Wombles v. Hagans (CONSENT)
MEMORANDUM OPINION AND ORDER: Defendant's Motion to Dismiss 3 is GRANTED. Signed by Honorable Judge Terry F. Moorer on 11/14/2012. (jg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
CASE NO. 3:12-cv-532-TFM
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant’s Motion to Dismiss (Doc. 3, filed June 28,
2012). The Court has carefully reviewed the Motion to Dismiss, the briefs filed in support
of and in opposition to the motion, and the supporting and opposing evidentiary materials.
For good cause, the Court orders that the defendant’s Motion be GRANTED.
The district court has diversity jurisdiction over the claims in this action pursuant to
28 U.S.C. § 1332. The plaintiff is a resident and citizen of of Phenix City, Russell County,
Alabama, and the defendant is a resident and citizen of the State of Georgia. See Doc. 1 at
3. The plaintiff’s complaint alleges that she is entitled to damages in the amount of
$100,000, plus costs; thus the amount in controversy exceeds $75,000.00. The parties do
not contest personal jurisdiction or venue, and there are adequate allegations to support both.
II. STANDARD OF REVIEW
A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint.
Gilmore v. Day, 125 F. Supp.2d 468, 471 (M.D. Ala. 2000). It is a low threshold for the nonmoving party to survive a motion to dismiss for failure to state a claim in order to reflect the
liberal pleading requirements set forth in the Federal Rules of Civil Procedure. Ancata v.
Prison Health Services., Inc., 769 F.2d 700, 703 (11th Cir. 1985); see Gilmore, 125
F.Supp.2d at 471 (citing Ancata). In deciding a 12(b)(6) motion to dismiss, the court will
accept the petitioner’s allegations as true. Hishon v. King & Spalding, 467 U.S. 69, 73, 104
S.Ct. 2229, 2232, 81 L. Ed.2d 59 (1984); Ellis v. General Motors Acceptance Corp., 160
F.3d 703, 706 (11th Cir. 1998); Roberts v. Florida Power & Light Co., 146 F.3d 1305, 1307
(11th Cir. 1998) (citing Lopez v. First Union National Bank of Florida, 129 F.3d 1186, 1189
(11th Cir. 1997)). However, “[c]onclusory allegations, unwarranted deductions of facts or
legal conclusions masquerading as facts will not prevent dismissal.” Jackson v. BellSouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004) (quoting Oxford Asset Mgmt., Ltd. v.
Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)); see also Associated Builders, Inc. v.
Alabama Power Co., 505 F.2d 97, 100 (5th Cir. 1974) (conclusory allegations and
unwarranted deductions of fact are not admitted as true).1
On August 10, 2009, Ashley Wombles (“Plaintiff” or “Wombles”) was traveling
eastbound on U.S. Highway 80 in Phenix City, Russell County, Alabama. See Doc. 1-3 at
Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981, en banc) (adopting as binding
precedent all of the decisions of the former Fifth Circuit handed down prior to the close of business on
September 30, 1981).
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1. Wombles was stopped for traffic behind another vehicle as a school bus was unloading
passengers. Id. Leonard Hagans (“Defendant” or “Hagans”) was traveling behind Wombles
at the time traffic came to a stop. Id. Wombles asserts that Hagans’ negligent operation of
his vehicle caused him to strike Wombles from the rear with such force that it caused
Wombles’ vehicle to lurch forward, colliding with the vehicle in front of her. Id. Wombles
was required to receive medical treatment as a result of the car accident. Id.
On August 10, 2011, Wombles filed a complaint in the Circuit Court of Russell
County, Alabama alleging negligence against Hagans. See Doc 1-3 at 3. On June 21, 2012,
Hagans filed a Notice of Removal, removing the claim from the Circuit Court of Russell
County, Alabama to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. §
1332. See Doc. 1. On June 28, 2012, Hagans filed the pending Motion to Dismiss alleging
that the filing of this action is in violation of the prescribed two-year statute of limitations for
personal injury claims set forth in ALA. CODE § 6-2-38. See Doc. 3. Prior to the instant
action being filed, Hagans filed a petition for relief under Chapter 13 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Middle District of Georgia, Macon Division on
June 10, 2010. See Doc. 17 at 1. The filing of the Chapter 13 petition placed an automatic
stay subject to 11 U.S.C. § 362 on all judicial proceedings against the debtor, Hagans. See
Doc. 4 at 4. On November 8, 2011, Wombles received notice of the stay. On March 29,
2012, Wombles requested relief from the stay via consent order from Hagans’ bankruptcy
attorney. See Doc. 17 at 1. The consent order was never finalized and submitted to the
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bankruptcy court. See Doc. 17 at 2. However, on May 23, 2012, the bankruptcy proceeding
was dismissed. See Doc. 20 at 5.
