Kennedy v. Client Services, Inc.
- Proceeding
- district
- Area
- civil
- Panel
- Roger T. Benitez (author)
Analysis
Plaintiff Edgar Kennedy moved to stay a Debt Collection Practices Act lawsuit against Defendant Client Services, Inc., citing his Chapter 7 bankruptcy filing. The court denied the motion, ruling that the automatic stay under 11 U.S.C. § 362 does not apply because the debtor is the plaintiff in the action.
| What the court decided | The model |
|---|---|
Motion to Stay Denied“The motion to stay is DENIED.” | agree with court The court correctly applied the principle that the automatic stay under 11 U.S.C. § 362(a) protects the debtor and estate from acts by creditors, but does not stay actions initiated by the debtor against third parties. Since Kennedy is the plaintiff suing Client Services, Inc., the stay does not apply to this lawsuit. |
The order itself: sound — The order correctly identifies that the automatic stay under 11 U.S.C. § 362(a) is designed to protect the debtor from creditor actions, not to stay actions brought by the debtor. The cited authorities support the conclusion that a debtor-plaintiff's lawsuit is not stayed by the bankruptcy filing. The reasoning is concise and directly addresses the motion.
Opinion
Wee hh | 93 a | 2 ne teneed 3 a PHET 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 || EDGAR KENNEDY, Case No.: 3:19-cv-1274-BEN-AGS 10 Plaintit, ORDER DENYING PLAINTIFF'S 11 jv. MOTION TO STAY 12 || CLIENT SERVICES, INC., [Doc. 9] 13 Defendant. 14 15 Plaintiff Edgar Kennedy moves under 11 U.S.C. § 362 to stay proceedings in this 16 Debt Collection Practices Act matter because of his Chapter 7 bankruptcy filing. 17 ||Under § 362(a), subject to limited exceptions, the filing of a petition for bankruptcy 18 || automatically stays various acts and proceedings against a debtor and against the property 19 || of the estate. Here, however, the action is not against the debtor or the estate because it is 20 || Plaintiff who has filed for bankruptcy. See In re Merrick, 175 B.R. 333 (9th Cir. BAP 21 1994) (“It is clear that § 362 does not stay the hand of the trustee from continuing to 22 || prosecute a pre-bankruptcy lawsuit instituted by the debtor.”); In re Mitchell, 206 B.R. 204, 23 |}212 (Bankr. C.D. Cal. 1997) (“Section 362 stay does not apply where, as here, the debtor 24 |\is the plaintiff in a lawsuit.”). The motion to stay is DINIED. 25 ITISSO ORDERED. 26 paren fife 3/ 2019 7 HON. ER T. BENITEZ Urtited States District Judge 28