FOR PUBLICATION
SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. CROIX
MICHAEL FELIX, Case No. SX-2008-CV-00086
PLAINTIFF, Action for Damages V.
CARIBBEAN AUTO MART OF ST. CROIX, INC. Jury Trial Demanded AND LINUS LANCANE,
DEFENDANT.
CARIBBEAN AUTO MART, Case No. SX-2008-CV-00163
PETITIONER, On Review from the Virgin Islands Department of Labor V. (re: DOL App. No. 020-02-08) GOVERNMENT OF THE VIRGIN ISLANDS, DEPARTMENT OF LABOR (EX REL. MICHAEL FELIX),
RESPONDENT.
LEE J. ROHN, ESQ. Lee J. Rohn and Associates Christiansted, VI 00820 For Michael Felix
PAMELA R. TEPPER, ESQ. Solicitor General, Virgin Islands Department of Justice St. Thomas, VI 00802 For the Government of the Virgin Islands, Department of Labor
MICOL L. MORGAN, ESQ. Ogletree, Deakins, Nash, Smoak & Stewart, PC St. Thomas, VI 00802 For Caribbean Auto Mart (Case No. SX-2008-CV-00086) Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 2 of 6
W. MARK WILCZYNSKI, ESQ. Law Office of W. Mark Wilczynski, PC St. Thomas, VI 00804 For Caribbean Auto Mart (Case No. SX-2008-CV-00163) and for Linus Lancane
MEMORANDUM OPINION AND ORDER
WILLOCKS, Presiding Judge
¶1 THESE MATTERS are before the Court following a review of the files. Both matters were stayed
due to Caribbean Auto Mart having filed a petition for bankruptcy on March 5, 2013. So far as the Court
is aware, these matters remain stayed due to the bankruptcy proceeding. The Court questions now,
however, whether either case can be revived whenever the bankruptcy proceedings conclude.
¶2 This Court recently echoed other Superior Court judges in questioning how cases and proceedings
stayed under bankruptcy laws should be managed in Virgin Islands courts. See generally Caribbean Auto
Mart of St. Croix, Inc. v. Molloy, 2020 VI Super 78. Once a bankruptcy proceeding is commenced, court
cases pending against the debtor are stayed, and remain stayed, until bankruptcy proceedings conclude,
and the debtor is discharged. As one court explained,
[once] the debtor receives a discharge, the automatic stay terminates and the discharge injunction permanently takes its place. The Bankruptcy Code provides that a discharge “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived.” The discharge injunction furthers one of the basic principles of bankruptcy—to provide the debtor with a fresh start. In re: Covelli, 550 B.R. 256, 266 (Bankr. S.D.N.Y. 2016) (citations and ellipsis omitted) (emphasis added).
There are exceptions, of course. Student loans being a well-known example of a debt that, generally, is
not dischargeable in bankruptcy. But the overarching point here is that, in the vast majority of cases, once
the automatic stay takes effect, it remains in effect until most claims against the debtor are resolved. Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 3 of 6
¶3 The consequence may be that trial courts lack authority to continue cases or proceedings stayed
by federal bankruptcy laws after bankruptcy proceedings have concluded. Courts can dismiss such cases,
however, so long as the dismissal is without prejudice. See Molloy, 2020 VI Super 78 at ¶ 5; see also In
re: Refinery Hydrocarbon Release Litig., Case No. SX-2015-CV-100, 2017 V.I. LEXIS 101 (V.I. Super.
Ct. July 10, 2017). Thus, if the plaintiff or petitioner in either matter cannot proceed, then allowing these
matters to remain stayed but open for an indefinite length of time is pointless, especially if the end result
will ultimately be dismissal. Cf. Molloy, 2020 VI Super 78 at ¶¶ 4-5 (noting that an eight-year old case
had been stayed for seven years “without an end in sight.”).
¶4 This question of how to proceed with these two matters, each having been stayed for nearly eight
years now, is made more complex because Case No. SX-2008-CV-00086 (hereinafter “the damages
action”) and Case No. SX-2008-CV-00163 (hereinafter “the review proceeding”) are different actions and
were commenced by different parties. The damages action was commenced by Michael Felix (hereinafter
“Felix”) against Caribbean Auto Mart and Linus Lancane allegedly for wrongful termination. The
damages action, clearly, is stayed against Caribbean Auto Mart,1 and will remain stayed during bankruptcy
proceedings unless Felix asks for, and the bankruptcy court grants, relief from the stay to allow the
damages action to proceed. By contrast, the review proceeding was commenced by Caribbean Auto Mart.
