Bartlette v. Kmart Corp , 312 F. App'x 441 ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
6-5-2008
Bartlette v. Kmart Corp
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-3716
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Recommended Citation
"Bartlette v. Kmart Corp" (2008). 2008 Decisions. Paper 1053.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 07-3716
_____________
ILEASE BARTLETTE,
Appellant,
v.
KMART CORPORATION, ET AL.,
Appellee.
_____________
Appeal from the Order of the District Court
of the Virgin Islands
(02-cv-00100)
District Judge: Honorable Curtis V. Gomez
____________
Submitted Under Third Circuit L.A.R. 34.1(a)
on May 6, 2008
____________
Before: RENDELL, FUENTES, and CHAGARES, Circuit Judges.
(Filed: June 5, 2008 )
OPINION
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FUENTES, Circuit Judge.
The District Court granted Kmart’s motion to dismiss Ilease Bartlette’s action
upon determining that its commencement violated the automatic stay provision in the
Bankruptcy Code. See 11 U.S.C. § 362(a)(1). We will affirm.
Bartlette filed a complaint on May 28, 2002, alleging that Kmart improperly
terminated her employment. She sought monetary damages for violation of the
Americans with Disabilities Act, the Civil Rights Act, the Age Discrimination in
Employment Act, breach of contract, wrongful discharge, and intentional infliction of
emotional distress. However, on January 22, 2002, following Bartlette’s termination, but
before she filed her complaint, Kmart petitioned for relief under Title 11 of the United
States Bankruptcy Code with the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division.
Kmart moved to dismiss Bartlette’s complaint arguing that, among other things, it
was void under 11 U.S.C. § 362(a)(1). Under § 362(a)(1), Kmart’s bankruptcy petition
“operate[d] as a stay, applicable to all entities, of — (1) the commencement or
continuation, including the issuance or employment of process, of a judicial,
administrative, or other action or proceeding against the debtor that was or could have
been commenced before the commencement of the case under this title.”
The District Court granted Kmart’s motion, noting that Bartlette’s claims arose
before Kmart’s petition, Bartlette did not receive relief from the automatic stay under §
-2-
362(a)(1), and “any action from [the District Court] against the debtor would be void ab
initio.” Supp. Jt. App. 4 & n.2.1 Bartlette, proceeding pro se, appealed to this Court. We
have jurisdiction pursuant to 28 U.S.C. § 1291.
“Consolidating all pre-petition claims against the debtor in one collective
proceeding before a bankruptcy court is the essence of bankruptcy.” Maritime Elec. Co.
v. United Jersey Bank, 959 F.2d 1194, 1207 (3d Cir. 1991). Permitting creditors to
continue filing claims against the debtor outside of the bankruptcy proceedings would
defeat this purpose. As such, actions taken in violation of the automatic stay provision
are voidable. See In re Siciliano, 13 F.3d 748, 750 (3d Cir. 1994); Lampe v. Xouth, Inc.,
952 F.2d 697, 700 (3d Cir. 1992). Moreover, “[o]nly the bankruptcy court with
jurisdiction over a debtor’s case has the authority to grant relief from the stay of judicial
proceedings against the debtor.” Maritime Elec. Co., 959 F.2d at 1204. In this case, as
the District Court noted, there is no indication that Bartlette ever received relief from the
automatic stay, which would have permitted her to initiate this action.2 The District
Court did not err in dismissing the complaint.
1
The District Court also found that the Bankruptcy Court’s confirmation of
Kmart’s reorganization plan bars the continuation of this case. For the reasons stated in
our opinion, we find it unnecessary to reach this issue.
2
In fact, the record shows that in July 2002 Bartlette, with the assistance of
counsel, filed a proof of claim with the Bankruptcy Court. See Supp. Jt. App. 18. We
note that the District Court erred in finding that no such claim was filed, although this
mistake was harmless. While it appears that her claim was ultimately denied, the
Bankruptcy Court, not the District Court of the Virgin Islands, was the correct forum in
which to pursue her claim.
-3-
For the foregoing reasons, we will affirm.
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