of preliminary bankruptcy issues; (4)
costs of defense or other potential burden to the estate;
(5) the creditor's chances of success on the merits; (6)
specialized expertise of the non-bankruptcy forum; (7)
whether the damages or claim that may result from the
nonbankruptcy proceeding may be subject to equitable
subordination under Section 510(c); (8) the extent to
which trial of the case in the non-bankruptcy forum will
interfere with the progress of the bankruptcy case; (9)
nondebtors, if the stay is lifted; and, (10) the presence
of third parties over which the bankruptcy court lacks
In re Marvin Johnson's Auto Serv., 192
B.R. 1008, 1014 (Bankr. N.D. Ala. 1996) (Cohen, B.J.).
The court affirms the bankruptcy court’s decision to
lift the automatic stay.
It is clear that some judicial
forum will eventually have to determine Freeman’s and the
other 83 defendants’ interests in the subject property.
All of the factors listed above favor permitting this
issue to be litigated in state court.
The state lawsuit
has been pending for almost five years and the laborious
process of notifying and serving 83 defendants has been
It would be extremely costly and a
waste of judicial resources to restart this process in
Since King’s claim involves a state-
Furthermore, permitting King’s action to proceed will
have little impact on Freeman’s Chapter 13 bankruptcy
Contrary to Freeman’s protestations, the civil
legitimate interest in the contested land.
For the foregoing reasons, the court holds that the
bankruptcy court did not err in lifting the automatic
stay on King’s lawsuit in state court.
judgment will be entered affirming the decision of the
DONE, this the 17th day of August, 2011.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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