United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
C. BRACK SENIOR U.S. DISTRICT JUDGE.
MATTER is before the Court on Plaintiff Jeani Anderson's
Motion and Application for Prejudgment Writ of Attachment,
filed April 11, 2019. (Doc. 30.) On May 20, 2019, Defendants
Dean Horton and Frances Horton filed a Notice of Petition of
Bankruptcy indicating that they filed a Chapter 7 bankruptcy
petition. (Doc. 41.) They assert that the petition operates
as an automatic stay of this matter pursuant to 11 U.S.C.
§ 362(a). (Id.) Plaintiff has not filed a
response or objection to the Notice of Petition of
Bankruptcy. A bankruptcy petition operates as a stay as to
attaching property of the bankruptcy estate or property of
the debtors. § 362(a). Therefore, the Court concludes
that the Motion and Application for Writ of Prejudgment
Attachment is not well-taken at this time and is
DENIED WITHOUT PREJUDICE. Plaintiff may file
a new motion for prejudgment attachment if she is granted
relief from the automatic stay by the bankruptcy court.
provided services to Defendants in the construction and
decoration of their 88-room home. (Doc. 30 at 5.) Defendants
allegedly failed to pay Plaintiff the full amount owed, and
Plaintiff sued Defendants in a prior action in this Court.
(See Doc. 1 ¶ 8.) The parties settled. See
Anderson v. Horton, 2:16-cv-1317 GJF/LAM, Notice of
Voluntary Dismissal (D.N.M. Feb. 15, 2017). As part of the
settlement agreement, Defendants made a lump sum payment of
$200, 000. (Doc. 1-A at 3.) The settlement agreement also
provided that Defendants would make 48 monthly installment
payments of $16, 000. (Id.) Finally, the settlement
provided that Defendants would grant Plaintiff a security
interest in an Edward Jones brokerage account. (Id.
at 4-5.) The settlement allowed Defendants to manage the
account but prohibited them from withdrawing principal or
income. (Id. at 5.)
now alleges that Defendants breached the terms of the
settlement agreement by failing to make the required monthly
installment payments and failing to grant her a security
interest in the Edward Jones brokerage account. (Doc. 1
¶¶ 12, 15.) Plaintiff also alleges that Defendants
fraudulently transferred or concealed assets. (Id.
¶ 30.) She asserts that Defendants currently owe her
$520, 000, and the value of the brokerage account is $191,
284.53 as of February 2019. (Doc. 30 at 6, 9.)
Motion for Prejudgment Writ of Attachment, Plaintiff asserts
she is entitled to prejudgment attachment on the Edward Jones
brokerage account because she (1) provided services to the
Defendants and (2) Defendants concealed or transferred assets
to defraud her creditors. (Doc. 30 at 4, 7.) See
N.M. Stat. Ann. § 42-9-1(C) (1978) (attachment allowed
for concealing or disposing of property to defraud creditors)
and (H) (same for debt for work, labor, or services performed
filed a Notice of Bankruptcy on May 20, 2019. (Doc. 41.) The
Notice states that Defendants filed a Chapter 7 bankruptcy
petition on May 17, 2019. (Id.) The Notice asserts
that the filing of the petition “creates a stay as to
all entities pursuant to 11 U.S.C. § 362(a).”
Court takes judicial notice of the docket in the
Defendants' bankruptcy case, In re Dean Horton and
Frances Horton, 19-11162-t7 (Bankr. D.N.M. 2019). It
appears that Plaintiff has not filed for relief from the
automatic stay in the bankruptcy case.
filing of a bankruptcy petition operates as an automatic stay
of, in relevant part, the following: “any act to obtain
possession of the property of the estate;” “any
act to create, perfect or enforce any lien against the
property of the estate;” and “any act to create,
perfect, or enforce against property of the debtor[s] any
lien to the extent that such lien secures a claim that arose
before the commencement of the case.” 11 U.S.C. §
362(a)(3)-(5). The bankruptcy petition also operates as a
stay of the commencement or continuation of judicial
proceedings against the debtors. § 362(a)(1).
Plaintiff has not objected to or responded to the Notice of
Bankruptcy filed in this case and has not sought relief from
the automatic stay in Defendants' bankruptcy case. The
Motion for Prejudgment Writ of Attachment is clearly barred
by the automatic stay because Plaintiff is attempting to
create a lien against property of the bankruptcy estate or
property of the debtors. § 362(a)(4), (5). Moreover,
Plaintiff has provided no reason why the automatic stay does
not apply to this proceeding. The Court therefore concludes
that this case is automatically stayed pursuant to 11 U.S.C.
Court also finds it appropriate to deny the pending Motion
for Prejudgment Writ of Attachment without prejudice, because
the bankruptcy proceedings will likely render the motion
Court does not believe that denying the motion without
prejudice violates the automatic stay, because Plaintiff is
allowed to refile her motion if the stay is lifted. Moreover,
the Court is not granting or denying the substantive relief
requested in the motion. See In re Lyondell Chem.
Co., 402 B.R. 596, 606 (Bankr. S.D.N.Y. 2009) (appellate
court did not violate automatic stay when it dismissed appeal
without prejudice). “So long as the appeal can
be resumed where it left off and no further burdens are
placed on the debtor, the needs and concerns of the debtor,
and the bankruptcy court, are equally satisfactorily
addressed by either [dismissing the appeal or staying the
case].” Here, the parties' positions will be the
same whether the Court denies the motion without prejudice or
leaves it on the Court's docket. Id.
several other federal district courts take the same approach
and deny motions without prejudice when the automatic stay is
in effect. See, e.g., YRC, Inc. v. Motorcar
Parts of Am., Inc., No. 14-2067-JTM, 2014 WL 2898052, at
*3 (D. Kan. June 26, 2014) (in light of automatic stay,
district court denied without prejudice motion to dismiss);
Harris v. Decision One Mortg. Co., No.
12-2224-SHM-CGC, 2013 WL 12049106, at *2 (W.D. Tenn. Feb. 5,
2013) (same); Robert W. Thomas & Anne McDonald Thomas
Revocable Tr. v. Inland Pac. Colo., LLC, No.
11-cv-03333-WYD-KLM, 2013 WL 708493, at *3-4 (D. Colo. Feb.
26, 2013) (same); Deuty v. Hewlett-Packard Corp.,
No. 10-CV-00562-WYD-KMT, 2012 WL 263386, at *1 (D. Colo. Jan.
27, 2012) (denying motions without prejudice in ...