John H. Thomas, M.D. v. Graham Mortgage Corporation and Chris Norris, Substitute Trustee

• Court: Court of Appeals of Texas
• Decided: October 4, 2011
• Docket: 03-11-00335-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-11-00335-CV

John H. Thomas, M.D., Appellant

v.

Graham Mortgage Corporation and Chris Norris, Substitute Trustee, Appellees

FROM THE DISTRICT COURT OF BURNET COUNTY, 33RD JUDICIAL DISTRICT NO. 36424, HONORABLE GUILFORD L. JONES III, JUDGE PRESIDING

MEMORANDUM OPINION

PER CURIAM

John H. Thomas filed a notice of appeal from the trial court’s final judgment, arising

from competing motions for summary judgment. The final judgment provides that Thomas take

nothing from his claims against Graham Mortgage Corporation and Chris Norris, Substitute

Trustee (collectively, “Graham Mortgage and Norris”). Conversely, the final judgment grants

Graham Mortgage and Norris their requested declaratory relief and awards them damages against

Thomas in the amount of $1,434,999.28, plus pre-judgment interest, post-judgment interest and

attorneys’ fees. Graham Mortgage and Norris have filed a motion to dismiss the appeal for want of

jurisdiction. Specifically, Graham Mortgage and Norris argue that the final judgment does not

represent a final appealable order because it was entered in violation of an automatic stay, imposed

as a result of Thomas’ filing bankruptcy. See Tex. Civ. Prac. & Rem. Code Ann. §§ 51.012, .014

(West 2008). On April 25, 2011, Thomas filed for a voluntary petition for relief under Chapter 11

of the United States Bankruptcy Code. When a debtor files a bankruptcy petition, federal bankruptcy

law imposes an automatic stay on all judicial proceedings against the debtor. 11 U.S.C.A.§ 362(a)

(West 2004 and Supp. 2011); see also Tex. R. App. P. 8.2 (when a party to an appeal files a

bankruptcy petition the appeal is suspended) . Presumably unaware of Thomas’ bankruptcy filing,

on May 20, 2011, the trial court entered the final judgment against Thomas that is the subject of

this appeal. Because the final judgment was entered in violation of the Bankruptcy Code’s

automatic stay, it cannot operate as a final appealable judgment. Hood v. Amarillo Nat’l Bank,

815 S.W.2d 545, 547 (Tex. 1991).

On July 25, 2011, the bankruptcy court entered an order modifying the automatic stay

pursuant to 11 U.S.C.A. § 362(d)(1) (West 2004). The automatic stay was modified in order (1) to

permit this Court to remand or dismiss this appeal, (2) to permit the trial court to vacate its final

judgment entered on May 20th, enter a new final judgment, and consider any other timely motions

(if otherwise allowed under the Texas Rules of Civil Procedure), and, lastly, (3) to permit this Court

to consider any appeal of any resulting new final judgment.

Consistent with the automatic stay as modified, we abate this appeal and remand this

cause to the trial court to conduct proceedings consistent with the bankruptcy court’s July 25th order.

The parties are directed to either supplement the appellate record with the trial court’s final

appealable order or file a status report within 45 days of the date of this opinion. Thomas’ notice

of appeal will be deemed filed on the day of, but after, the trial court signs a final judgment. See

Tex. R. App. P. 27.1, 27.3.

2 Before Chief Justice Jones, Justices Pemberton and Henson

Abated

Filed: October 4, 2011