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HomeMy WebLinkAbout99-00479 ;'~-"" .-.... \ ". alleged contractual obligation that Plaintiff claims is in breach was an obligation incurred by Hutch Construction, Inc, and not James Hutchison, individually. A true and correct copy of the Defendant's Answer, Together with New Matter is attached hereto and is marked as Exhibit "A". 3, Notwithstanding the fact that Plaintiff knew or should have known that its claim is really against Hutch Construction, Inc. and not James Hutchison, individually, especially since documents which were attached to the Defendant's New Matter clearly establish this fact, Plaintiff continues to pursue its claim against the Defendant. 4. On July 1, 1999 Hutch Construction, Inc. filed for relief under Chapter 7 of the United States Bankruptcy Code at Docket No, 1-,99-02876. Consequently the automatic stay provisions, as set forth in ~362(a) (1) of the Bankruptcy Code are now in full force and effect. A true and correct copy of Hutch Construction Inc.'s Petition is attached hereto and is marked as Exhibit "B". 5. On or about July 23, 1999, Defendants counsel filed a Suggestion of Stay with the Cumberland County Prothonotary 2 WHEREFORE, Defendant, James Hutchison, t/d/b/a Hutch Construction respectfully request that this Honorable Court enter judgment in his favor and against the Plaintiff and dismiss the Plaintiff's Complaint with prejudice, and further award Defendant all such other relief as is proper and just including reasonable counsel fees and costs. Respectfully submitted, CUNNINGHAM & CHERNICOFF, P.C. Date: March 3, 1999 By ~;;;'; "'~ l"'I\,,~L!~'.l'NlI<H-fA.o.J\' Paige M~cdonald'Matthes, Esquire LD. #66266 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106-0457 (717) 238-6570 (Attorneys for Defendants) msm\docs\answers\hucchcon.6 10 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, do hereby certify that a true and correct copy of the Answer to Complaint, together with New Matter in the above-captioned matter was placed in the United States Mail, certified mail, postage prepaid in Harrisburg, Pennsylvania on March 9, 1999, on the following: Michael L. Bangs, Esquire 302 South 18th Street Camp Hill, Pa 17011 (Attorneys for Plaintiff) Respectfully submitted, CUNNINGHAM & CHERNICOFF, P.C. Date: March 9, 1999 By: K ~ J.\'Vl..t'ritXv- O~ - I'n!IJ.J'h,0-0 Paige Macdonald-Matthes, Esquire I.D. #66266 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106-0457 (717) 238-6570 (Attorneys for Defendant) 11 ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 Purchase 'Order .,'....'t..' 1 .,:,. -,.',., Purchase Order No , 3643-91' Date Issued 9/21/98 To:, HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: Foster Good Thru 10/21/98 Ship Via Account No. Tenns Net Due 1138 I lIem DeScription Quantity Unit Price Extension ! I Garage Concrete I'- I I I I I i I I , I I I i I I I , ; I I I I . 0.00; TOTAL : Authorized Signature .. .... ... "---"'-' ... .". ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 :;;jJ;,\ .:. '~~'/".'" ,'Y. ' .... ...... '.. ...... ~ChA~~ prd~r ...ifi . Purchase Order No. 3643-91 Date Issued 9/21/98 To:, HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: Foster . Good Thru 10/21/98 Ship Via Account No. Tenns Net Due 1138 Item DescriDlion Quanlitv Unit Price Extension Garage Concrete r I I I ! ! r , , r , i I , I TOTAL o.o~ Authorized Signature ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 . ..~:.' . , Purch~e Order .., ":'./~ \' Purchase Order No 3636-825' Date Issued 9/8198 To:. HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: YOUNG Good Thru 10/8/98 Ship Via Account No. Tenns Net Due 1138 . Item Descrintion Duantilv Unit Price Extension I Sidewalk Concrete I i I I I I I I , : I I I i I I I , , TOTAL 0.00 AuUlorized Signature (Offtct.t.l'orm I) (W'i'I71 w..c OtOU". Roc.hePIf, t(1 Name or OeblOf' (If lIlodMd~I, flf\W I..uC. F'...... MIdd'tI: IWTCII CO/lSTRUCTIO/l, I/lC., . Pann3ylv.nl. Corpor.tlon All Oll1er Names used by the O<lblor in the lasl6 Y"'" ~h.de ",.med, mlidetl, and ndI M/NII): /lO/IB Name of Joint O<lbtor (SoouM11UoI....... -I: ^' , ,,' . "... ."J .. .,:'" ~'~'.',-,:~:.... '.......: 'c" ',-J:~J FORM III United States Bankruptcy Court HIDDLJ: Dlstrlct of Pl:NNSYLVlINIA All Other Names used by the Joint Debtor in the Iaot 6 y.... ~ndude rnam.d. INMMtl, .rod ~ 1'\1"""'): Soc. See.lrax 1.0. No. (If rroot.lNn 01'oO. "IIIIIQ: 25-1598689 Street Addre"" 01 Oebter (No,. so.... Clly,..... &Z;pCodoI: 414 SOU'I'll :fORK STREET Il.!:AR ENTRAHC8 HECHA/lrCSBlJRG PA 170555 CcunIy of Roaldenee or of the Prinel t Place of Business: ct1MllBRLAND Mamng Addross of O<lbtor (1__ __~ P.O, BOX 7 HECHA/lrCSBlJRG PA 17055 Soc. SecJTax1.D. No. (I"""..............,~: Street Address of Joint Debt'" (No.. so.... Clly....... ZIp Codol: County of Reoidence 0< of tho Prlncl Piece of BlJIIMu: Mailing Addnlaa of JoInl Deblor ,-- --~ Location of Principal Auet. of Buslneaa Debtor (II difl'erlf'lt!rom IttMt add,... aheM): ~ 1-99 -0287 5 ~~.,..-.-.~.~.."~........ "";s'.~"'-~""" ""''''....'''..,...,..."..''........''''''...:.... ., .... . '. '"' ,,,,,,,,.. j;H J"':'f:7'~;?7=~i...y:'!'W:I-.,1 :~ ~'{i;-~ffi~'.:O:,:iv?':.1.r;t';Ii!;:'i~~{.':."~~';i~"'~:"""""" ,...:, '.~,; ."JJ..~!t"~..'u.! ~""'...."'.~",~\'i\,,,.c;SJ-:<,~"''' {,l~" '-':.7..J.t.,.l'>: ~.. "l-';l,,,,....,?,~,',,{:'"< ,., '" ~\"I" ,~., ".'': ' .. . ~, ;": . . . , 'I' ", ^~:; Venua (Check any appflC3b1e box) 1&1 Deblor has been domiciled or has had . residence, principal place of business. or principal assets In this Dislricl fo< 1 eo days immed1alely preceding the date of this petition 0< fer .Icnger port of such 1 eo days than In .ny ether District. . o There is a bankruptcy case conceming doblllf'. aflirlale, gene<aJ partner, 0< partnership pending in this District. Typ" 01 O<lbtor (Chock.n box.. thai apply) Chapter or Section 01 Bankruptcy Code Under Which o Individual(.) 0 Railroad the PaUIJon Ia Flied (Chock one box) 1&1 Corporation 0 Stccldl<oker ~ Chapter 7 0 Chapter 11 0 Chapter 13 o Partnership 0 Ccmmc<flty Broker 0 Chapter 9 0 Chapter 12 o Olher 0 See, 304 . c.... ancillary to foreign proceeding Nature of O<l~ (Check one bex) o CcnslJmerlNon-Buslnosa Il5I Business Chapter 11 Small Buslnesa (Check aD bcxea thai apply) o Debtor;'. sman~asdefinedln 11 U.S.C.S 101 o Debler is and eIec1s to be c:onaiderod . amaJI busineaa unclet 11 U.S,C, S 1121(e}(Optlonaij Filing FH (Check one box) I8l Fun Filing Fee attac:hed o Ring Fee to be paid In InalaIlmenIlI (AppIlcabIe to 1ndIvIduaIs only) Mual atIach algned appIIcalIcn fer lhe COL<1'a conaIderallcn certifying thai the debtor 10 lrolIbIe to pay fee SY.Cepl1n inalaIIments, Rule l006(b). See 0flIclaI Form No.3. StaUstlcaUAdmlnlstraUyelnforinallon (Eslimat.. only) o Debter estim.tes that funds will be available (or cflStribution to unsecured ctecf~ors, 1&1 Debtor eslimat.. th.t, aft... any exempt property is excluded and adminislraliYe expenses paid. there will be no funds available for distrilxJtion to unseclJred cred~ors. l)-IIS SPACe IS FOR COURT USE Otl.Y Estim.ted Number of Cred~ors '.15 ,..... 