Cedar Rapids Lodge & Suites, LLC et al v. JFS Development, Inc. et al

Filing 134

ORDER re 132 Notice of Bankruptcy filed by Ted Vosburg. This action is stayed with respect to Plaintiffs' claims against Defendant Ted Vosburg. All other claims and counterclaims shall proceed. Defendant Ted Vosburg is ordered to file a Status Report about the status of the bankruptcy proceedings on or before 1/18/2012. Signed by Chief Judge Linda R Reade on 7/18/2011. (pac)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION

CEDAR RAPIDS LODGE & SUITES,
LLC, et al.,
Plaintiffs,

No. 09-CV-175-LRR

vs.

ORDER

JFS DEVELOPMENT, INC., f/k/a JCS
DEVELOPMENT, INC., et al.,
Defendants.
____________________
The matter before the court is Defendant Ted Vosburg’s “Notice of Filing of
Bankruptcy” (“Notice”) (docket no. 132). According to the Notice, Vosburg filed for
bankruptcy in the United States Bankruptcy Court for the Northern District of Iowa, Case
No. 11-01390.
When a debtor files a bankruptcy petition, an automatic stay bars the “continuation
. . . of a judicial . . . action or proceeding against the debtor that was . . . commenced
before the commencement of the [bankruptcy case.]” 11 U.S.C. § 362(a)(1). The
automatic stay remains in place until the bankruptcy case is closed or dismissed or until
the bankruptcy court grants or denies a discharge. See id. § 362(c)(2). Accordingly, the
court shall stay the instant action with respect to Plaintiffs’ claims against Vosburg.
The stay does not affect Plaintiffs’ claims against Defendants JFS Development,
Inc., John F. Seibert or Lightowler Johnson Associates, Inc.

1

See Croyden Assoc. v.

Alleco, Inc., 969 F.2d 675, 677 (8th Cir. 1992) (holding that “the stay is not available to
1

The instant action remains stayed with respect to Plaintiffs’ claims against
Defendant Marc Gabrielson, who previously filed for bankruptcy. See Order (docket no.
131).

nonbankrupt codefendants, ‘even if they are in a similar legal or factual nexus with the
debtor’” (quoting Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1205 (3d Cir.
1992))). The stay also does not extend to counterclaims against Plaintiffs. See 11 U.S.C.
§ 362(a)(1) (providing that the stay applies to judicial actions “against the debtor”); Seiko
Epson Corp. v. Nu-Kote Int’l, Inc., 190 F.3d 1360, 1364 (Fed. Cir. 1999) (“The rule also
permits claims by the debtor, and counterclaims, to proceed.”).
It is HEREBY ORDERED:
(1)

This action is STAYED with respect to Plaintiffs’ claims against Defendant
Ted Vosburg;

(2)

All other claims and counterclaims shall proceed; and

(3)

Defendant Ted Vosburg is ordered to electronically file a status report
on or before January 18, 2012. In the report, Vosburg shall inform the
court about the status of the bankruptcy proceedings.

IT IS SO ORDERED.
DATED this 18th day of July, 2011.

2