TERRY C. CROSS, and ESSIE MAY MASON v. CITY OF ST. MATTHEWS, KENTUCKY, PETRIE STORES CORPORATION, and MALL ST. MATTHEWS LIMITED PARTNERSHIP
Annotate this Case
Download PDF
RENDERED: August 6, 1999; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1996-CA-002468-MR
TERRY C. CROSS, and
ESSIE MAY MASON
v.
APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE EDWIN A. SCHROERING, JR., JUDGE
ACTION NO. 92-CI-005833
CITY OF ST. MATTHEWS, KENTUCKY,
PETRIE STORES CORPORATION, and
MALL ST. MATTHEWS LIMITED PARTNERSHIP
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: GUDGEL, CHIEF JUDGE, COMBS, and McANULTY, JUDGES.
McANULTY, JUDGE:
This is an appeal from an order dismissing with
prejudice an action for wrongful arrest and detention.
Appellants Terry Cross (“Cross”) and Essie Mae Mason (“Mason”)
assert that the trial court’s dismissal violated the automatic
stay imposed by the bankruptcy proceeding of Appellee Petrie
Stores Corporation (“Petrie”) and, alternatively, that dismissal
as a sanction was inappropriate in this case.
Appellee Petrie,
Appellee Mall St. Matthews Limited Partnership (“Mall”), and
Appellee City of St. Matthews, Kentucky (“City”) argue that
Appellants lack standing to assert a violation of the automatic
stay and the dismissal was an appropriate sanction considering
counsel’s repeated failure to take action as directed by the
court.
We hold that Appellants lack standing to attack a
violation of the stay and the dismissal with prejudice was not an
abuse of discretion.
This action resulted from an alleged wrongful arrest
and detention by St. Matthews police after Cross and Mason were
shopping in a Jean Nicole store owned by Petrie and located in
the Mall St. Matthews.
September 15, 1991.
Appellants filed their complaint on
On May 11, 1994, the trial court ordered
Appellants to appear and explain their lack of progress.
Appellants responded by taking the deposition of the Chief of
Police in October.
In June of 1995, Appellants requested a
pretrial conference for August 29th but failed to appear.
The
conference was reassigned for September 5th and trial was set for
February 20, 1996.
On October 12, 1995, Petrie initiated a Chapter 11
bankruptcy proceeding and one month later filed a motion to hold
the action in abeyance and cancel the trial date.
On January 20,
1996, the trial court remanded the case from the trial docket
until Appellants could obtain a waiver of the automatic stay from
the bankruptcy court.
By April, counsel for Appellants had only
written a letter of inquiry to the Bankruptcy Trustee concerning
lifting the stay.
Three days before the June 13, 1996 pretrial
conference, counsel for Appellants wrote a letter of inquiry to
Petrie’s bankruptcy counsel about a voluntary lift.
-2-
At the
conference, the trial court ordered Appellants to formally file a
motion to lift the stay.
One month later, counsel still had not
filed a motion and failed to appear at the next pretrial
conference.
July 30th.
The trial court dismissed the case with prejudice on
In August, the court gave counsel one last chance to
file a motion to lift the stay but instead Appellants filed this
appeal.
The first issue before this court is whether the action
of the trial court violated the automatic stay imposed by
Petrie’s bankruptcy proceeding.
Title 11 U.S.C. § 362 states in
relevant part, as follows:
(a) Except as provided in subsection (b) of
this section, a petition filed under section
301, 302, or 303 of this title ... operates
as a stay, applicable to all entities, of —
(1) the commencement or continuation,
including the issuance or employment of
process, of a judicial, administrative, or
other action or proceeding against the debtor
that was or could have been commenced before
the commencement of the case under this
title, or to recover a claim against the
debtor that arose before the commencement of
the case under this title . . .
Once an automatic stay is imposed, court proceedings may not
continue until a motion to lift the stay is granted by the
bankruptcy court.
11 U.S.C. § 362(d).
The automatic stay
provisions of the Bankruptcy Code primarily serve as a protection
for debtors and provide a debtor with a “breathing spell from its
creditors.”
Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194,
1197 (6th Cir. 1983).