50-00 ,co.1QQ ~ 1~ 0 0 Il5I 0 0 0 Estimated Asset. I<l~ S50,001 10 S100.0011D $.5CQ,C01lD S1,COJ,001i) 110,CXXl.OO'1D S50,CXXl.OO1Io .......... $Sl,CXXl S100,CX:O ~.CXXl S1/T1iIDon S10m'lIlon S50 miUlon S' 00 mdion 1100 million ~ 0 0 0 0 0 0 0 FILED Harrisburg, R TIMeLSI. A.M. .M a18 Por Estimated Debt. 150.00110 StOO,COO s.soo,OO1lo Sl""""'" 110.COJ,OOtlo S5Q,CXXl,001 '10 $50 tr'MrO\ It 00 I'!'llI1on o RELIEF ORDERED " '. Page 3 1ST CASE of Level I priOled in FULL fonnat. LAMAR A. MCCARTNEY, Appellant v. INTEGRA NATIONAL BANK NORTH, Successor 10 McDOWELL NATIONAL BANK; GARY J. GAERTNER, U.S. TRUSTEE, Ap~lIee No. 96.3023 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 1997 U.S. App. LEXIS 2199 October 24, 1996, Argued February 11, 1997, Opinion Filed PRIOR HISTORY: (01) ON APPEAL FROM THE UNITED STATES DISTRICT COURr FOR THE WESTERN DISTRICT OF PENNSYLVANIA. (D.C. No. 94-i:v-00984). DISPOSmON: Mfirmed. COUNSEL: Donald R, CaIaiaro (Argued), CaIaiaro, Corbett and Bow~r, 1105 Grant Building, Pittsburgh, Pa. 15219, Counsel for Appellant. P. Raymond Bartholomew (Argued), 701 North Hermitage Road, Hermitage, Pa. 16148, Counsel for Appellee Integra National Bank, Sucessor to McDowell National Bank. William R Pineo, 764 Park Drive, P.O. Box 598, Meadville, Pa. 16335, Counsel for Chapter 7 Trustee, For McCartney. JUDGES: BEFORE: STAPLETON and NYGAARD, CIRCUIT JUDGES AND MAZZONE, District Judge, o STAPLETON, J., concurring. · The Honorable A. David Mazzone, Senior District Judge for the District of Massachusetts sitting by des. ignation. OPlNIONBY: Nygaard OPINION: Nygaard, Circuit Judge: The district coUrt affirmed a bankruptcy court's order denying a motion for summary judgmeot on an objec- tion debtor-appellant Lamar McCartney filed to Integra National Bank's proof of claim. McCanney argues on appeal that the banlaupccy coUrt erred by not discharging the debt he owes to Integra. We will affirm. 1. The facts are undisputed. On September 26, 1989, Integra loaned $ 80,000 (02) to Lamar's Restawant & Lounge, Inc., which was guar.mteed by the Small Business Administration. As security for the loan, Lamar's granted Integra a first mortgage on Lamar's corporate property. McCartney guaranteed the loan to Lamar's by granting Integra a seeood mortgage lien on land owned by him individually. In May 1992, McCartney filed a voluntary petition un- der Chapter 13 of the Bankruptcy Code. He then filed a motion to sell Lamar's corporale property. At the conclusion of the sale hearing, McCartney's Amended Plan for Reorganization was adopted as an Interim Plan, pending a status report. The parties and the coUrt agreed at the sale hearing that Integra, acting with the SBA, would put Lamar's corporate property through a sheriff's sale to determine what deficiency, if any, McCartney, as guarantor of Lamar's loan, owed to Integra. Fearing that the sheriff's sale would not occur until after the bar date in McCanney's bankruptcy proceed- ing, Integra filed Proof of Claim No. 6 in the amount of$ 38,564.66 against McCartney's individual property pledged as collateral for Lamar's loan. The state coUrt subsequently sold Lamar's corporale property. Integra purchased Lamar's corporate [03) property at the sale for costs and taxes. Integra then resold the property and agreed to modify its proof of claim to show a deficiency of $ 29,638.14 plus interest and attorney's fees. Almost ten months later, McCartney filed an objec. tion to Integra's proof of claim, asserting that Integra's claim on Lamar's underlying debt was satisfied as a 1997 U.S, App. LEXIS 2199, .3 Page 4 lIIaller of law because Imegra failed to file a petitioll to fix the fair markel value of the propeny within six months of the sheriffs s.ue as required under the Pennsylvania Deficiency Judgment Act, 42 Pa.C.S,A. ~ 8103. 80th panies filed cross-motions for summary judgmellt. which the bankruptcy coun denied. n I nl On April 12, 1994, the bankruptcy court heard argument on the valuation of l.1mar's property sold at the sheriffs sale. On May 3,1994. the coun de. termined that the value of the Lamar's propeny was $ 20.000 and directed Integra to recalculate its defi. ciency claim based on this value, On July 20, 1994, the bankruptcy court convened the Debtor's Chapter 13 case to a Chapter 7 case. Since then, the Chapter 7 Trustee has sold some of McCartney's other prop- eny and applied the net proceeds to the debt owed to Integra. As a result, it appears that the balance due Integra has been reduced to $ 4,379.88 plus interest and additional attorney's fees. [.41 II. On appeal, McCartney assens that the bankruptcy coun erred by concluding that the aUlomatic stay pro- vision of the 8ankruptcy Code, 1/ U,S.c. 9362, pre. c1uded Integra from complying with the requirements of the DJA. More specifically. McCartney maintains that the automatic stay applies only 10 actions commenced against McCartney himself, and therefore, the stay im- posed in his bankruptcy did not prevent Integra from seeking a deficiency judgment against Lamar's within the time permitted under the DJA. Since Integra failed to file a petition in state court to fix the fair market value of Lamar's corporate propeny within six months of the sheriffs sale, McCartney argues, Integra's claim against Lamar's is deemed released and satisfied as a matter of law. As a consequence, McCanney contends that he, as guarantor, is also discharged from any deficiency re- maining on Integra's loan to Lamar's, Thus, McCartney concludes, Proof of Claim No.6 tiled by Integra in his bankruptcy should be stricken. III. Under Pennsylvania law, every judgmen~creditor who forces real estate to be sold in an execution sale must comply with the DJA to protect its claim to any unpaid balance remaining [.51 after the sale. 42 Pa.C.S.A. 9 8103. Under the DJA, the judgment creditor has six months after the debtor's collateral is sold in which to petition the court to fix the fair market value of the real propeny, 42 Pa.C.S,A. ~ 5522(b), Failure to file a petition widlin this lime period 'creates au irrebuttable presumption that the creditor was paid iu full in kind.' 1l1/1ey Trust Co. of Palmyra v. Lapitsky, 339Pa. Super. 177, 488 A,2d 608, 61/ (Pa. Super. Ct. /985). This presumption selVes to discharge all panies either directly or indirectly liable to the judgment creditor for pay. ment of the debt, including guarantors. 