Rosemary Higgins Cass, J.s.c.
The below opinion elaborates the rationale of my decision of January 25, 1988, denying defendant's motion to vacate default judgment.
The novel question raised by this motion is whether the automatic stay of the United States Bankruptcy Code, 11 U.S.C. 362, operates to render void a judgment entered during the period when the stay was in effect. The further question implicated is whether, assuming the judgment to be void, the court must vacate the judgment when same was entered more than four years ago.
The case arose initially out of a landlord/tenant action brought by defendant Anderson against plaintiff Phillipe for non-payment of rent. After judgment for possession was entered in January of 1983, plaintiff obtained an Order to Show
Cause with temporary restraints to enjoin defendant from executing the Warrant of Removal until March 1, 1983. The Restraining Order was signed on February 16. Sometime after the signing of the Restraining Order and in violation thereof, defendant changed the locks on the outside door of plaintiff's apartment house without giving her a new key. As a result, plaintiff remained in her apartment or had others remain in her apartment until she vacated it on March 1, 1983. Unfortunately, plaintiff's vigilance kept her from regularly attending work, and she was fired from her job for absenteeism.
Plaintiff then filed the complaint in the present action against defendant on June 6, 1983, seeking the return of her security deposit and also damages for unlawful detainer. Defendant admits being served with the complaint on June 20, 1983 but did not file an answer. Proofs were taken on September 14, 1983, and this Court determined the defendant was liable for his failure to return plaintiff's security deposit and damages as a result of defendant's forcible entry and detainer. The Court entered judgment for plaintiff in the amount of $3,306.25, together with attorneys' fees in the sum of $656.25. The total award plus interest is now in excess of $5,000.
On May 10, 1983, prior to the filing of the complaint on which the above judgment was entered, defendant filed a petition in bankruptcy sufficient to invoke the automatic stay provisions of the Bankruptcy Act (11 U.S.C. 362 (a)). No notice of same was given to the plaintiff nor to the state court. While plaintiff does not dispute that a stay was in effect on June 6, 1983, the date upon which the suit in state court was filed, he argues that when defendant's petition in bankruptcy was subsequently dismissed on September 23, 1983, the stay was lifted and the state court proceedings and judgment, confirmed on October 4, 1983, became valid. Defendant contends that since the automatic stay was in effect at the time the complaint was filed, even though there had been no notice to the plaintiff of the bankruptcy, the proceedings and the judgment entered were void ab initio.
The automatic stay provision of the United States Bankruptcy Code provides in part that:
1.) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title. . . .
Despite its broad reach, the automatic stay is not all encompassing. Matter of M. Frenville Co. Inc., 744 F.2d 332 (C.A.3rd 1984), nor does it necessarily render void actions taken during said stay.
The cases dealing with automatic stay pursuant to § 362 of the Bankruptcy Code are divided as to its effect on actions taken in violation of the stay provision. One line of cases stands for the proposition that actions taken in violation of an automatic stay are null and void ab initio, whether or not a creditor has received actual notice of the application for bankruptcy. In re Advent Corp., 24 Bankr. 612, 614 (Bankr.App.1st Cir.1982); In re La Tempa, 58 Bankr. 538, 540 (Bkrtcy.W.D.Va.1986); In re Young, 14 Bankr. 809 (Bkrtcy.N.D.Ill.1981). A stay is triggered as soon as one petitions for bankruptcy. 11 U.S.C. 362(a). All one need do is ...