Dr. Rudolph Theobald v. Morris Ventures, LLC ( 2013 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-12-00481-CV
Dr. Rudolph THEOBALD,
Appellant
v.
MORRIS
MORRIS VENTURES, LLC,
Appellee
From the 352nd District Court, Tarrant County, Texas
Trial Court No. 352-253807-11
Honorable Bonnie Sudderth, Judge Presiding
Opinion by: Patricia O. Alvarez, Justice
Sitting: Karen Angelini, Justice
Patricia O. Alvarez, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: July 3, 2013
AFFIRMED
Appellant Dr. Rudolph Theobald appeals from a judgment against him in favor of Appellee
Morris Ventures, LLC. In his sole issue on appeal, Theobald argues that the trial court erred by
failing to abate the entire suit upon Stephanie Janiak’s notice of bankruptcy, and asserts that Morris
Ventures’s claims against all defendants, including himself, should have been stayed pending the
bankruptcy hearing. We affirm the trial court’s judgment.
04-12-00481-CV
BACKGROUND
Wingspan Chiropractic, Inc. occupied a commercial space in Morris Ventures’s building,
and Janiak and Theobald personally guaranteed Wingspan’s performance under the lease. Morris
Ventures sued Wingspan, Janiak, and Theobald for breach of the lease contract and breach of
guaranty. Morris Ventures filed a motion for summary judgment seeking to establish joint and
several liability as to each of the defendants under the lease and the individual guaranty
agreements. In response to Morris Ventures’s motion, Janiak filed a suggestion of bankruptcy,
Theobald filed a third party petition against Janiak for contractual indemnity and contribution, and
Wingspan did not respond. Morris Ventures withdrew its request for summary judgment as to
Janiak and filed a motion to sever all claims against Janiak.
The trial court granted Morris Ventures’s motion in an order stating that “all claims, in
their entirety, asserted against Defendant Stephanie Janiak, including [Morris Ventures]’s claims
against Defendant Janiak and Defendant Rudolph Theobald’s claims against Defendant Janiak be
severed.” The severance order also stated that “[t]hose claims are to be made the subject of a
separate suit, which is to be assigned its own docket number.” After this severance, Morris
Ventures’s claims against Wingspan and Theobald remained.
The trial court rendered judgment in favor of Morris Ventures against Wingspan and
Theobald, jointly and severally, in the amount of $89,799.19, and reasonable and necessary
attorney’s fees in the amount of $10,190.00 plus pre-judgment interest. Theobald appeals this
judgment.
BANKRUPTCY STAY
“When a defendant files a bankruptcy petition, an automatic stay goes into effect and
abates any judicial proceeding against that party.” In re Sw. Bell Tel. Co., 35 S.W.3d 602, 604
(Tex. 2000); see 11 U.S.C. § 362(a); GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711,
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04-12-00481-CV
716 (5th Cir. 1985); Beutel v. Dall. Cnty. Flood Control Dist., No. 1, 916 S.W.2d 685, 692 (Tex.
App.—Waco 1996, writ denied). The purpose of the automatic stay is “‘to protect the debtor’s
assets, provide temporary relief from creditors, and further equity of distribution among the
creditors by forestalling a race to the courthouse.’” Reliant Energy Servs., Inc. v. Enron Canada
Corp., 349 F.3d 816, 825 (5th Cir. 2003) (quoting GATX Aircraft Corp., 768 F.2d at 716); accord
Gulf States Petroleum Corp. v. Gen. Elec. Capital Auto Lease, 134 S.W.3d 504, 508 (Tex. App.—
Eastland 2004, no pet.). With limited exceptions, the stay ordinarily only applies to the debtor and
does not operate “against parties other than the debtor, such as co-debtors, guarantors, sureties, or
other non-debtor parties.” Beutel, 916 S.W.2d at 692; see Reliant Energy Servs., Inc., 349 F.3d at
825; In re Sw. Bell Tel. Co., 35 S.W.3d at 604. Furthermore, “[i]t is clearly established that the
automatic stay does not apply to non-bankrupt co-defendants of a debtor ‘even if they are in a
similar legal or factual nexus with the debtor.’” Seiko Epson Corp. v. Nu-Kote Int’l, Inc., 190 F.3d
1360, 1364 (Fed. Cir. 1999) (quoting Mar. Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1205
(3d Cir. 1991)); see In re S.I. Acquisition, Inc., 817 F.2d 1142, 1147 (5th Cir. 1987).
An exception sometimes arises “where the assets of the bankruptcy estate would be
jeopardized in allowing court proceedings to proceed against the co-defendant.” Beutel, 916
S.W.2d at 692; Paine v. Sealy, 956 S.W.2d 803, 807 (Tex. App.—Houston [14th Dist.] 1997, no
pet.).
To be entitled to this exception, however, the co-defendant must demonstrate either
that (1) there is such identity between the debtor and the co-defendant that the
debtor may be said to be the real party defendant and that a judgment against the
third-party defendant will in effect be a judgment or finding against the debtor or
that (2) extending the stay against the codefendant contributes to the debtor’s efforts
of rehabilitation.
Beutel, 916 S.W.2d at 692–93 (emphasis added); accord Paine, 956 S.W.2d at 807; see also
Reliant Energy Servs., Inc., 349 F.3d at 825. “An action taken in violation of the automatic stay
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04-12-00481-CV
is void, not merely voidable.” Cont’l Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501
(Tex. 1988); Haun v. Steigleder, 830 S.W.2d 833, 834 (Tex. App.—San Antonio 1992, no writ).
Here, in response to Morris Ventures’s motion for summary judgment, Janiak filed a
suggestion of bankruptcy. Janiak’s suggestion of bankruptcy triggered an automatic stay against
any judicial proceedings against her. See 11 U.S.C. § 362(a); GATX Aircraft Corp., 768 F.2d at
716; In re Sw. Bell Tel. Co., 35 S.W.3d at 604; Beutel, 916 S.W.2d at 692. For Theobald, a non-
debtor, non-bankrupt co-defendant, to benefit from Janiak’s stay, he had to prove he was entitled
to an exception. See Seiko Epson Corp., 190 F.3d at 1364; Reliant Energy Servs., Inc., 349 F.3d
at 825; In re Sw. Bell Tel. Co., 35 S.W.3d at 604; Beutel, 916 S.W.2d at 692. Theobald offered no
evidence and made no argument establishing that he was entitled to an exception. Therefore, the
trial court was not precluded from proceeding on Morris Ventures’s claims against Theobald and
Wingspan. We overrule this point of error.
CONCLUSION
Theobald failed to produce evidence establishing that he was entitled to the benefits of
Janiak’s automatic bankruptcy stay. Therefore, the trial court did not err in not abating Morris
Ventures’s claims against Theobald and Wingspan. We affirm the trial court’s judgment.
Patricia O. Alvarez, Justice
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