42 Pa.C.S.A. ~ 8103(d): see also Commonwealth Oankand Trust Co. v. Hemsley, 395 Pa. S/lper. 447, 577 A,2d 627, 631 (pa. Super. Ct.). allac. denied, 583 A.2d 793 (Pa. 1990). Significantly, to comply with the requirements of the DJA, the judgment creditor must either (I) name in the petition, or (2) give notice to, any 'debtor, obligor, guar- antor, mongagor, and any other person directly or indi. rectly liable to the judgment creditor for the payment of the debt' 42 Pa.C.S.A. 9 8103(b). Default on this no- tice requirement discharges all personalliabiliry to the judgment creditor for panies neither [.6J setved with notice nor named in the petition. Id. It is undisputed that Integra has never filed a petition in Slate court to fix the fair market value of Lamar's propeny sold at the sheriffs sale. Under normal cir. cumstances, failing to file a petition would discharge whatever remaining debt Lamar's owed to Integra, Moreover, Integra's failure to meet the statutory re- quirements of the DJA would also normally discharge McCartney's guarantee of Lamar's debt because, as a matter of law, there is no underlying debt owing to Integra. This case, however, does not present a normal situation where the DJA can be applied by its literal terms. As the bankruptcy court rightly noted, when McCartney filed for bankruptcy, the automatic stay provision of I1 U.S.C, ~ 362(a) was triggered and effectively pre- cluded Integra from state court actions of any type against McCartney, Consequently, McCartney cannot use Integra's failure to comply with the DJA to avoid the proof of claim Integra filed against him. Section 362(a) of the Code operates to stay ,.. (I) the commencement or continuation, including the issuance or employment of process, ofajudicial, admin. istrative, or [.7] 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 re- cover a claim against the debtor that arose before the commencement of the case under this title. . . . II U.S,C. 9 362(a)( I) (1996). The automatic stay serves several purposes. The stay gives a debtor a breathing spell from creditors by stopping all collection effons -.. ....- ~ . ....... ~ l 1997 U.S, App. LEX IS 2199, "7 Page S and all foreclosure actions. Maritime Elec. Co.. Inc. v. Unlled Jersey Bank, 959 F.2d ll94, 1204 (3d Cir. 1991) (citalion omiued). [n chis respect, the SlaY per- mits the debtor to attempt a repayment or reorganizalion plan; or it simply relieves che debtor of che financial pressures that drove him into bankruptcy. Id. 011204. The stay also protects creditors by preventing panicu- lar creditors from acling unilaterally to obtain paymeut from a debtur to che detriment of other creditors. Id. (citalion omiued). Although the scope of che automalic Stay is broad, the clear language of section 362(a) stays actions only against a "debtor. " Id. (citing Association Of SI. Croix Condominium Owners v. SI, Croix HOlel Corp" 682 F.2d 446, 448 (3d Clf. 1982)). [OS) As a consequence, "it is universally acknowledged that an automatic Slay of proceedings accorded by ~ 362 may not be invoked by entities such as sureties. guarantors, co-obligors, or ochers wich a similar legal or factual nexus to che. . . debtor." 959 F.2d 1194 01 1205 (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, ll96-97 (61h Clf. 1983)); see also United SillIes v. Dos Cab= Corp., 995 F.2d 1486, 1491.93 (9th Clr. 1993) (hold- ing that Slay does not preclude government from pursu- ing deficiency judgment against nondebtor cosignors of promissory note); Croyden Associales v. Alleco, Inc., 969 F.2d 675, 677 (81h Clf. 1992) (refusing to extend Slay to claims against solvent codefendants), cert. de- nied sub nom, Harry and Jeanette Poeinberg Fowuiation, Inc. v. Croyden Associates, 507 U.S. 908, 122 L. Ed. 2d 650, 113 S. Ct. 1251 (1993); Credit Alliance Corp, v. Wj[[lams, 851 F.2d 119. 121-22 (4th Clr. 1988) (en. forcing a default judgment entered against a nondebtor guarantor of a note during che pendency of che corpo- rate obligor's bankruptcy). As one court has reasoned, a primary rationale for refusing to extend che automatic Slay to nonbankrupt third panies is to insure that credi. tors obtain (09) "che protection chey sought and received when chey required a third parry to guaranty che debt. " Credit Alliance, 851 F.2d at 121; accord In re F.T.L.. Inc., 152 Bankr. 61, 63 (Bankr. E. D. Ill. 1993). This prohibition. however, has been liberalized in a number of cases where courts have applied che automatic Slay protection to nondebtor third panies. Relying on A.H. Robins Co.. Inc. v. Piccinln, 788 F.2d 994, 999 (4th Cir.), cert. denied. 479 U.S. 876, 93 L. Ed. 2d 177, 107 S.CI. 251 (1986), chese coUrtS have extended the automatic Slay to nonbankrupt codefendants in "unusual circumstances." As the case law demonstrates, coUrtS have found "unusual circumstances' where 'chere is such identity between the debtor and the third-pany defendant that che debtor may be said to be the real pany defendant and chat ajudgment against the third-pany defendant will in effect be a judgment or finding against the debtor.' 788 F.2d 01999 (relying on both the automalic Slay pro, vision and che bankruptcy court's equilable powers un- der 11 U.S. C. ~ 105 to enjoin actions against nondeblor codefendants in che Dalkon Shield products liability lit- igation because of che potential impact on che eSlate and the availability [OIOJ of insurance proceeds to satisfy the Claims); see also, In re American Film Technologies, Inc., 175 Bankr. 847, 855 (Bankr. D. Del. 1994) (Slay- ing prosecution of wrongful discharge claims against for- mer and present directors of debtor corporation because of debtor's indemnification obligations and its possible exposure to collateral estoppel prejudice); In re Fomily Health Services, Inc., 105 Bankr. 937. 942-43 (Bankr. C. D. Col. 1989) (slaying collection actions against nondebtor members of debtor HMO because judgments against nondebtors would trigger claims for indemnifi- cation from che debtor HMO). CoUrtS have also extended the Slay to nondebtor third parties where Slay protection is essential to che deblor's efforts of reorganization. See, e.g., In re i.azJJrus Burman Associates. 161 Bonier. 891, 899-900 (Bankr. E. D. N. Y. 1993) (enjoining guaranty actions against nondebtor principals of debtor pannerships because principals were che only persons who could effectively formulate, fund, and carry out debtors' plans of reorga- nization); In re Sleven P. Nelson, 140 Bankr. 814, 816- 17 (Bankr. M. D. Fla. 1992) (enjoining actions against nondebtor guarantor of debtor [OIIJ corporation's obli- gations where guarantor was president of debtor and president's services, eXpertise and attention were essen. tial to che reorganization of che debtor); see also, Paul H. Deutch, Expanding The Automatic Slay: Protecting Nondebtors In Single Asset Bankruptcies, 2 Am. BankT'. 1nst, L. Rev. 453 (1994), Here, McCanney argues that the automatic Slay onlyoapplied to him in his individual capacity, not to Lamar's, As such, he maintains that Integra was not Slayed from pursuing a deficiency judgment in Slate court against Lamar's, as required under the DJA. In response, Integra concedes that under normal circumstances the automatic' stay does not preclude creditors from pursuing cheir right to payment from nondebtnr third panies. Indeed, Integra notes that, acting in compliance wich this gen- eral rule, it pursued Lamar's to foreclosure and sheriffs sale. However, Integra asserts that it could nOI have pro- ceeded any funher against Lamar's to obtain a deficiency judgment because it would have been required under the terms of the DJA to name McCanney as a respondent in che petition and thereby violate the automatic Slay pro- tecting him. The bankruptcy court found IDlegra's [OI2J . 