Actions commenced by a party who later files for bankruptcy are not necessarily stayed. See, e.g., Chaput
v. Scafidi, 66 V.I. 160, 181 (Super. Ct. App. Div. 2017) (“[F]ederal courts, relying on the plain language
of the bankruptcy code and a common sense reading of its provisions, distinguish proceedings against the
debtor from proceedings by the debtor.” (emphasis omitted) (collecting cases)). However, even though
1 Technically, Felix’s case against Linus Lancane is not stayed, unless a court concludes that it could not proceed without impacting Caribbean Auto Mart’s bankruptcy proceeding. Cf. In re: Refinery Hydrocarbon Release Litig., Case No. SX-15- CV-100, 2017 V.I. LEXIS 101, *13 (V.I. Super. Ct. July 10, 2017) (“Generally, claims against non-bankrupt co-defendants will not be stayed absent a showing that such claims are ‘related to’ the defendant in bankruptcy and the bankrupt estate.”). Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 4 of 6
Caribbean Auto Mart commenced the review proceeding, that proceeding initially involved a claim
against Caribbean Auto Mart, inasmuch as Felix sought unemployment benefits and prevailed before the
Virgin Islands Department of Labor. Presumably, it too must remain stayed. Cf. Molloy, 2020 VI Super
78 at ¶ 4 (“The goal of the automatic stay is to ‘prevent the commencement or continuation, after a
bankruptcy petition has been filed, of lawsuits and proceedings to recover a claim against the debtor that
arose before the filing of the petition.’” (first emphasis added) (brackets and citation omitted)). Yet, even
if the review proceeding can resume once bankruptcy proceedings conclude, the Court notes that a final
order was entered in this matter in February 2010, with a motion for reconsideration timely filed, but not
ruled on for nearly eleven years now, three of which proceeded Caribbean Auto Mart’s bankruptcy
petition. Whether the Court still retains jurisdiction to rule on that motion is unclear. Cf. Companion
Assurance Co. v. Smith, 66 V.I. 562 (2017).2
¶5 Nevertheless, “state and territorial courts have their own procedures for suspending proceedings
against parties subject to a bankruptcy stay.” In re: Refinery Hydrocarbon Release Litig., Case No. SX-
15-CV-100, 2017 V.I. LEXIS 101, *8 (V.I. Super. Ct. July 10, 2017). One procedure is to dismiss those
cases and proceedings that are stayed by operation of the bankruptcy laws without prejudice, subject to
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FOR PUBLICATION
SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. CROIX
MICHAEL FELIX, Case No. SX-2008-CV-00086
PLAINTIFF, Action for Damages V.
CARIBBEAN AUTO MART OF ST. CROIX, INC. Jury Trial Demanded AND LINUS LANCANE,
DEFENDANT.
CARIBBEAN AUTO MART, Case No. SX-2008-CV-00163
PETITIONER, On Review from the Virgin Islands Department of Labor V. (re: DOL App. No. 020-02-08) GOVERNMENT OF THE VIRGIN ISLANDS, DEPARTMENT OF LABOR (EX REL. MICHAEL FELIX),
RESPONDENT.
LEE J. ROHN, ESQ. Lee J. Rohn and Associates Christiansted, VI 00820 For Michael Felix
PAMELA R. TEPPER, ESQ. Solicitor General, Virgin Islands Department of Justice St. Thomas, VI 00802 For the Government of the Virgin Islands, Department of Labor
MICOL L. MORGAN, ESQ. Ogletree, Deakins, Nash, Smoak & Stewart, PC St. Thomas, VI 00802 For Caribbean Auto Mart (Case No. SX-2008-CV-00086) Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 2 of 6
W. MARK WILCZYNSKI, ESQ. Law Office of W. Mark Wilczynski, PC St. Thomas, VI 00804 For Caribbean Auto Mart (Case No. SX-2008-CV-00163) and for Linus Lancane
MEMORANDUM OPINION AND ORDER
WILLOCKS, Presiding Judge
¶1 THESE MATTERS are before the Court following a review of the files. Both matters were stayed
due to Caribbean Auto Mart having filed a petition for bankruptcy on March 5, 2013. So far as the Court
is aware, these matters remain stayed due to the bankruptcy proceeding. The Court questions now,
however, whether either case can be revived whenever the bankruptcy proceedings conclude.
¶2 This Court recently echoed other Superior Court judges in questioning how cases and proceedings
stayed under bankruptcy laws should be managed in Virgin Islands courts. See generally Caribbean Auto
Mart of St. Croix, Inc. v. Molloy, 2020 VI Super 78. Once a bankruptcy proceeding is commenced, court
cases pending against the debtor are stayed, and remain stayed, until bankruptcy proceedings conclude,
and the debtor is discharged. As one court explained,
[once] the debtor receives a discharge, the automatic stay terminates and the discharge injunction permanently takes its place. The Bankruptcy Code provides that a discharge “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived.” The discharge injunction furthers one of the basic principles of bankruptcy—to provide the debtor with a fresh start. In re: Covelli, 550 B.R. 256, 266 (Bankr. S.D.N.Y. 2016) (citations and ellipsis omitted) (emphasis added).