IV. DISCUSSION AND ANALYSIS
Defendant argues that the filing of the complaint in the instant action violated the
automatic stay that was issued after the filing of the Chapter 13 bankruptcy proceeding. See
Doc. 4 at 3. Defendant asserts that due to the automatic stay, any complaint filed against the
debtor is void. Id. Additionally, Defendant asserts that because Plaintiff filed the void
complaint on the last day possible to file within the two-year statute of limitations, Plaintiff
is now time-barred from refiling a complaint. See Doc. 4 at 3-4. However, Defendant
concedes that upon dismissal of the Chapter 13 bankruptcy proceeding, Plaintiff had a thirtyday window to refile this action, the commencement of which was previously stayed. See
Doc. 20 at 4-5 (citing 11 U.S.C. § 108(c)). Defendant asserts that Plaintiff had from May 23,
2012, through June 22, 2012 to dismiss the instant case and re-file in order to rectify the
voided complaint. See Doc. 20 at 5.
Plaintiff rebuts these assertions, and avers that at the time of filing the instant action,
she had no notice of the pending bankruptcy, thus she had no notice of the automatic stay.
See Doc. 17 at 4. It is well settled that a “debtor who has filed for [. . .] bankruptcy enjoys
an automatic stay against actions to enforce, collect, assess or recover claims against the
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debtor or against property of the estate.”2 United States v. White, 466 F.3d 1241, 1244 (11th
Cir. 2006) (citing 11 U.S.C. § 362(a)). “It is not necessary that the Debtor or the Court take
any affirmative action, such as entering a specific order, to give rise to the automatic stay as
the filing of the petition gives rise to the automatic stay.” In re Briskey, 258 B.R. 473, 476
(Bankr. M.D. Ala. 2001). As a result of the automatic stay provision in § 362(a) “[i]t is the
law of this Circuit that ‘[a]ctions taken in violation of the automatic stay are void and without
effect.’” Id. (quoting Borg-Warner Acceptance Corp. v. Hall, 685 F.2d 1306, 1308 (11th Cir.
1982)). It has been held that “even the initiation of a lawsuit against a debtor is prohibited
by the automatic stay.” In re State Airlines, Inc., 873 F.2d 264, 265 n. 1 (11th Cir. 1989).
However, the law still provides a plaintiff the opportunity to file an action against a debtor,
but they must seek “permission of the bankruptcy court before commencing the action
against the debtor.” Id.
Plaintiff’s argument rests on the notion that because she did not have notice of the
bankruptcy proceeding, it was impossible for her to seek permission from the bankruptcy
court. See Doc. 17 at 4. Plaintiff also asserts her diligence because upon receiving notice
of the pending bankruptcy proceeding and the automatic stay, she attempted to lift the stay
through the bankruptcy court. Plaintiff argues that her delay in seeking to lift the stay should
Although White involved a Chapter 11 bankruptcy proceeding, a Chapter 13 bankruptcy
proceeding similarly gives rise, “by operation of law, to an automatic stay which stays almost all actions
to collect preexisting indebtedness.” In re Briskey, 258 B.R. 473, 476 (Bankr. M.D. Ala. 2001) (citing 11
U.S.C. §§ 301, 362(a)).
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be exused because she did not receive consent from Defendant’s bankruptcy attorney in a
timely manner. Id.
Plaintiff’s argument fails for two reasons. First, several courts have held that “[e]ven
actions taken without notice of the bankruptcy are void ab initio.”3 In re Miller, 07-10184BKC-RBR, 2007 WL 656556 (Bankr. S.D. Fla. Feb. 27, 2007); see also In re Robinson, 0217467-WHD, 2006 WL 6593115, at *2 (Bankr. N.D. Ga. Oct. 12, 2006) (holding that the
case is stayed “even if the creditor acted without knowledge of the bankruptcy filing.”); and
In re Peralta, 317 B.R. 381, 389 (B.A.P. 9th Cir. 2004) (“Since the automatic stay is
effective against the world, regardless of notice, acts in violation of the stay are automatically
void ab initio.”). In fact, once Plaintiff received knowledge of the stay, she was required to
take affirmative action to undo the violation of the automatic stay. See In re Briskey, 258
B.R. 473, 477 (Bankr. M.D. Ala. 2001) (holding that “the creditor must not only cease from
taking any affirmative action which would violate the automatic stay, it must also take all
necessary affirmative action to stop proceedings which are in violation of the automatic
stay.”); and S. Dallas Water Auth. v. Guarantee Co. of N. Am., USA, 767 F. Supp. 2d 1284,
1297-98 (S.D. Ala. 2011) (finding that “as recognized in In re Miller, [07-10184-BKC-RBR,
2007 WL 656556 (Bankr. S.D. Fla. Feb. 27, 2007)] ‘[i]f a creditor acts without knowledge
of the bankruptcy in violation of the automatic stay it must affirmatively act immediately to
The Court recognizes that the Eleventh Circuit has yet to definitively rule on the issue, but the
overwhelming holdings of other courts is found to be persuasive for this Court’s determination of the
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restore the pre-violation status quo.’”). Since a complaint against a debtor is void ab initio,
Plaintiff’s lack of knowledge cannot serve as a basis to allow her void complaint to proceed.