1997 U.S. App. LEXIS 2199, .12 Page 6 argumelH 10 be persuasive and reasoned thaI permitting IlIlegra 10 name Mr.Canney in a deficiency judgmeOl ac- tion in Slale coun at the same time lbat bis bankruplcy case was pending would defeat lbe purpose of ~ 362 to cenlralize all prebankruptcy civil claims against a debtor in lbe bankruptcy coun. In re McCartney, 165 Bankr. 18, 21 (Bankr. IV, D. Fa. 1994). We agree. Ie is undisputed that, bad Integra sought a deficiency judgmeOl against Lamar's, it would have been required under the DJA to name McCanney as a respondeOl in ilS petition or risk discbarging him as loan guarantor. It is also undisputed that, bad IOlegra named McCanney as a respondeOl in a deficiency action against Lamar's, it would have clearly violated the au- tomatic stay in place in his bankruptcy. Moreover, it is clear that following the sheriffs sale, Lamar's, as a cor- porate eOlity, no longer had any asselS. Consequently, McCanney, as guarantor. would have been liable for satisfying any deficiency judgment claim assened by Integra. Simply Slated, there was no way for Integra to pursue a deficiency jUdgmeOl action against Lamar's and to protect ilS right to satisfaction of Lamar's debt wilbout involving (.13] McCanney in the process. Given McCanney's necessary panicipation in any de- ficiency judgment action initiated by IOlegra against Lamar's in Slale coun, we find that the bankruptcy court properly concluded that the automatic stay extended to enjoin Integra from complying with the requirements of the DJA. This case falls squarely under the "un- usual circurnslallces" exception as developed in A.H. Robins and its progeny: any deficiency judgment re- covery from Lamar's would have necessarily impacted upon McCanney's estate. Indeed, because McCartney, as guarantor, was secondarily liable for any deficiency entered against Lamar's, and Lamar's, folloWing the foreclosure and sheriffs sale, had 00 assets, McCartney would have been the real party defendant in a deficiency judgmeOl action by Integra against Lamar's. Any defi- ciency judgment entered against Lamar's would have op- erated as ajudgment or finding against him; an outcome clearly in tension with the purposes of the automatic Slay, Accordingly, IOlegra was slayed from pursuing a deficiency jUdgment action against lbe nondebtor third pany Lamar's because McCanney was, in essence, the real pany in interest. IV. Assuming, arguendo, [.14J that lbe automatic stay precluded IOlegra from pursuing a deficiency judgmeOl action in Slale coun, McCanney assens that Integra should have sougbt relief from lbe automatic stay to allow it 10 name both Lamar's and McCanney in a defi. cieocy judgment petition. This same argumeOl was con- sidered and rejected in In re Wilkins, 150 Bankr. 127 (Bankr. M. D. Fa. 1992), an opinion we find instruc. tive. In Wilkins, lbe creditor sought relief from an auto. matic Slay to commence a deficiency judgment action under the DJA against both the debtor and nondebtor obligors. The co un denied the creditor's motion for two primary reasons. First, lbe court held thatlJ US.C. ~ 100(c) specifically extends the six-monlb limilation pe_ riod for deficiency jUdgmeOl actions under 42 Pa.C.S.A. ~ 5522(b). n2 Id. ar128. Thus, contrary to the cred- iror's argument, the Wilkins coun found no urgency that the debtor's Obligation to the creditor would be dis- charged unless the creditor received relief from stay and filed a deficiency petition within the six mooth limitation period. Second, the court noted that the deficiency is- sues were likely to be settled in the bankruptcy court and consequeOlly, (.15] there was 00 reason for the debtor to defeod litigation in state court that could be settled in the bankruptcy forum. Id. at 128-29, In this re- spect, the court expressed its concern that the debtor not be "burdened by litigation and resulting legal fees if unnecessary at this time. " Id. ar129. n3 n2 Section 108(c) of the Bankruptcy Code reads, in peninent pan: If applicable nonbankruptcy law. . . fixes a pe_ riod for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor,. . . and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of- (I) the end of such period, including any suspension of such period occurring on or after the commence- meOl of the case; or (2) 30 days after notice of the termination or expira- tion of the Slay under section 362 , . . with respect to such claim. n3 The court also held that the creditor must com- mence a deficiency judgment action against the non- debtor obligors within the six-month limitation pe_ riod permitted by state law. Wilkins, 150 Bankr. at 128. Significantly, however, the coun expressly noted that pennitting the creditor to proceed against the ooodebtor obligors would have 00 impact upon the deblor's deficieocy liability, and that the assets of the ooodebtors could be collected without risk of dis- chargiog the deblor pursuant to the DJA. Id. Thus, 1997 U,S. App. LEXIS 2199,0'5 Page 7 unlike tlle present case, tlle Wilkins court found no .unusual circumstances. that would warrant extend- ing the automatic stay 10 the nondebtor obligors. [0161 We agree with the Wilkins court thaI debtors should not be burdened by state court liligation when deficiency judgment actions impacting upon the debtor's estaie can be settled in the bankruptcy forum. Indeed, to per- mit state court deficiency judgment actions involving the debtor to proceed when they can be adjudicated in the bankruptcy court is 10 do violence 10 the purposes of the automatic stay. As discussed earlier, by central. izing all pre bankruptcy civil claims against a debtor in the bankruptcy court, the debtor is granted a "breath- ing spell" during which he is relieved of the financial pressures that drove him 10 bankruptcy. Maritime, 959 F. 2d at 1204. The centralization of all claims in the bankruptcy court also permits the assets of the debtor's estate 10 be marshaled for distribution 10 creditors in an orderly and equitable fashion. Id. (citation omit- ted). These benefits of the automatic stay could not be achieved if credilors are permitted relief from stay to pursue state court deficiency judgment actions impact- ing on the estate of the deblor. Debtors would be forced . to expend valuable time, energy and resources defending against state court litigation that [017J could be settled directly in the bankruplcy court. n4 n4 We note also that considerations of judicial economy weigh against granting creditors relief from stay to pursue state court deficiency judgment actions that impact upon the estate of the debtor and could be settled in the bankruptcy court. Indeed, the time, energy and resources of the courts are no less valu- able commodities to preserve when it is possible to litigate a claim in one forum instead of two. Moreover, we fail to see how McCanney was harmed by Integra's failure to seek relief from the automatic stay. As the record clearly demonstrates, the bankruptcy court held a valuation hearing and heard argument concerning the fair market, value of Lamar's property sold at the sheriffs sale. The court subsequently