Protection to creditors is secondary but
aids the general principles of bankruptcy to treat all creditors
-3-
equally and encourage an orderly reorganization or liquidation.
Id.
Appellants claim that the trial court’s dismissal with
prejudice violates § 362(a)(1) since the action against the
debtor was commenced before the bankruptcy petition.
Appellants
rely on Easley v. Pettibone Michigan Corp., 990 F.2d 905 (6th
Cir. 1993) to demonstrate that the action by the court is a
violation of the automatic stay and thereby renders the action
invalid.
In response, Appellees assert that Appellants lack
standing to argue that the stay was violated.
We agree with
Appellees.
Current case law supports the proposition that only the
debtor or bankruptcy trustee may attack a violation of the
automatic stay.
The Ninth Circuit Bankruptcy Appeals Court
stated that:
Other parties affected by the stay are
afforded no substantive or procedural rights
under these [§ 362] provisions of the
Bankruptcy Code. In re Stivers, 31 B.R. 735
(Bankr. N.D. Cal. 1983). Consequently, if
the debtor or the trustee chooses not to
invoke the protections of § 362, no other
party may attack any acts in violation of the
automatic stay.
In re Brooks, 79 B.R. 479 (B.A.P. 9th Cir. 1987).
The U.S. Court
of Appeals agreed that “other parties cannot use such violations
to their advantage.”
In re Globe Inv. & Loan Co., 867 F.2d 556,
560 (9th Cir. 1989)(quoting In re Fuel Oil Supply and
Terminaling, Inc., 30 B.R. 360, 362 (Bankr. N.D. Tex. 1983)).
These decisions correspond with the primary concern of protecting
the debtor in bankruptcy proceedings.
-4-
Since Appellants are not the debtors in this case, they
lack the standing to attack the stay violation.
Therefore, we
decline to decide whether the trial court’s dismissal was a
violation of the § 362 automatic stay provisions.
The second issue is whether dismissal with prejudice
was an appropriate remedy for the failure to comply with the
court order to file a motion to lift the automatic stay.
Appellants assert that counsel made a good faith attempt to
obtain relief from the stay and less harsh sanctions were
available to the trial court.
Appellants cite Ward v. Houseman,
Ky. App., 809 S.W.2d 717 (1991), to demonstrate six nonexclusive
factors in determining whether involuntary dismissal is
appropriate.
These factors include the party’s personal
responsibility, history of dilatoriness, willful or bad faith
conduct by counsel, meritoriousness of claim, prejudice to the
other party, and alternative sanctions.
Id. at 717.
Appellees
counter that the factors in Ward support the trial court’s
decision to dismiss the action.
We agree with Appellees.
CR 41.02(1) states as follows:
(1) For failure of the plaintiff to prosecute
or to comply with these rules or any order of
the court, a defendant may move for dismissal
of an action or of any claim against him.
Dismissal under this rule is subject to the sound discretion of
the trial judge.
Ward, 809 S.W.2d at 720.
The aforementioned
factors in Ward may be used as guidelines.
There is no evidence that the Appellants knew that
their counsel failed to comply with specific orders of the court.
They were not personally responsible for his inaction.
-5-
However,
counsel’s continued refusal to file a formal motion to lift the
automatic stay supports the trial court’s action.
The trial
court expressly ordered counsel to file the motion and yet it was
never done.
Unlike the “one-time dilatory act” in Ward, the
failure to comply in this case was repeated.
The trial court
warned that the case would be dismissed with prejudice and even
gave counsel an additional opportunity to file after entry of the
dismissal.
His inaction has increased the costs of Appellees and
furthered the delay in this case.
Based on these facts, we
cannot say that the decision by the trial court to order an
involuntary dismissal under CR 41.02 was an abuse of discretion.
We affirm the trial court’s order dismissing with
prejudice.
-6-
ALL CONCUR.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEE CITY OF ST.
MATTHEWS:
Cletus E. Amlung
Louisville, KY
Mark A. Osbourn
Louisville, KY
BRIEF FOR APPELLEE PETRIE
STORES CORPORATION:
Arnold Taylor
Covington, KY
BRIEF FOR APPELLEE MALL ST.
MATTHEWS:
Stewart L. Prather
David J. Kellerman
Louisville, KY
-7-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