Second, although the Court takes notice of Wombles’ good faith effort to lift the stay
by consulting with Defendant’s bankruptcy attorney, the fact is, no such permission was ever
granted. Plaintiff received Defendant’s Notice of Stay on November 8, 2011. See Docs. 17
at 3, 17-1 at 3. Plaintiff states that she immediately contacted Defendant’s bankruptcy
attorney to seek consent to this action. Id. Plaintiff sent a Motion for Relief from Stay and
a proposed consent order via e-mail on March 29, 2012. See Docs. 17 at 3-4, 17-1 at 6-12.
On April 10, 2012, Defendant’s bankruptcy attorney sent Plaintiff a signed copy of the
proposed order. See Docs. 17 at 4, 17-1 at 15. Plaintiff requested that an official copy be
signed and submitted to the bankruptcy court; however, no official copy was ever completed
or submitted. See Doc. 17-1 at 17. Although Plaintiff made a valiant effort to revive this
action, the submitted consent order signed by Defendant’s bankruptcy attorney is not enough
for this Court to override the stay placed by the bankruptcy proceeding. “[A]ctions taken in
violation of the automatic stay are void and have no effect unless the bankruptcy court later
annuls the automatic stay to validate the action.” In re Robinson, 02-17467-WHD, 2006 WL
6593115 (Bankr. N.D. Ga. Oct. 12, 2006) (citing In re Albany Partners, Ltd., 749 F.2d 670,
675 (11th Cir.1984); In re Ford, 296 B.R. 537 (Bankr.N.D.Ga.2003)). Similarly, “[t]he later
dismissal of a the debtor's case does not annul the automatic stay or render it void ab initio.”
Id. It is in the sole purview of the bankruptcy court to grant such relief, and because Plaintiff
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failed to follow through with assuring the consent order was submitted to the bankruptcy
court, this Court is unable to grant relief. Since the bankruptcy court never annulled the
automatic stay to validate this action, this action remains in violation of the automatic stay,
and the Complaint is void.
Plaintiff also argues that the U.S. Supreme Court has affirmed an equitable tolling4
provision of the statute of limitations, and applied it to bankruptcy in such a way that would
allow this Court to toll the statute of limitations in this case. See Doc. 17 at 5-6 (citing Young
v. United States, 535 U.S. 43, 122 S. Ct. 1036, 152 L.Ed.2d 79 (2002). The U.S. Supreme
Court stated that “[f]ederal courts have typically extended equitable relief only sparingly.”
Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 457, 112 L.Ed.2d 435
(1990). The U.S. Supreme Court “has permitted equitable tolling in situations ‘where the
claimant has actively pursued his judicial remedies by filing a defective pleading during the
statutory period, or where the complainant has been induced or tricked by his adversary's
misconduct into allowing the filing deadline to pass.’”5 Young v. United States, 535 U.S. 43,
Equitable tolling is defined as the “doctrine that the statute of limitations will not bar a claim if
the plaintiff, despite diligent efforts, did not discover the injury until after the limitations period had
expired.” Blacks Law Dictionary 579 (8th Ed. 1999).
Additionally, equitable tolling has been permitted in the federal courts where the “claimant has
received inadequate notice, see Gates v. Georgia–Pacific Corp., 492 F.2d 292 (CA9 1974); or where a
motion for appointment of counsel is pending and equity would justify tolling the statutory period until
the motion is acted upon, see Harris v. Walgreen's Distribution Center, 456 F.2d 588 (CA6 1972); or
where the court has led the plaintiff to believe that she had done everything required of her, see Carlile v.
South Routt School District RE 3–J, 652 F.2d 981 (CA10 1981). [Also] where affirmative misconduct on
the part of a defendant lulled the plaintiff into inaction. See Villasenor v. Lockheed Aircraft, Corp., 640
F.2d 207 (CA9 1981); Wilkerson v. Siegfried Insurance Agency, Inc., 621 F.2d 1042 (CA10 1980); Leake
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50, 122 S. Ct. 1036, 1041, 152 L. Ed. 2d 79 (2002) (quoting Irwin, 498 U.S. at 96, 111 S. Ct.
at 454). However, courts have “generally been much less forgiving [. . .] where the claimant
failed to exercise due diligence in preserving his legal rights.” Irwin, 498 U.S. at 96, 111 S.