entered an order finding the value of Lamar's property 10 be $ 20,000 and directing Integra to recalculate its deficiency claim based on that value. Thus. the bankruptcy court af- forded McCanney an opportunity to present evidence and testimony [018] at a hearing specifically convened to determine the fair market value of the property sold at the sheri ff s sale. This is precisely the same opportunity 10 be heard that McCanney would have beeo granted in a state court deficiency judgment action commenced under the DJA. See 42 Pa.C.S.A, !l8103(c)(4). In ad. ditioo, the bankruptcy court's determination of the fair market value of the Lamar's property resulted in a de- crease in the deficiency claim owing to Integra, fur- ther demonstrating that McCartney was not harmed by Integra's failure to seek relief from the stay. Insofar as McCartney would have us find that he was prejudiced by his inability fully 10 escape liability for his guaranty, as may have been possible under the DJA, we decline to do so. We will nOI transmogrify the DJA into a means for guarantors to escape liability from their guaranties. oS Accordingly, we conclude that none of McCartney's substantive rights were prejudiced by Integra's failure to seek lelief from the automatic stay. oS See Fidelity Bank, N.A. v. Bourge" 444 lb. Super. 52, 663 A.2d 213, 214 (lb. Super. Ct, /995). alloc. denied, 670 A.2d 142 (lb. /996), holding that the purpose of the Deficiency Judgment Act is to relieve a debtor of further persooalliability to the creditor, if the real property taken by the creditor on an execution has a "fair market value", [sic] as of the dare of the execution sale, sufficient so that the creditor may dispose of the property 10 others (or even, sometimes, use it himself) without a net loss to the credilor[.] (citations and internal quotations omitted) (emphasis added). [019] V. In his finaI argumenl, McCartney asserts that the bankruptcy court erred by holding that II U.S. C. Ii /08(c) operated to suspend the limitations period for initialing a deficiency judgment action in state court pursuant to the DJA. Because we have already deter- mined that Integra was stayed from pursuing a deficiency judgment action in state court against either Lamar's or McCartney, we need not decide this issue. Nonetheless, we note parenthetically that the Pennsylvania Superior Court has unequivocaIJy held that, under II U.S. c, Ii /08(c)(2), the six month limitation period for the filing of a deficiency petition pursuant to the DJA does not expire until thirty days after notice of the termination of the automatic stay, Citizens National Bank of Evans City v, Gold, 439 lb. Super, 254, 653 A.2d J245, /247-48 (lb. Super. Ct. /995) (citing Willcins); accord /n re C-K. Smith, /92 Bankr. 397, 399-400 (Bankr. W. D. j.::!!I1Q "'g~:t m f"<IO\:gs:J~ f l":aPJIll J J ~."~ ~ ~~;~ vi 1Il~~~ ":!;r;:~ m .!l .::!!IIQ ! J:~::: ~...ao~~JQ "'0\.., <.en en .... U :3 en :J cr: I' t il"., I"~ i':,.. I. I i:. , ,. I,. 1-' , . '~:( !,,' '". ij~f JR FE ,~:. "' ,., .<:, ,1:; fii r~;;.;,. . ..h ~'~. ~...,. :",\ 'f; ..~,.. 1,..~"" j"." ~'t:: ;;1 ~, ,. 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NC. \ I PHONE 717)737.3411 FAX (717)761.5019 InVOICo No Dille or InvOice 02~:!1C3 11/"6/")~ OonAI"'AO[ OnCAVAnO"l oSTn((r""lOOnIV[WA,. CCPoSTUUC1\OOl . CRUSHED STONE . SAND . SLAQ . TRANSIT MIXED CONCRETE . ASPHALT PAVING & MATERIALS TERMS: Planl Locallons: 205 Creok Ad. Soulh F'ont 51. 5S Locusl Poinl R.D. Camp Hill, Pa S100110n, Pa Mocllanlcsburg, Pa . o L o HUTCH C~~SrRUCTIJ~ Pi) 8CX ~ ~ECH'~ICS8URG, PA 17]55-0QOO . . '. Toland. Pa !\lcr 30 04"S t 'Ilo '"C" MONTH OCLINQUCNC, CHAAoe 4,.rc" 3004'. Graver Pran!:. Dolivered To: T o BOW/fANS HILL LOT 91 .'."....'..''''U. 'II'''-''''(''''~ ,(1'!j::;;1"-~'1~' ,. -'il!"';', F~;'-: """',;:';' eR'IC eif">,~ il~?rtE~~WEl!lD; ~ill~! '-j ::.;t, '-:~:: .J.,' ,.-,' r:',;:'~)~ ,.., ,..,..."....,..,.... Job Number: ~.~~_\tV7~O.A: t:e~:r;)i~.t!.:,"~' ~:.~,~IO'~hr.~i;~[${ ~'.. 7;"..~"'l'!.tJ;;..':::....1"m,r......:' P.::1'.f/03!i98'~:j:,: : if~if!II~ Vj:/.::~;'~~/~~>' TICKET NUMBER 3057485 PROD CODe ;':,60.8 ','608 QUAlITITY /l2A STONE 19.B50 TON 67. STATE SALES TAX PAY THIS AMOU/lT '"., ~. "I" '." ',,;. ;1/..'. . ~.-. ,", . ,'.- ""'.' , ~'-".."" .,;~~. ~"..::;'::~~~?f~it0~' ~::'~""':-7~':.'::' --~:-.;:!.::"~/.h '_ j{;f~~'~~~~g;~~:~[f',f~:~;;}:;;:::: . f':..:. :,.r.J,::p,f-',.(.......attoo...-:r:.' ~{;.~~4~:..~-:..,,;;"... ~,r.~;''1-'' ;~I~.f;;~~~i}}~fli;!\~Ti:~N!~..r ""_:_'C'. PLEASE PAY FROM THIS INVOICE "''':. 737.3411 939,9586 795.9000 , 486,5111 TOTAL ANOUNT 151.85 166:H ":i CU'STO"!ERN'O:/' INY~ICENO.' ': 'P~Tli: ',.'1 ',I .'AMOUNT ' ,< '- r. ',. .. . TO ASSURE PROPER CREDITING OF YOUR ACCOUNT, PLEASE DETACH AND RETURN THIS PORTION WITH YOUR PAYMENT , , , , , , 11 -- ....... ,.. .. j H ~:;. :3 160.ln .'.1 ...J':'" . , , , , , EXHIBIT A9 ":2IZ~if~~iffii~~~!~]if~~i.ii~~~i~i~i1~.i; :::..;:..... ',. ...1' o- f' C'-, .. i. .~ " II , , , 0 (',- ( , , C) , ,,, LI_ , I "'.,. 1,1, t." ::J U c> 0 ,., "" 0 U U " ~ ~ 0 U '0 " '" U ::> ;: '" '0 ~ " 0 .c " S u ~ '- ,~ 0 -5 '0 u c2 ;: ';:; u ~ u 'ei; ,., -2 . " .c 'C ,., " 0 ~ J ~ ~ " ~ " :;; '- ;;: 0 o c.i ... ~ f:: u: ... LL....<C olflz ua:~ z....~ a:(/)> WC(/) J:zz ooz ollirl~ ::;; (/) ,. <C . v J:ZC: C!lo:l ~~ffi z"'- Z a: :l a: u :2 o ,... II) I~ r::- ... ,... - ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 Purchase Order , " . 'J PurChase Order No, 3643-91 Dale Issued 9/21/98 To:. HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: Foster Good Thru 10/21/98 Ship Via Account No. Terms Net Due 1138 Item DescriDtion Ouantitv Unit Price Extension Garage Concrete I , , I TOTAL 0.00 Authorized Signature ., Purchas~ Order , .,' ~~. ", Purchase Order No. 3643-91 ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 Date Issued 9/21/96 To: HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: Foster Good Thru 10/21/98 Ship Via Account No. Terms Net Due 1138 Item Descriotion Ouantitv Unit Price Extension Garage Concrete . I ! I I ! TOTAL 0.00 Authorized Signature J ?' ,'; ~ . ; . \".,~" -' ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 Purchase Order Purchase order No. 3637-825 Date Issued 9/16/98 To: HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: YOUNG Good Thru 10/16/98 Ship Via 11138 Account No. Terms Net Due Item DescriDtiDn Quantitv Unit Price Extension Back Porch Concrete 4 1/2 yds of 3000 I L i I TOTAL 0.001 i Authorized Signature ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 . . Purchase Order , ....,.l,' purchasedr'der No. 3607-91 Dato Issued 7130/98 To: HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: FOSTERS Good Thru 8/29/98 Ship Via Account No. Terms Net Due 1138 Item Descrintion Quantitv Unit Price Extension I 20 TON 2B STONE 1. 00 I I I , I I I I ; I I I , I I I I I i TOTAL 0.001 Authorized Signature Cl ~ ~ ., :; .... " > Q 0 - i= " .... ~ r " d 0 " ~ Z III '" t'< ~ ,', ~ r '" ~ ~ ~ '" ~ " ~td .., ~ . . ~ ~ :; " .., 0 ~ fJl ~ >- CC ~ n tJ)::::: r-;:.l (-/ lL._;_ ;!-)i':':,: L ~') 6~".' wli: r;:~,:.! -,- t-- l.l_ o lfJ -~ >- I.:;: ~~~~ :_~ ~.