There are exceptions, of course. Student loans being a well-known example of a debt that, generally, is
not dischargeable in bankruptcy. But the overarching point here is that, in the vast majority of cases, once
the automatic stay takes effect, it remains in effect until most claims against the debtor are resolved. Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 3 of 6
¶3 The consequence may be that trial courts lack authority to continue cases or proceedings stayed
by federal bankruptcy laws after bankruptcy proceedings have concluded. Courts can dismiss such cases,
however, so long as the dismissal is without prejudice. See Molloy, 2020 VI Super 78 at ¶ 5; see also In
re: Refinery Hydrocarbon Release Litig., Case No. SX-2015-CV-100, 2017 V.I. LEXIS 101 (V.I. Super.
Ct. July 10, 2017). Thus, if the plaintiff or petitioner in either matter cannot proceed, then allowing these
matters to remain stayed but open for an indefinite length of time is pointless, especially if the end result
will ultimately be dismissal. Cf. Molloy, 2020 VI Super 78 at ¶¶ 4-5 (noting that an eight-year old case
had been stayed for seven years “without an end in sight.”).
¶4 This question of how to proceed with these two matters, each having been stayed for nearly eight
years now, is made more complex because Case No. SX-2008-CV-00086 (hereinafter “the damages
action”) and Case No. SX-2008-CV-00163 (hereinafter “the review proceeding”) are different actions and
were commenced by different parties. The damages action was commenced by Michael Felix (hereinafter
“Felix”) against Caribbean Auto Mart and Linus Lancane allegedly for wrongful termination. The
damages action, clearly, is stayed against Caribbean Auto Mart,1 and will remain stayed during bankruptcy
proceedings unless Felix asks for, and the bankruptcy court grants, relief from the stay to allow the
damages action to proceed. By contrast, the review proceeding was commenced by Caribbean Auto Mart.
Actions commenced by a party who later files for bankruptcy are not necessarily stayed. See, e.g., Chaput
v. Scafidi, 66 V.I. 160, 181 (Super. Ct. App. Div. 2017) (“[F]ederal courts, relying on the plain language
of the bankruptcy code and a common sense reading of its provisions, distinguish proceedings against the
debtor from proceedings by the debtor.” (emphasis omitted) (collecting cases)). However, even though
1 Technically, Felix’s case against Linus Lancane is not stayed, unless a court concludes that it could not proceed without impacting Caribbean Auto Mart’s bankruptcy proceeding. Cf. In re: Refinery Hydrocarbon Release Litig., Case No. SX-15- CV-100, 2017 V.I. LEXIS 101, *13 (V.I. Super. Ct. July 10, 2017) (“Generally, claims against non-bankrupt co-defendants will not be stayed absent a showing that such claims are ‘related to’ the defendant in bankruptcy and the bankrupt estate.”). Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 4 of 6
Caribbean Auto Mart commenced the review proceeding, that proceeding initially involved a claim
against Caribbean Auto Mart, inasmuch as Felix sought unemployment benefits and prevailed before the
Virgin Islands Department of Labor. Presumably, it too must remain stayed. Cf. Molloy, 2020 VI Super
78 at ¶ 4 (“The goal of the automatic stay is to ‘prevent the commencement or continuation, after a
bankruptcy petition has been filed, of lawsuits and proceedings to recover a claim against the debtor that
arose before the filing of the petition.’” (first emphasis added) (brackets and citation omitted)). Yet, even
if the review proceeding can resume once bankruptcy proceedings conclude, the Court notes that a final
order was entered in this matter in February 2010, with a motion for reconsideration timely filed, but not
ruled on for nearly eleven years now, three of which proceeded Caribbean Auto Mart’s bankruptcy
petition. Whether the Court still retains jurisdiction to rule on that motion is unclear. Cf. Companion
Assurance Co. v. Smith, 66 V.I. 562 (2017).2
¶5 Nevertheless, “state and territorial courts have their own procedures for suspending proceedings
against parties subject to a bankruptcy stay.” In re: Refinery Hydrocarbon Release Litig., Case No. SX-
15-CV-100, 2017 V.I. LEXIS 101, *8 (V.I. Super. Ct. July 10, 2017). One procedure is to dismiss those
cases and proceedings that are stayed by operation of the bankruptcy laws without prejudice, subject to
