City Bank v. Industrial Bank NA

Fifth Circuit

City Bank v. Industrial Bank NA

178 F. App'x 409

CourtCourt of Appeals for the Fifth Circuit

DecidedMay 4, 2006

Docket05-10872

StatusUnpublished

Cited by1 cases

This text of 178 F. App'x 409 (City Bank v. Industrial Bank NA) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

City Bank v. Industrial Bank NA, 178 F. App'x 409 (5th Cir. 2006).

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Opinion

PER CURIAM: *

The order of the bankruptcy court was correct for the reasons well set out in its Memorandum Opinion and Order; therefore, we REVERSE the judgment of the district court. The district court erred as a matter of law in concluding that the dismissal of the two previous bankruptcy proceedings necessarily served both to lift the automatic stay and to cleanse the appellee’s violations of the stay. In re Brown, 330 B.R. 548, 553 (N.D.Tex.2005) (stating that “11 U.S.C. § 349(b) caused the dismissals of Cases 1 and 2 to have the effect of validating actions taken ... during the pendency of those cases”). The bankruptcy court correctly recognized that the dismissal of a bankruptcy proceeding does not necessarily retroactively validate actions taken in violation of an automatic stay. Rather, the retroactive validation of actions taken in violation of an automatic stay is reserved to the discretion of bankruptcy courts, and they are cautioned to use this discretion sparingly because of the adverse impact that validation could have on other creditors who honored the stay. See, e.g., In re Cueva, 371 F.3d 232, 236 (5th Cir.2004) (stating that bankruptcy courts have “broad discretion” to grant or to deny retroactive annulment or modification of an automatic stay); In re Thornburg, 277 B.R. 719, 731 (Bankr.E.D.Tex. 2002) (stating that bankruptcy courts should grant retroactive relief for actions that violated an automatic stay only in exceptional circumstances). The bankruptcy court correctly exercised that discretion here.

The final judgment of the district court is REVERSED, and the Memorandum Opinion and Order of the bankruptcy court is AFFIRMED. Costs shall be borne by appellee.

*

Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.

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PER CURIAM: *

The order of the bankruptcy court was correct for the reasons well set out in its Memorandum Opinion and Order; therefore, we REVERSE the judgment of the district court. The district court erred as a matter of law in concluding that the dismissal of the two previous bankruptcy proceedings necessarily served both to lift the automatic stay and to cleanse the appellee’s violations of the stay. In re Brown, 330 B.R. 548, 553 (N.D.Tex.2005) (stating that “11 U.S.C. § 349(b) caused the dismissals of Cases 1 and 2 to have the effect of validating actions taken ... during the pendency of those cases”). The bankruptcy court correctly recognized that the dismissal of a bankruptcy proceeding does not necessarily retroactively validate actions taken in violation of an automatic stay. Rather, the retroactive validation of actions taken in violation of an automatic stay is reserved to the discretion of bankruptcy courts, and they are cautioned to use this discretion sparingly because of the adverse impact that validation could have on other creditors who honored the stay. See, e.g., In re Cueva, 371 F.3d 232, 236 (5th Cir.2004) (stating that bankruptcy courts have “broad discretion” to grant or to deny retroactive annulment or modification of an automatic stay); In re Thornburg, 277 B.R. 719, 731 (Bankr.E.D.Tex. 2002) (stating that bankruptcy courts should grant retroactive relief for actions that violated an automatic stay only in exceptional circumstances). The bankruptcy court correctly exercised that discretion here.

The final judgment of the district court is REVERSED, and the Memorandum Opinion and Order of the bankruptcy court is AFFIRMED. Costs shall be borne by appellee.

*

Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.

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178 F. App'x 409, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-bank-v-industrial-bank-na-ca5-2006.

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