Hancock Bank v. Miles et al

Filing 19

Order re: 18 Notice of Dismissal filed by Hancock Bank. The STAY in this case is lifted and unless defendants file an objection on or before 9/19/13, this action is dismissed without prejudice without further action by this court. ( Responses due by 9/19/2013). Signed by Judge Kristi K. DuBose on 9/13/2013. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
HANCOCK BANK,
Plaintiff,

)
)

vs.

)

RICHARD D. MILES and
VANESSA T. MILES,

)

Defendants.

CIVIL ACTION NO. 12-0642-KD-C

)
ORDER

This action is before the Court on the Plaintiff Hancock Bank’s Notice of Dismissal (doc.
18). Upon consideration and for the reasons set forth herein, the stay of this action is LIFTED
and unless the defendants Richard D. Miles and Vanessa T. Miles file an objection on or
before September 19, 2013, this action is DISMISSED without prejudice without further
action by this Court.
Plaintiff Hancock Bank has filed a notice of dismissal without prejudice pursuant to Rule
41(a)(1)(A)(i) of the Federal Rules of Civil Procedure. The Rule provides for voluntary dismissal
by the plaintiff without a court order by filing “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).
Generally, no court order is necessary to effectuate this type of voluntary dismissal. However,
this action was stayed as to defendants Richard D. Miles and Vanessa T. Miles pursuant to the
automatic stay provision of 11 U.S.C. § 362(a) (doc. 16) and the stay has not been lifted.
Even with the automatic stay, “courts 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).

Therefore, the Court will construe the notice as a motion to lift the stay and for voluntary
dismissal and determine whether the stay is applicable and whether dismissal without prejudice
is not inconsistent with the terms of the stay.
In that regard, the automatic stay operates to stay the continuation of judicial proceeding
against the debtors Richard and Vanessa Miles. 11 U.S.C. § 362(a)(1) The stay serves two
primary purposes: To relieve the debtors from the financial expense of litigation during the
bankruptcy proceedings and to protect their creditors by preserving the debtors’ estate. Carver v.
Carver, 954 F.2d 1573, 1576 (11th Cir. 1992). “[C]ourts 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 Centers East, Inc., 249 B.R. 807
(S.D.Ala. 2000)1; Chase Manhattan Bank, N.A. v. Celotex Corp., 852 F. Supp. 226 (S.D.N.Y.
1994)).2
Because dismissal of this action would relieve the defendants of the expense of this
1

In Slay, the district court decided that a voluntary dismissal pursuant to Rule 41(a)(1)(i)
would “assist rather than interfere with the goals of Chapter 11” and dismissed the action with
prejudice. Slay, at 807. The court in Slay cited the decision in Chase Manhattan Bank, N.A. v.
Celotex Corp., 852 F. Supp. 226, 228 (S.D.N.Y. 1994), finding that “a Rule 41dismissal does not
violate the automatic stay because ‘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.’” Id. (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
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) (“A 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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litigation and preserve to all creditors any assets which would be subject to a potential recovery
in this action, dismissal of this action is not inconsistent with the purposes of the automatic stay.
Additionally, dismissal on plaintiff’s voluntary notice of dismissal before defendants have filed
either an answer or a motion for summary judgment does not require consideration of any of the
issues in this action and thus “would not constitute a continuation of the judicial proceedings.”
See Settles, at *4.
DONE and ORDERED this the 13th day of September 2013.

/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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