Branch Banking and Trust Company v. R&T Rentals, L.L.C. et al

Filing 72

ORDER DISMISSING CASE. The stay is lifted and this action is dismissed without prejudice as to defendant C. Thurmon Bell. The Clerk of the Court is directed to close this action. Signed by Judge Kristi K. DuBose on 7/30/2012. (sdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
BRANCH BANKING AND TRUST
COMPANY,
Plaintiff,
vs.
R & T RENTALS, LLC, et al.,
Defendants.

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) CIVIL ACTION NO. 10-0518-KD-N
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ORDER

This action is before the Court on the order to show cause why this action against
defendant C. Thurmon Bell should not be dismissed without prejudice (doc. 70) and the response
filed by plaintiff Branch Banking and Trust Company (doc. 71). In the response, BBT states that
it has no objection to dismissal of Bell without prejudice and consents to an order of dismissal.
Upon consideration, and for the reasons set forth herein, the stay of this action is lifted and this
action is dismissed without prejudice as to Bell. The Clerk of the Court is directed to close
this action.
Previously, this action was stayed as to Bell upon notice of his Chapter 11 bankruptcy
action (doc. 53). BBT has not moved to lift the automatic stay in order to pursue this action
against Bell. According to Bell’s most recent status report, his bankruptcy action is still pending
(doc. 65). In response to this Court’s order to show cause, BBT states that it has no objection to
dismissal without prejudice of this action against Bell. Therefore, the Court will construe the
response as a notice of voluntary dismissal pursuant to Rule 41(a)(2) of the Federal Rules of
Civil Procedure.1

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“ (2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be
dismissed at the plaintiff's request only by court order, on terms that the court considers proper.”
(Continued)

Although the automatic stay has issued, Acourts retain jurisdiction >to determine the
applicability of the stay to litigation pending before them, and to enter orders not inconsistent
with the terms of the stay.=@ Robert v. Bell Helicopter Textron, Inc., 2002 WL 1268030, 2 (N.D.
Tex. May 31, 2002) (quoting Picco v. Global Marine Drilling Co., 900 F.2d 846, 850 (5th Cir.
1990)). The automatic stay, in relevant part, operates to stay the continuation of judicial
proceeding against the debtor. 11 U.S.C. ' 362(a)(1). Also, the automatic stay serves two
primary purposes: To relieve the debtor from the financial expense of litigation during the
bankruptcy proceedings and to protect creditors by preserving the debtor=s estate. Carver v.
Carver, 954 F.2d 1573, 1576 (11th Cir.1992).
However, “courts have held that the automatic stay does not prevent a court from
dismissing a case against the debtor on the motion of the plaintiff pursuant to rule 41(a) of the
Federal Rules of Civil Procedure”, so long as the dismissal is not inconsistent with the purpose
of the automatic stay. Settles v. Commissioner of Internal Revenue, 138 T.C., No. 19, 2012 WL
1605350, *3 (U.S. Tax Ct. May 8, 2012) (citing Arnold v. Garlock Inc., 288 F.3d 234 (5th
Cir.2002); Slay v. Living Ctrs. E., Inc., 249 B.R. 807 ( S.D.Ala. 2000)2; Chase Manhattan Bank,
N.A. v. Celotex Corp., 852 F.Supp. 226 (S.D.N.Y. 1994)).3

Fed. R. Civ. P. 41(a)(2).
2

In Slay, the district court found that a voluntary dismissal under Rule 41(a)(1)(i) does
not violate the automatic stay and that Athe purposes of the Bankruptcy Code [a]re in no way
infringed by the dismissal by a plaintiff of a case against the bankrupt without any additional cost
or risk to the bankrupt or its creditors.@) (quoting Chase Manhattan Bank, N.A. v. Celotex Corp.,
852 F. Supp. 226, 228 (S.D.N.Y. 1994)) (brackets in original).
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See also Independent Union of Flight Attendants v. Pan American World Airways, Inc.,
966 F.2d 457, 459 (9th Cir. 1992) (finding automatic stay did not preclude disposing of a motion
to dismiss a bankruptcy appeal); Dennis v. A.H. Robins Co., Inc., 860 F.2d 871, 872 (8th Cir.
1988) (holding that the § 362(a) stay does not “preclude another court from dismissing a case on
(Continued)
2

Because dismissal of this action would relieve Bell from the expense of litigation and
preserve to all creditors any assets which would be subject to a potential recovery in this action,
dismissal of this litigation against Bell is not inconsistent with the purposes of the automatic stay.
Accordingly, this action is DISMISSED without prejudice as to Bell.
DONE and ORDERED this 30th day of July, 2012.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

its docket or ... affect the handling of a case in a manner not inconsistent with the purpose of the
automatic stay.”); Gallagher v. Sports Publishing, LLC, 2009 WL 294400 (C.D. Ill. February 4,
2009) (AA Rule 41 dismissal does not violate the automatic stay because the purposes of the
Bankruptcy Code are in no way infringed by dismissal of the action against the bankrupt party
without any additional cost or risk to the bankruptcy party or its creditors@) (citations omitted).

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