SINDLER v. Brennan

California Court of Appeal Jan 31, 2003 No. G028817Published

Before: Sills

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Holding. The court held that a superior court order dismissing a case while an automatic bankruptcy stay was in effect is void for lack of jurisdiction and must be set aside under Code of Civil Procedure section 473, subdivision (d).

Issues

Whether a superior court dismissal of a case subject to an automatic bankruptcy stay is void.
Whether a void dismissal order can be set aside regardless of prejudice or the passage of time.

Disposition. reversed

Quotations verified verbatim against the opinion

“A petition in bankruptcy creates an automatic stay of all judicial proceedings against the debtor. (11 U.S.C. § 362(a).) Judicial proceedings in violation of the automatic stay are void.”

“Accordingly, the trial court had no power to dismiss the case, and the dismissal was void.”

“Prejudice is not a factor, however, when a dismissal order is void.”

Opinion

SILLS, P. J.

Patricia Sindler (Sindler) appeals from an order of the Orange County Superior Court denying her motion under Code of Civil Procedure section 473 to set aside the dismissal of her case. We reverse.

Facts

Following an allegedly unsatisfactory plastic surgery performed by H. George Brennan, Sindler filed a medical malpractice action in June 1996 in the Orange County Superior Court. Brennan filed bankruptcy proceedings and a notice of automatic stay on March 20, 1997.

The superior court required Sindler to report on the status of the bankruptcy action. In May 1997, Sindler applied for an order to suspend monitoring under Orange County Superior Court Local Rules, rule 457. At the

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same time, she submitted a preprinted Grange County Superior Court form entitled “Application and Order To Suspend Monitoring Re Bankruptcy,” giving the court notice that the case was subject to a bankruptcy court stay and requesting a suspension under California Rules of Court, rule 225(d). By checking a preprinted order on the form, the court granted the suspension and set a “Bankruptcy Review Hearing/Order to Show Cause re dismissal” for October 1997. The preprinted order further stated, “Unless plaintiff/ cross-complainant files a declaration before the above hearing date indicating why the case should not be dismissed at that time, the stayed actions will be dismissed on the Court’s own motion.” Sindler was given notice of the order.

Apparently, Sindler did not file a declaration before the hearing date, but in November 1997 she moved for relief from the stay in bankruptcy court. The bankruptcy court denied relief from the stay and ordered that her claim be removed to the federal district court under 28 United States Code section 157(b)(5). In January 1998, Sindler reported the status of the case to the superior court, declaring that the bankruptcy court “ordered that the matter remain with the federal court for purposes of trial, removing the matter from state court jurisdiction.”

The superior court dismissed the case the next day.

SINDLER v. Brennan

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SILLS, P. J.

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