United States District Court, E.D. Virginia, Alexandria Division
For Dale Edwin Sanders, Plaintiff: John J. O'Donnell, Jr., LEAD ATTORNEY, Alexandria, VA.
Stephen R. Farina, Defendant, Pro se, Arlington, VA.
T. S. Ellis, III, United States District Judge.
At issue in this twice-removed diversity contract case is whether a remand to state court is permissible in the face of the automatic stay resulting from defendant's filing of a Chapter 7 bankruptcy petition. For the reasons stated below, the automatic stay provision does not bar remand, which is necessary in this case, inter alia, because the removing defendant is a citizen of the forum state.
Plaintiff is an attorney residing in the District of Columbia. Defendant is a resident of Virginia. Their dispute arises out of a legal services agreement entered into on January 23, 2013 in which plaintiff agreed to represent defendant in a legal action against defendant's employer for alleged violations of the District of Columbia Human Rights Act. On August 19, 2013, plaintiff filed suit in the Circuit Court for the City of Alexandria alleging that defendant breached this contract by failing to pay plaintiff for legal services rendered and costs advanced. On February 26, 2014, with the trial in state court imminent, defendant, proceeding pro se, filed a notice of removal on the basis of diversity. Sanders v. Farina, 1:14cv214 (E.D. Va. Feb. 26, 2014) (Notice of Removal). By Order dated March 14, 2014, plaintiff's motion to remand was granted on the ground that, by statute, the case was not removable because defendant was sued in Virginia, his state of residence. Sanders v. Farina, 1:14cv214 (E.D. Va. Feb. 26, 2014) (Order); see 28 U.S.C. § 1441(b)(2) ( " A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." ).
On September 12, 2014, following the remand to state court, defendant, still proceeding pro se, once again filed a notice of removal stating diversity as the ground for
removal. Plaintiff sought a remand on the same ground that compelled the previous remand. Defendant states that he removed the case the second time ostensibly to " address the Constitutional Issue of a right to Jury trial which is denied me in the Alexandria Circuit Court." Deft.'s Motion to Deny Motion to Remand to State Court. In other words, read charitably, the second removal is based on federal question jurisdiction pursuant to 28 U.S.C. § 1331 as well as diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiff argues that this second removal, which was filed " on the eve" of the parties' upcoming trial in state court, " is an unvarnished ploy to obtain a continuance of the trial date and further delay the proceedings in Circuit Court." Pltf.'s Motion to Remand ¶ 7.
On November 6, 2014, only a day before the properly noticed hearing on plaintiff's remand motion, defendant filed a petition for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Eastern District of Virginia. Defendant argues that the automatic stay provision of the bankruptcy code, 11 U.S.C. § 362, bars this court from acting on plaintiff's remand motion. For the reasons that follow, the Section 362 automatic stay does not bar the necessary and appropriate remand to state court.
The bankruptcy code provides that the filing of a petition for bankruptcy " operates as a stay" of:
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or 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 ...