~~~ ~~ ....."'. "'r,) ',,,.;' ) :-::~ '.I_/,_ LUtiJ ('~J l.L '0;); :'5 u ..... c... ,," I C~ (1_ "'" m (JI >- ~ cr; U~ -, i..: ::i.( ".~ N LU , ! C.) , ;~~<~: ~ " c:: ,~ - r.... - .J n "{ " :I " , - L '. <,.J ''', , I.~ lU C-J , Li-, ,. ti..: c_ , i ,:;iJ "i' l, ,I " "- ,... (", It. ...'~ C" ::) 0 en (J @ . . '" c- o u U u ~ ~ o U '0 " '"' u " ~ '"''2 u 0 .0 ,~ o ~ ~ '" 0 -='E c2: t~ u - >.:~ .0 ~ U 0 .. '- ~ ~-= - - ~ o ~ ,S ~, " ~ :3 ~ c.i ~ 0.: r:: u: ~ LLI-Cl: otllz !:1 IXI- ~ Z ;:.,J IX II) > WOII) :rzz CJOZ oll&l~ :;; II) . < . Cl :rZIX Clo::l Z!)!lD _wll) ~NiX ::l IX CJ ~ . , . ~ '" Ii ~ ~ ,.. - ().. ...:' ~1 ---.. 00 ..:!. 0- ,~ ~ @ ;: '. ' ORDERED BY: Hutch Construction, Inc. P.O, Box 7 Mechanicsburg, PA 17055 Purchase 'Order '. ;l-I(I~'. I'!', . ,', ,', Purchase Order No. . 3643-91 Date Issued 9/21/98 To:, HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMp HU,L, PA 17011 Ship To: Foster Good Thru 10/21/98 Ship Via Account No. Tenns Net Due 1138 ! Item DescriDtion Ouantitv Unit Price Extension Garage Concrete I i I I I I I i i I i I , I I i , , , ; , I I i I , TOTAL 0.00: , Authorized Signature ..--....... _. a,. .,. ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 );L.< :. '~!'."'" . ,.. .'... , '., ...... Pwcl1A~~Prd~r ."ifi. . Puichas'e Order No. 3643-91 To:. HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Dale Issued 9/21/98 Ship To; Foster Good Thru 10/21/98 Ship Via Account No. Tenns Net Due Item DesClir:tlion Quantity Unit Price Extension Garage Concrete I I I I I I ! : i : , i I . I r TOTAL 0.00/ 11.38 Authorized Signature ',.,,', .,.~:':. , 'W':" ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 '" .,-..-..~..~,. , , Purchase Order Purchase Orde~ No, 3637-825 To: HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Date Issued 9/16/98 Ship To: YOUNG Good Thru 10/16/98 Ship Via Account No. Terms Net Due 1138 Item Description . Quantity Unit Price Extension Back Porch Concrete 4 1/2 yds of 3000 I ! , I I , t i I ! ! ! , , , ! i i i I t I j I TOTAL 0.00; I J Authorized Signature ." ORDERED BY: Hutch Construction, Inc. P.O. Box 7 Mechanicsburg, PA 17055 , ."'.l:' . , Purchase Order .;.,,:\. Purchase Order No 3636-825' Dale Issued 9/8/98 To:. HEMPT BROTHERS 205 CREEK ROAD PO BOX 278 CAMP HILL, PA 17011 Ship To: YOUNG Good Thru 10/8/98 Ship Via Account No, Terms Net Due 1138 Item Descriotion Quantitv Unit Price Extension Sidewalk Concrete ! I r I i , I r I i I I .. I I ! I I , i , j TOTAL 0.00! , Authonzed Signature (Oft'ocl4lFonn 11(WD7)W....OItlU".A~. f(1 FORM &1 Name of OobtOl' (If I/ldMdIl&l.""" t..-" F"... lr,l~'-); IIVTCH CONSTRUCTION, INC., . P~nn3ylv&nlj Co~r.t!on All O1her Nam.. used by !he OeblOl' in Iho la.t 6 yea" (.nclude m_m.d. mu~~......s ~ NU......): NO~ Nams of Join! OeblOl' _I<Yo< _ ......,: '::~':"::~':>';.~:, ',: .':"...'~~~~~ United States Bankruptcy Court HIDDLJ: District of pl:mISrLVl\NrA All O\he( Names used by Iho Joint DeblOl' in Iho Iaol G yea... (\"e".~. rNiOM. _nd trIod4i 1\M"IM1: Soc. Sec,rrax 1.0. No. (,frr'lOl'_hnon.. stltII -II): 25-1598689 Street Address of Oeblor (No. & SbM(. ay, Sbtlt & lip Coo:S.I: 414 SOUTH rollX S=7' IlEAR BN'l'RAHCll HECIlANICSBURG PA 170555 County 01 Roald.nee Of of !he Prinel I Place of BUll......: ct1IoaI1mLAND Mailing Addr.... of OeblOl' lY__ __~ P.O, BOX 7 HECIlANICSBURG PA 17055 Soc. Sec.trax 1.0. No. (lfmoreltlanCW'4,stNall): 51reel Address 01 Joint Deblor (No.' so.... COy, _.~, Codol: County of ReeIdence or of Iho P Place of BUIlMu: Mailing Addma of Jolnl Debler 11_ _ __~ Localion 01 Prinelpal AloGtl of Bualnesa Doblor (I dlf.,MC Prom II:Mt adclr... abow): SAJ.G:' 1-99 -02875 ~-=T!ID-'^ "'"'~~."-''''''''''''.m!'''''~''-~'"''''' ....".......'.....,...,.....w"......'."""';"" ' . .'...., "','" .,'...,. ""'~ ~y~l.:<~l~I~: r;:v::'7'\-~~""0"~..nm:'r";. ~;;; ~ O~~(;F.:~n71i..r;Y~.fl:';.~?i~:~;'.~~;';}..i'.:.,..'"~ ' ',', " : """.H , "lW:"l'''i'' .?'-J,."l.J,~~:J"''','l\,\,~.,~~,~~tv\ ).~"t {. '.!h)J: , . ~,;;'h'f:~ "-< '..~I,;;:'",~,:, ,. ,:V:',,,,IA';'" ~""\ 1~'1 "t:>''/'" ',' "", ., .. " " . .,.: Venue (Check any appr;cable box) l&I Debtor has been domiciled er has had a residence, principal place of business, er principal assets in this DisIrict ler 180 days immediately preceding Iho dal. 01 this petition 01' fer a longer part of such 180 days than in any othet District. . o There is a bankruptcy case concerning deblOf'I aIr,late, gereaJ partner, er partnership pending in this DisIricl, Type of.Debtor (Check aD box.. tha1apply) Chapter or Section 01 Bankruptcy Cod. Und.r Which o IndMdual(.) 0 Railroad the p.lItlon 18 Flied (Check one box) l&I Corporation 0 Stockbroker 181 Chapler 7 0 Chaplet 11 0 Chaplet13 o Partnenhip 0 Commocflty Brok... 0 Chapler 9 0 ChlJpI...12 o O1h.r 0 Sec, 304 . Case ancillary to foreign proceeding Na1url of Oobto (Check one box) o ConsumerlNon-Butlneu IXI Business Chapt.r 11 Sl11l11 Busln... (Check ea 00- thai apply) o Debter is. smen.!Iusir,...... defined in 11 U,$,C, S 101 o D.btOl' is and ei<ds to be conaidered . omaD busiro<osa under 11 U,5,C, S 1121(.)(OpllcnaQ 5tallstlc.UAdmlnl.lrallv.lnlonnatlon (Estimates only) o DebtOl' eslimal.. that funda will be available for dislribution 10 unsecured creO.OI'S, l&I DeblOl' eslimat.. that, anet any exempt property is excluded and administrative expenses paid, there ";11 be no lunds available for distribution to unseoJred cred~OI'S, Filing FlHI (Check one box) 181 FuD FIling Fee a1Iached o Fiing F... to be paid In inslaIlmenta (AWo-hlo to 1ndMduaJs only) MUIlIllach ligned ~ fer the court'1I ccnalderalIcn c:Oftifying !hat the debIor Ie unable to JlllY fee CDa:epI in ~, Rule l006(b), See 0flIciaI Form No, 3. TI-ilS SPACE IS FOR COURT USE ONLY o 1&-<0 o lQ.OO 181 lco.1GG o =... o I=- o fiLED Harrisburg, R TIME I5J:.. A,M. .M Esllmaled Number of Cred.OI'S 1.15 Eslimaled Asset. SO WI ~.OO1 WI l5O.cm I UXl.CXXI !ill 0 018 1100,001 ., S5OO,OOO o S5OO.CC1lD S 1 miIUon o 11,CIXl.OO11lo 110/T'lllllon o I\O,cm,0011o S50,cm,001'' $.5Om&IIlon IIOOInlllion o 0 .... Nn S100tNIllon o Estimaled Debt. Per milh yCourt Oeputy Clerlc S10,OXl.0011o s.5O,cm.C01 b Men lhal\ I5Otn<IIon S1001nl'lon S100mllUc:tl o 0 RELIEF ORDERED .. , . " " Page 3 1ST CASE of Level I priOled in FULL fonoal. LAMAR A. MCCARTNEY, Appellant v. INTEGRA NATIONAL BANK NORTH, Successor 10 McDOWELL NATIONAL BANK; GARY 1. GAERTNER. U.S. TRUSTEE, Appellee No. 96-3023 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 1997 U,S. App. LEXIS 2199 October 24, 1996, Argued February ll, 1997, Opinion Filed PRIOR HISTORY: ['I] ON APPEAL FROM THE UNITED STATES DISTRICT COUKf FOR THE WESTERN DISTRICT OF PENNSYLVANIA. (D.C. No. 94-<:v.oo984). DISPOSmON: Affumed. COUNSEL: Donald R. Calaiaro (Argued), Calaiaro, Corbett and Bower, 1105 Grant Building, Pittsburgh, Pa. 15219, Counsel for Appellant. P. Raymond Banholomew (Argued), 701 North Hermitage Road, Hermitage, Pa. 16148, Counsel for Appellee Integra National Bank, Sucessor to McDowell National Bank. William F. Pineo, 764 Park Drive, P.O. Box 598, Meadville, Pa. 16335, Counsel for Chapter 7 Trustee, For McCartney. JUDGES: BEFORE: STAPLETON and NYGAARD, CIRCUIT JUDGES AND MAZZONE, District Judge. , STAPLE1ON, J., concurring. 