Branch Banking and Trust Company v. Imagine CBQ, LLC et al

Filing 63

ORDER DISMISSING PARTY re: re: Notice of Dismissal as to Joseph H. Laney ) 62 filed by Branch Banking and Trust Company. Defendant Laney is dismissed without prejudice.. Signed by Judge Kristi K. DuBose on 2/28/2012. (cmj)

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

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CIVIL ACTION NO. 11-0168-KD-C

ORDER
This action is before the Court on Plaintiff Branch Banking and Trust Company’s (BBT)
Notice of Dismissal without prejudice of Defendant Joseph H. Laney (doc. 62). Defendant
Laney was served but did not file an answer or otherwise respond to the complaint and did not
respond to BBT’s motion for summary judgment. BBT also notifies the Court that Laney has
filed a Chapter 7 Bankruptcy Petition in the Bankruptcy Court for the Northern District of
Alabama.
BBT moves to dismiss pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i) which provides for
voluntary dismissal by the plaintiff without a court order if the plaintiff files “a notice of
dismissal before the opposing party serves either an answer or a motion for summary judgment”.
Fed R. Civ. P. 41(a)(1)(A)(i). However, since Laney has filed for bankruptcy protection, an
automatic stay pursuant to 11 U.S.C. § 362(a) stays any action against him but the “courts retain
jurisdiction ‘to determine the applicability of the stay to litigation 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). In relevant part, the automatic stay operates to stay the

continuation of judicial proceeding against the debtor. 11 U.S.C. § 362(a)(1). The automatic stay
also 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).
Because dismissal of this action would relieve defendant Laney of 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 Defendant Laney would not defeat the purposes
of the automatic stay. See Independent Union of Flight Attendants v. Pan American World
Airways, Inc., 966 F.2d 457, 459 (9th Cir. 1992); Dennis v. A.H. Robins Co., Inc., 860 F.2d 871,
872 (8th Cir. 1988); Gallagher v.Sports Publishing, LLC, 2009 WL 294400 (C.D. Ill. February 4,
2009); Slay v. Living Centers East, Inc., 249 B.R. 807 (S.D. Ala. 2000) (finding that voluntary
dismissal under Rule 41(a)(1)(i) does not violate the automatic stay and that “the 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)); Darr v.
Altman, 20 S.W. 3d 802, 807 (Tex App. 2000). Accordingly, this action is DISMISSED without
prejudice as to defendant Laney.
DONE this the 28th day of February, 2012.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE