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holding that a denial of defendant's motion to dismiss was not inconsistent with the terms of the automatic stay
Summary of this case from Wiliams v. Sentry Ins. Co.Opinion
Civil Action No: SA-02-CA-0771-XR.
December 6, 2004
ORDER
On this date the Court considered the status of this case. Pending before the Court are (1) Defendant VarTec Telecom, Inc's motion to dismiss, and (2) Plaintiff's motions for discovery and for leave to amend her complaint, contained in her response to the motion to dismiss. The motion to dismiss was filed October 5, 2004, while Plaintiff's response and corresponding motions were filed November 3, 2004. Subsequently, on November 17, 2004, Defendant VarTec notified the Court that it had voluntarily petitioned for relief pursuant to the United States Bankruptcy Code. Accordingly, VarTec notified the Court that all proceedings or actions against it are stayed pursuant to 11 U.S.C. § 362(a). While technically correct, the Court notes that it maintains jurisdiction to determine the applicability of the automatic stay under to § 362(a) to proceedings before it. Arnold v. Garlock, Inc., 288 F.3d 234, 236 (5th Cir. 2002) ( Garlock II). The Court also maintains jurisdiction to enter orders not inconsistent with the terms of the stay. Picco v. Global Marine Drilling Co., 900 F.2d 846, 850 (5th Cir. 1990); Dennis v. A.H. Robins Co., 860 F.2d 871, 872 (8th Cir. 1988) (holding that a district court retains power to dismiss a case for failure to comply with court rules, despite the automatic stay, in the interest of advancing a crowded docket). In general, however, a district court should not enter an order dismissing or granting summary judgment in a case involving a party in bankruptcy where such an order would be opposed by the plaintiff. See Pope v. Manville Forest Products Corp., 778 F.2d 238, 239 (5th Cir. 1985).
"Section 362 is rarely, however, a valid basis on which to stay actions against non-debtors." Arnold v. Garlock, 278 F.3d 426 (5th Cir. 2001) ( Garlock I).
As the Court maintains jurisdiction to enter orders not inconsistent with the terms of the automatic stay, and in order to advance the Court's crowded docket, the Court finds that it has jurisdiction to rule on the pending motions. Defendant's motion to dismiss, pursuant to FED. R. CIV. P. 12(b)(1) 12(b)(6) is DENIED (docket no. 53), as Plaintiff's operative pleading, the First Amended Complaint, sufficiently states a claim against VarTec under principles of successor liability. Once the automatic stay is lifted, and after adequate time for discovery, the Court will be willing to entertain motions for summary judgment as to the issues raised by VarTec in its motion to dismiss. Plaintiff's motions for discovery and to file an amended complaint are DENIED as moot (docket nos. 57-1 57-2).
The parties are directed to ensure that all future filings with the Court are captioned correctly: "Civil Action No. SA-02-CA-0771-XR."