'The Honorable A. David Mazzone, Senior District Judge for the District of Massachusetts sitting by des- ignation. OPINIONBY: Nygaard OPINION: Nygaard, Circuit Judge: The district court affirmed a bankruptcy court's order denying a motion for summary judgment on an objec- tion debtor-appellant Lamar McCartney filed to Integra National Bank's proof of claim. McCartney argues on appeal that the bankruptcy court erred by not discharging the debt he owes to IOlegra. We will affirm. l. The facts are undisputed. On September 26, 1989, Integra loaned $ 80,000 ['2] to Lamar's Restaurant & Lounge, 1nc., which was guaranteed by the Small Business Administration. As security for the loan, Lamar's granted Integra a first mortgage on Lamar's corporate property. McCartney guaranteed the loan to Lamar's by granting Integra a second mortgage lien on land owned by him individually. In May 1992, McCartney liIed a voluntary petition un- der Chapter 13 of the BaoJauplCy Code. He then liIed a motion to sell Lamar's corporate property. At the conclusion of the sale hearing, McCartney's Amended Plan for Reorganization was adopted as an Interim Plan, pending a status report. The parties and the court agreed at the sale hearing that Integra, acting with the SBA, would put Lamar's corporate property through a sheriffs sale to determine what deficiency, if any, McCartney, as guarantor of Lamar's loan, owed to Integra. Fearing that the sheriffs sale would not occur Until after the bar elate in McCartney's bankruptcy proceed- ing, Integra filed Proof of Claim No. 6 in the amount of$ 38,564.66 against McCartney's individual property pledged as collateral for Lamar's loan. The state court subsequently sold Lamar's corporate property. 1ntegra purchased Lamar's corporate ['3] property at the sale for costs and taxes. Integra then resold the property and agreed to modify its proof of claim to show a deficiency of $ 29,638.14 plus interest and attorney's fees. Almost leo months later, McCartney Iiled an objec- tion to Integra's proof of claim. asserting that Integra's claim on Lamar's underlying debt was satisfied as a 1997 U.S. App, LEXIS 2199, "3 Page 4 mallcr of law bccau5e lmegra failed to file a petition tn fix the fair market value of the property within six months of the sheriff's sale as required under the Pennsylvania Deficiency Judgment Act. 42 Pa.C.S.A, ~ 8103. Both parties filed cross-motions for summary judgment. which the bankruptcy conn denied. n I nl On April 12. 1994. the bankruptcy coun heard argument on the valuation of Lamar's property sold at the sheriffs sale. On May 3. 1994. the court de- termined tlIat the value of the Lamar's property was $ 20.000 and directed Integra to recalculate its defi- ciency claim based on this value. On July 20, 1994, the bankruptcy conn converted the Debtor's Chapter 13 case to a Chapter 7 case. Since then, the Chapter 7 Trustee bas sold some of McCartney's other prop- erty and applied the net proceeds to the debt owed to Integra. As a result, it appears that the balance due Integra bas been reduced to $ 4,379.88 plus interest and additional attorney's fees. ["41 11. On appeal. McCartney assens that the bankruptcy co un erred by concluding that the automatic stay pro- vision of the Bankruptcy Code, 11 U.S. C. ~ 362, pre- cluded Integra from complying with the requirements of the DJA. More specifically, McCartney maintains that the automatic stay applies only to actions commenced against McCartney himself. and therefore, the stay im- posed in his bankruptcy did not prevent Integra from seeking a deficiency judgment against Lamar's within the time permitted under the DJA, Since Integra failed to file a petition in state conn to fix the fair market value of Lamar's corporate property within six months of the sheriffs sale, McCartney argues, Integra's claim against Lamar's is deemed released and satisfied as a matter of law. As a consequence, McCartney contends that he, as guarantor, is also discharged from any deficiency re- maining on Integra's loan to Lamar's. Thus, McCartney concludes. Proof of Claim No.6 filed by Integra in his bankruptcy should be stricken, ill. Under Pennsylvania law. every judgment creditor who forces real estate to be sold in an execution sale must comply with the DJA to protect its claim to any unpaid balance remaining ['51 after the sale, 42 Pa.C,S.A. ~ 8103, Under the DJA, the judgment creditor has six montlls after the debtor's collateral is sold in which to petition the court to fix the fair market value of the real property, 42 Pa,C.S,A, ~ 5522(b), Failure to file a petition witllin this time period "creates an irrebuttable presumption that tlle creditor was paid in full in kind. . Il1l1ey Trust Co, of Palmyra v, Lapitsky. 339 Pa. Super. 177, 488 A,2d 608, 611 (ib. Super. Ct. 1985). This presumption serves to diSCharge all parties either directly or indirectly liable to the judgment creditor for pay- ment of tlle debt, including guarantors. 42 Pa.C.S.A. ~ 8103(d); see also Commonwealth Bank and Trost Co. v. Hemsley, 395 ib. Super. 447, 577 A.2d 627, 631 (pa. Super, Ct.), alloc, denied, 583 A.2d 793 (ib, 1990). Significantly, to comply with the requirements of the DJA, the judgment credilor must either (I) name in the petition, or (2) give notice to, any "debtor, obligor, guar_ antor, mortgagor, and any other person directly or indi- rectly liable to the judgment creditor for the payment of the debt.' 42 Pa.C.S.A. 0 8103(b). Default on this no- tice requirement discharges all personal liability to the judgment creditor for parties neither ['6J served with notice nor named in the petition. Id. II is undisputed that Integra bas never filed a petition in slate coun to fix the fair market value of Lamar's propeny sold at the sheriffs sale. Under normal cir- cumstances, failing to file a petition would discharge whatever remaining debt Lamar's owed 10 Integra. Moreover, Integra's failure to meet the statutory re- quirements of the DJA would also normally discharge McCartney's gw~rantee of Lamar's debt because, as a matter of law, there is no underlying debt owing to Integra. This case, bowever, does not present a nonna! situation where the DJA can be applied by its literal terms. As the bankruptcy coun rightly noted, when McCartney filed for bankruptcy, the automatic stay provision of 11 U.S. C, 0 362(a) was triggered and effectively pre- cluded Integra from state conn actions of any type against McCartney. Consequently, McCartney cannot use Integra's failure to comply with the DJA to avoid the proof of claim Integra filed against him, Section 362(a) of the Code operates to stay ... (I) the cOlllDlencement or continuation, including the issuance or employment of process, of ajudicial, admin- istrative, or ["7] 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 re- cover a claim against the debtor that arose before the commencement of the case under this title. . . . II U,S,c. p62(a)(1)(1996), The automatic stay serves several purposes, The stay gives a debtor a breathing spell