W.D. Curran & Associates, Inc. v. Cheng-Shum Enterprises, Inc.

667 A.2d 1013, 107 Md. App. 373, 1995 Md. App. LEXIS 197
CourtCourt of Special Appeals of Maryland
DecidedDecember 5, 1995
DocketNo. 415
StatusPublished
Cited by6 cases

This text of 667 A.2d 1013 (W.D. Curran & Associates, Inc. v. Cheng-Shum Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W.D. Curran & Associates, Inc. v. Cheng-Shum Enterprises, Inc., 667 A.2d 1013, 107 Md. App. 373, 1995 Md. App. LEXIS 197 (Md. Ct. App. 1995).

Opinion

DAVIS, Judge.

W.D. Curran & Associates, Inc. appeals from an order of the Circuit Court for Baltimore County that denied appellant’s [378]*378Motion to Extend Writ of Execution and granted appellee’s, Cheng-Shum Enterprises, Inc.’s, Motion to Release Levy. Three questions are presented on this appeal, the first of which is a threshold matter. We restate the issues as follows:

I. Did the automatic bankruptcy stay, which arose as a result of appellee filing a petition for bankruptcy relief, preclude appellant from filing its second Motion to Extend Writ of Execution in the circuit court?
II. Did the levy automatically terminate upon the expiration of the 120-day extension period contained in the circuit court’s August 10, 1994 order extending the writ of execution?
III. If the levy did not automatically expire, did the circuit court abuse its discretion in determining that appellant failed to show good cause for extending the levy further?

As we shall explain more fully below, we are compelled to reverse the judgment of the circuit court.

FACTS

Following a bench trial on October 19, 1993, in a breach of contract claim in the Circuit Court for Baltimore County (Kahl, J.), appellant obtained a judgment and a mechanic’s lien against appellee for $46,021.88. This Court affirmed the circuit court’s judgment in an unreported opinion filed March 16, 1995. Cheng-Shum Enter, v. W.D. Curran & Assocs., 104 Md.App. 759 and 770 (Md.Ct.Spec.App.1995).

During the pendency of that appeal, appellant began procedures to collect its judgment. Pursuant to appellant’s Request for Writ of Execution, the Sheriff of Baltimore County levied upon appellee’s personal property on December 9, 1993. The parties state that the sheriffs schedule appraised the value of this personal property at approximately $15,000. The sale of the property was postponed pursuant to an agreement between the parties reached in late January, 1994. Under this agreement, appellee promised to pay appellant an initial sum of $10,000, followed by subsequent monthly payments of [379]*379$2,500 until the judgment was satisfied. Appellee paid the initial $10,000, but apparently failed to make any monthly payments.

Much of what transpired next revolves around Maryland Rule 2—643(c)(6), which allows a judgment debtor to request the circuit court to release property from a levy where the levy has existed for 120 days without sale of the property, unless the circuit court for good cause extends the time. On March 8, 1994, approximately ninety days after the sheriff levied on the property, in an effort to preserve the levy, appellant filed a Motion to Extend Writ of Execution (hereinafter, “first Motion to Extend”) beyond the 120-day period contained in Maryland Rule 2-643(c)(6). On March 11, 1994, however, appellee filed a bankruptcy petition for Chapter 11 relief in the United States Bankruptcy Court for the District of Maryland.

Appellant then turned to the bankruptcy court for relief, filing a motion requesting relief from the automatic stay so that appellant could proceed on the Writ of Execution. The record is unclear regarding when this motion was filed. In any event, after a hearing on July 8, 1994, the bankruptcy court (Derby, J.) ultimately issued an order on July 19, 1994, modifying the automatic stay so that appellant “may present to the Circuit Court of Maryland for Baltimore County its Motion to Extend Writ Of Execution and request the relief granted therein[.]” (hereinafter, “order modifying stay”). The bankruptcy court, however, denied appellant’s request for permission to sell the property under the Writ of Execution.

Accordingly, appellant obtained an order from the circuit court (Kahl, J.) dated August 10,1994, ordering “that the Writ of Execution levied in the above captioned matter shall be extended beyond the 120 day period contained in Rule 2-643(c)., for an additional 120 days from the [ejxpiration thereof ” (Emphasis added)1 (hereinafter, “order extending [380]*380writ of execution”). Because the date of the levy was December 9, 1993, by our calculations the 120-day period contained in Rule 2-643(c)(6) ended on April 8, 1994, and the “additional 120 days from the [e]xpiration thereof’ ended on August 6, 1994. Thus, whether Judge Kahl realized or intended it, by the time he signed the order extending writ of execution, the additional 120~day period had already expired.2

On November 7, 1994, in another attempt to preserve the levy, appellant filed a second Motion to Extend Writ of Execution (hereinafter, “second Motion to Extend”). The record reveals that appellant did not obtain further authorization from the bankruptcy court allowing appellant to file this motion. In response, appellee filed a motion to release the property from the levy on the ground that “[t]he original writ issued by [the circuit court] has expired by operation of law and by specific order of [the circuit court]” and that appellant “failed to have the levied property sold within 120 days and has failed to demonstrate good cause.” On February 2, 1995, another judge of the circuit court held a hearing on these motions. At the conclusion of argument from counsel, the circuit court stated the following:

The Court is not satisfied that there is good cause shown or that the Rule [2-643] is that clear or for that matter Judge Kahl’s order [extending writ of execution] is specific on that issue. But having read [Joshi v. Kaplan, Freeland, Schwartz & Bloomberg, P.C., 72 Md.App. 694, 532 A.2d 712 (1987) ], and heard argument of Counsel on this issue, the Court will deny [appellant’s] Motion to Extend the Writ of Execution, ... and will grant [appellee’s] Motion to Release the Levy ...

[381]*381On the following day, the circuit court issued a written order to the same effect. From this order, appellant appeals to this Court.

LEGAL ANALYSIS

I

As a threshold matter, appellee argues that appellant was not authorized to file a second Motion to Extend.3 The thrust of appellee’s argument seems to be that while appellant was authorized to file the first Motion to Extend by virtue of the bankruptcy court’s order modifying stay, appellant was not authorized to file the second Motion to Extend because appellant failed to obtain further authorization from the bankruptcy court. In other words, the order modifying the automatic stay was not continuing in nature such that appellant could repeatedly file motions to extend the writ of execution, but rather allowed appellant to file one motion one time.

To determine whether appellant was authorized to file the second Motion to Extend, it is first necessary to understand the nature of an “automatic stay.” An automatic stay arises upon the filing of a bankruptcy petition under the U.S. Bankruptcy Code. 11 U.S.C. § 362 (1995). “The effect of the automatic stay on a pending suit in another court is to suspend that suit; it does not cause that suit to be dismissed.” Nnoli v. Nnoli, 101 Md.App. 243, 250, 646 A.2d 1021

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Bluebook (online)
667 A.2d 1013, 107 Md. App. 373, 1995 Md. App. LEXIS 197, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wd-curran-associates-inc-v-cheng-shum-enterprises-inc-mdctspecapp-1995.