2 The Court also questions whether staying the review proceeding is appropriate, given that unemployment benefits are “paid solely through public employment offices, or such other agencies as the U.S. Secretary of Labor shall approve, in accordance with regulations prescribed by the Commissioner of Labor.” 24 V.I.C. § 305(a). In addition, “benefits shall be paid promptly in accordance with . . . the decision of a hearing examiner . . . under section 306,” and “upon the issuance of such . . . decision . . . unless and until such . . . decision has been modified or reversed . . . in which event benefits shall be paid or denied for weeks of unemployment thereafter in accordance with such modifying or reversing . . . decision.” Id. § 305(h)(1). In other words, Felix should have received his unemployment benefits, which Caribbean Auto Mart would not have paid directly to him. Accord Haugen v. Superior Dev., Inc., 819 N.W.2d 715, 722 (Minn. Ct. App. 2012) (“Although employers fund the unemployment insurance program and an employer's tax rate may increase based on benefits paid to applicants, an employer does not pay unemployment benefits directly and a former employee's application for benefits is not a claim against an employer.” (citations omitted)). Thus, even if Caribbean Auto Mart were to prevail in the review proceeding, reversing the administrative law judge’s decision now—twelve years later—might not have a financial impact on the bankruptcy estate, particularly if the end result would mean that Felix is only denied future unemployment. See 24 V.I.C. § 305(h)(1); see also id. § 305(h)(2); id. § 305(j)(3); Serrant v. V.I. Emp’t Sec. Agency, 32 V.I. 454, 459 (3d Cir. 1995) (reversing reviewing court’s decision to affirm recoupment decision). Felix v. Caribbean Auto Mart of St. Croix, Inc., et al. / Caribbean Auto Mart v. Gov’t of the V.I., et al. 2021 VI Super 9 Case Nos. SX-2008-CV-00086 / SX-2008-CV-00163 MEMORANDUM OPINION AND ORDER Page 5 of 6
their refiling, if appropriate, once bankruptcy proceedings have concluded. See id. at *10 (“‘The
bankruptcy court does not have the power to preclude another court from dismissing a case on its docket
or to affect the handling of a case in a manner not inconsistent with the purpose of the automatic stay.’”
(quoting Dennis v. A.H. Robins Co., 860 F.2d 871, 872 (8th Cir. 1998) (per curiam)); see also Molloy,
2020 VI Super 78 at ¶ 7 (“State and territorial courts have found that ‘the need of a court to advance a
crowded docket is certainly sufficient to justify the dismissal of a case.’” (quoting In re: Refinery
Hydrocarbon Release Litig., 2015 V.I. LEXIS 101 at *11)); Brouillard v. DLJ Mortg. Capital, Inc., 60
V.I. 763, 767 (2014) (per curiam) (“We agree with these courts that dismissal without prejudice represents
the sounder method for achieving compliance with the federal mandate, and therefore we dismiss this
appeal without considering the merits of the underlying case. Within 60 days of the conclusion of the
bankruptcy proceedings or the date the bankruptcy court enters an order terminating the automatic stay,
the Brouillards may file a new notice of appeal with this Court, which shall be effective to appeal the . . .
Judgment notwithstanding any contrary provision in this Court’s rules of appellate procedure.”).
“However, before taking any significant action sua sponte, the Court must first give the parties a chance
to respond.” Molloy, 2020 VI Super 78 at ¶ 7 (citing Hughley v. Gov’t of the V.I., 61 V.I. 323 (2014)).
Accordingly, for the reasons given above, it is hereby
ORDERED that Michael Felix, as plaintiff in Case No. SX-2008-CV-00086, and respondent in
Case No. SX-2008-CV-00163, shall SERVE and FILE a notice in writing, within fourteen (14) days
from the date of entry of this Order, informing the Court: (1) whether Felix filed a proof of claim with the
bankruptcy court; (2) whether Caribbean Auto Mart, defendant in Case No. SX-2008-CV-00086, and
petitioner in Case No. SX-2008-CV-00163, listed these actions on its bankruptcy schedule; and (3)
assuming that Felix did not miss the deadline to file a proof of claim, whether Felix intends to file a motion
with the bankruptcy court to lift the automatic stay to allow either case to proceed. Feltx v Cartbbean Auto Mart of Sr Crow: Inc et a1 / Caribbean Auto Marl v Gov tofthe V! et a! 2021 VI Super 9 Case Nos SK 2008 CV 00086 / 8X 2008 CV 0016? MEMORANDUM OPINION AND ORDER Page 6 of 6
If Felix will not move the bankruptcy court for relief from the automatic stay then Felix shall file
a response within the same time given above to SHOW CAUSE why Case No SX 2008 CV 00086
should not be dismissed without prejudice for the reasons stated above as to Caribbean Auto Mart, and
further SHOW CAUSE why his case against Linus Lancane should remain stayed It is further
ORDERED that Linus Lancane SHALL—and Caribbean Auto Mart MAY but is not required
to—SERVE and FILE a reply to any response that Felix files within fourteen (14) days thereafter
DONE and so ORDERED this é may of January, 2021
; HAROLD W L WILLOCKS Presiding Judge of the Superior Court