Covarrubias v. Mcghee-Pane ( 2022 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
VICTOR COVARRUBIAS, AN No. 84172
INDIVIDUAL,
Appellant,
vs. - LL ‘a F |
KELLY MCGHEE-PANE, F/K/A KELLY
F. COVARRUBIAS, AN INDIVIDUAL, APR 22 2022
Respondent.
RETA tay
a
ORDER DISMISSING APPEAL
On February 18, 2022, respondent’s counsel filed a “Suggestion
of Bankruptcy of Appellant Victor Covarrubias” informing this court that
respondent filed an Involuntary Petition under Chapter 7 of Title 11 of the
United States Code against Covarrubias in the United States Bankruptcy
Court for the District of Nevada, thereby commencing a Chapter 7
Bankruptcy, Case No. 22-10564-abl. The filing of a bankruptcy petition
operates to stay, automatically, the “continuation” of any “judicial .. . action
... against the debtor.” 11 U.S.C. § 362(a)(1). An appeal, for purposes of
the automatic stay, is considered a continuation of the action in the trial
court. See Ingersoll-Rand Fin. Corp. v. Miller Mining Co., Inc., 817 F.2d
1424 (9th Cir. 1987). Because Covarrubias was the defendant below, this
court directed Covarrubias’ counsel to inform this court whether the
automatic stay is applicable to this appeal.
On April 6, 2022, Covarrubias’ counsel filed a response.
Counsel indicates that Covarrubias is represented by different counsel in
the bankruptcy matter, however, a review of the bankruptcy docket shows
that although Covarrubias’ bankruptcy counsel has filed a motion to
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dismiss, the matter is still pending. It is counsel’s view that the automatic
stay is currently applicable to this appeal. We agree.
Given the applicability of the automatic stay, this appeal may
linger indefinitely on this court’s docket pending final resolution of the
bankruptcy proceedings. Accordingly, we conclude that judicial efficiency
will be best served if this appeal is dismissed without prejudice. Because a
dismissal without prejudice will not require this court to reach the merits of
this appeal and is not inconsistent with the primary purposes of the
bankruptcy stay—to provide protection for debtors and creditors—we
further conclude that such dismissal will not violate the bankruptcy stay.!
See Indep. Union of Flight Attendants v. Pan Am. World Airways, Inc., 966
F.2d 457, 459 (9th Cir. 1992) (holding that the automatic stay does not
preclude dismissal of an appeal so long as dismissal is “consistent with the
purpose of the statute [11 U.S.C. §362(a)”]; Dean v. Trans World Airlines,
Inc., 72 F.3d 754, 755 (9th Cir. 1995) (holding that a post-bankruptcy
petition dismissal will violate the automatic stay “where the decision to
dismiss first requires the court to consider other issues presented by or
related to the underlying case”).
Accordingly, we dismiss this appeal. This dismissal is without
prejudice to Covarrubias’ right to move for reinstatement of this appeal
within 90 days of either the lifting of the bankruptcy stay or final resolution
1The automatic stay provides a debtor “with protection against
hungry creditors” and gives the debtor a “breathing spell from its creditors”
by stopping all collection efforts. Dean v. Trans World Airlines, Inc., 72 F.3d
754, 755 (9th Cir. 1995). Further, it assures creditors “that the debtor’s
other creditors are not racing to various courthouses to pursue independent
remedies to drain the debtor’s assets.” Id. at 755-56.
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