Ct. at 458 (citing Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S. 147, 151, 104 S.Ct. 1723,
1725-26, 80 L.Ed.2d 196 (1984) (holding “One who fails to act diligently cannot invoke
equitable principles to excuse that lack of diligence.”))
Under bankruptcy law, the Plaintiff was given a second chance to restore her right to
bring this action. Subsection 108(c) provides in relevant part:
if applicable nonbankruptcy law [. . .] fixes a period for commencing or
continuing a civil action in a court other than a bankruptcy court on a claim
against the debtor, [. . .] and such period has not expired before the date of the
filing of the petition, then such period does not expire until the later of — (1)
the end of such period, including any suspension of such period occurring on
or after the commencement of the case; or (2) 30 days after notice of the
termination or expiration of the stay under section 362, 922, 1201, or 1301 of
this title, as the case may be, with respect to such claim.
11 U.S.C. § 108(c). This statute grants a plaintiff either the remainder of the statute of
limitations, or thirty days after the plaintiff received Notice of Dismissal was received.
Based on the relevant dates applicable under the facts of this case, even if the Court were to
toll the limitations period under Subsection 108(c)(1), Plaintiff still fails to demonstrate due
diligence. The car accident in question took place on August 10, 2009. Under the two-year
v. University of Cincinnati, 605 F.2d 255 (CA6 1979).” Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.
147, 151, 104 S. Ct. 1723, 1725-26, 80 L. Ed. 2d 196 (1984)
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statute of limitations applicable to this action, pursuant to ALA. CODE § 6-2-38, the statute
expired on August 10, 2011, the day Plaintiff filed her complaint. On May 23, 2012,
Defendant’s bankruptcy case was dismissed. Even if the Court were to toll the statute of
limitations, it would again begin to run on May 23, 2012. Since Plaintiff filed this action on
the very last day of the two-year statute of limitations, even if tolled, she has no time
remaining to file a new complaint. Thus, the two-year statute of limitations is exhausted and
effectively leaves this Court without the ability to fashion any sort of remedy to allow this
case to proceed under Subsection 108(c)(1).
However, under Section 108(c)(2), since the Notice of Dismissal was received May
23, 2012, Plaintiff was due thirty days from that date to restore her rights to this claim. The
proper course of action would have been to dismiss the current action due to the void
complaint, and re-file a valid complaint between May 23, 2012 and June 22, 2012. The U.S.
Supreme Court has required due diligence in preserving one’s legal rights. Irwin, 498 U.S.
at 96, 111 S. Ct. at 458 (citing Baldwin Cnty. Welcome Ctr., 466 U.S. at 151, 104 S.Ct. at
1725). The Supreme Court held that “the principles of equitable tolling [. . .] do not extend
to what is at best a garden variety claim of excusable neglect.” Id. Since Plaintiff had the
opportunity to cure the violation of the stay by dismissing this action and re-filing during the
thirty-day window after Defendant’s bankruptcy proceeding was dismissed, this Court finds
that the Plaintiff did not act with due diligence; therefore, Plaintiff is not eligible for such a
remedy based in equity.
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Plaintiff’s final argument is that a “hanging paragraph” in 11 U.S.C. § 507(a)(8)(A)(ii)
stands for the notion that when an automatic stay is in place and an attempted “compromise”
was made “with respect to that tax was pending,” an additional thirty days is to be added to
the statute of limitations. See Doc. 17 at 5-6. Plaintiff argues that she negotiated with
Defendant’s insurance company prior to initiating this action, and therefore, is due an
extension of the statute of limitations. See Doc. 17 at 5. She also cites the same subsection
for the proposition that, “any time during which a stay of proceedings against collection was
in effect in a prior case,” an additional ninety days will be added to the statute of limitations.
11 U.S.C. § 507(a)(8)(A)(ii). Plaintiff’s citation to Subsection 507(a)(8) is taken out of
context. Had Plaintiff read the entire statute prior to fashioning her argument, she would
have realized that it has absolutely no merit. Plaintiff fails to include the previous sections
and subsections that lend to the interpretation of the statute. Subsection 507(a)(8) places
“unsecured claims of governmental units” in the eighth position in the order of priority of
claims that can be brought against a debtor. 11 U.S.C. § 507(a)(8). Further, Subsection
507(a)(8)(A) provides that such claims are placed in the line of priority “only to the extent
that such claims are for [. . .] a tax on or measured by income or gross receipts for a taxable
year ending on or before the date of the filing of the petition.” 11 U.S.C. § 507(a)(8)(A).
This case involves a personal injury lawsuit between two private parties. No governmental
entity has any involvement in the proceedings or the outcome of this action. Nor does this
action involve the collection of any taxes on income or gross receipts for a taxable year.
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Thus, Plaintiff’s argument is unavailing.
DONE this 14th day of November, 2012.
/s/Terry F. Moorer
TERRY F. MOORER
UNITED STATES MAGISTRATE JUDGE
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