July 22, 2019

Tenth Circuit: Automatic Bankruptcy Stay Deprives Tenth Circuit of Appellate Jurisdiction

The Tenth Circuit Court of Appeals issued its opinion in Eastom v. City of Tulsa on Monday, April 20, 2015.

Dustin Eastom filed § 1983 claims for malicious prosecution against the City of Tulsa, a Tulsa police officer (Mr. Henderson), and an ATF agent (Mr. McFaddon). Mr. Eastom also filed a negligence claim against the city under Oklahoma’s Governmental Tort Claims Act. After Mr. Eastom filed suit, Mr. McFaddon filed for bankruptcy, and Mr. Eastom’s claim against him was automatically stayed by 11 U.S.C. § 362. The district court entered summary judgment for the City and Mr. Henderson, dismissing Mr. Eastom’s claims with prejudice. It declined to exercise jurisdiction over Mr. Eastom’s state law claims against the City and also dismissed them with prejudice.

Mr. Eastom appealed the summary judgment order, and the Tenth Circuit issued an order to show cause why the appeal should not be dismissed because there was no final judgment as to all parties. Mr. Eastom voluntarily dismissed his district court claim against Mr. McFaddon without prejudice and responded to the show cause order that his appeal was now final because he was time-barred from refiling the claim. However, under Oklahoma’s savings statute, Mr. Eastom had an additional year to re-file his voluntarily withdrawn claims against Mr. McFaddon despite the time bar.

Mr. Eastom waited a year and again appealed to the Tenth Circuit. However, the § 362 stay was still in place, and the Tenth Circuit again ordered Mr. Eastom to show cause why his appeal should not be dismissed for lack of jurisdiction. Mr. Eastom contended the district court’s summary judgment was final because the time for refiling under the savings statute had elapsed.

The Tenth Circuit examined the interplay between the applicable statute of limitations, the savings statute, and the bankruptcy stay, and found that Mr. Eastom’s claims were still not final because the bankruptcy stay was still in place, tolling the statute of limitations. Because the automatic stay prevented Mr. Eastom from exercising legal remedies against the debtor, Oklahoma law prevents the running of the savings statute while the stay is in place.

The Tenth Circuit dismissed the appeal for lack of jurisdiction.

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