from creditors by stopping all collection efforts 1997 U.S. App, LEXIS 2199, '7 Page 5 and all foreclosure actions. Maritime E/ec. Co.. Inc, v. United Jersry Bank, 959 F.2d 1/94, 1204 (3d Clr, 1991) (cilation omiued), In this respect, the SlaY per- nuts the deblOr to attempt a repayment or reorganization plan; or it simply relieves the debtor of the financial pressures that drove bim into bankruptcy. Id. at 1204, The SlaY also protects creditors by preventing particu- lar creditors from acting unilaterally to obtain payment from a debtor to the detriment of other creditors. [d, (cilation omitted), Although the scope of the automatic SlaY is broad, the clear language of section 362(a) Slays actions only against a 'debtor.' Id, (citing Association Of St. Croix Condominium Owners v, St. Croix Hotel Corp" 682 F.2d 446, 448 (3d Clr. 1982)). ('SI As a consequence, 'it is universally acknowledged that an automatic Slay of proceedings accorded by g 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the. . . debtor,' 959 F.2d 1194 at 1205 (quoting Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-97 (6th Clr, 1983)); see also United States v. Dos Cab= Corp" 995 F.2d 1486, 1491-93 (9th Clr. 1993) (hold- ing that Slay does not preclude government from pursu- ing deficiency judgment against nondebtor cosignors of promissory note); Croyden Associates v. Alleco, Inc.. 969 F.2d 675, 677 (8th Clr. 1992) (refusing to extend stay to claims against solvent codefendants), cen. de- nied sub nom, Harry and Jeanette V>l!/nberg FowuJation, Inc, v, Croyden Associates, 507 U.S, 908, 122 L. Ed. 2d 650, 113 S. Ct. 1251 (1993); Credit Alliance Corp. v. Williams, 851 F.2d 119, 121-22 (4th Clr. 1988) (en- forcing a default judgment entered against a nondebtor guarantor of a note during the pendency of the corpo- rate obligor's bankruptcy). As one court has reasoned, a primary rationale for refusing to extend the automatic stay to nonbankrupt third parties is to insure that credi- tors obtain ('9] 'the protection they sought and received when they required a third party to guaranty the debt. ' Credit Alliance, 851 F.2d at 121; accord In re F.T.L" Inc, , /52 Bankr. 61, 63 (Bankr. E. D, lb. 1993). This prohibition, however, has been liberalized in a number of cases where couns have applied the automatic Slay protection to nondebtor third parties. Relying on A,H, Robins Co., Inc. v. Picclnln, 788 F.2d 994, 999 (4th Cir,), cert, denied, 479 U.S, 876, 93 L. Ed. 2d 177, 107 S, Ct. 251 (/986), these courts have extended the automatic Slay to noobankrupt codefendants in 'unusual circumstances,' As the case law demonstrates, courts have found 'unusual circumstances' where "there is such identity between the debtor and the third-party defendant that the deblOr may be said to be the real party defendant and that ajudgment against the third-party defendant will in effect be a judgment or finding against the debtor.' 788 F.2d at 999 (relying on both the automatic Slay pro. vision and the bankruptcy court's equilable powers un- der II U.S. C. ~ 105 to enjoin actions against nondeblor codefendants in the Dalkon Shield products liability lit. igation because of the potential impact on the eslate and the availability ['IOJ of insurance proceeds to satisfy the claims); see also, In re American Film Techn%gles, Inc., 175 Bankr, 847, 855 (Bankr, D. Del. 1994) (Slay- ing prosecution of wrongful discharge claims against for- mer and present directors of debtor corporation because of debtor's indemnification obligations and its possible exposure to collateral estoppel prejndice); In re Rlmily Health Services, Inc., 105 Bankr. 937, 942-43 (Bankr. C. D. Cal. 1989) (slaying collection actions against nondebtor members of debtor HMO because judgments against nondebtors wonld trigger claims for indemnifi- cation from the debtor HMO). Courts have also extended the Slay to nondebtor third parties where Slay protection is essential to the debler's efforts of reorganization. See, e.g" In re La:azrus Burman Associates, 161 Bankr. 891, 899-900 (Bankr. E. D, N. Y. 1993) (enjoining guaranty actions against nondebtor principals of debtor partnerships because principals were the only persons who could effectively formulate, fund, and carry ont debtors' plans of reorga- nization); In re Steven P. Nelson, 140 Bankr. 814, 816- 17 (Bankr. M. D. Fla. 1992) (enjoining actions against nondebtor guarantor of debtor ('11] corporation's obli- gations where guarantor was president of debtor and president's services, expertise and attention were essen- tialto the reorganization of the debtor); see also, Paul H. Deutch, Expanding The Automatic Slay: Protecting Nondebtors [n Single Asset Bankruptcies, 2 Am. BanIa: Inst. L. Rev. 453 (1994). Here, McCartney argues that the automatic stay only applied to him in his individual capacity, nOI to Lamar's. As such, he maintains that Integra was not slayed from pursuing a deficiency judgment in Slate court against Lamar's, as required under the DJA.Inresponse, Integra concedes that under normal circumstances the automatic SlaY docs not preclude creditors from pursuing their right to payment from nondeblor third parties. Indeed, Integra nOllis that, acting in compliance with this gen- eral rule, it pursued Lamar's to foreclosure and sheriffs sale, However, Integra asserts that it could not have pro- ceeded any funher against Lamar's to obtain a deficiency judgment because it would have been required under the terms of the DJA to name McCartney as a respondent in the petition and thereby violate the automatic Slay pro- tecting him. The bankruptcy conn found Integra's ['121 1997 U.S. App. LEXIS 2199.012 Pagc 6 argumelll to b<: persuasive and reasoned that permitting Imegra 10 name McCanney in a deficiency judgmcnt ac. tion in state coun at the same time thaI his bankruplcy case was pending would defeat the purpose of ~ 362 to . centralize all prebankruptcy civil claims against a debtor in the bankruplcy court. In re McConney. 165 Bankr. 18, 21 (Bankr, IV, D, PrJ, 1994). We agree. It is undisputed thaI, had Inlegra sought a deficiency judgment against Lamar'5, it would have been required under the DJA 10 name McCanney as a re5pondeol in ils petition or risk discharging him as loan guaranlor. II is also undisputed that, had Integra named McCanney as a respondent in a deficiency action against Lamar's, it would have clearly violated the au- tomatic stay in place in his bankruptcy. Moreovcr, it is clear that following the sheriff's sale, Lamar's, as a cor- porate entity, no longer had any assets. Consequently, McCanney, as guarantor, would have been liable for satisfying any deficiency judgment claim as5ened by Integra. Simply stated, there was no way for Integra to pursue a deficiency judgment action against Lamar's and to protect its rigbt to satisfaction of Lamar's debt without involving [013] McCanney in the process. Given McCartney's necessary participation in any de- ficiency judgment action initiated by Integra against Lamar's in state court, we find that the bankruptcy court properly concluded that the automatic stay extended to enjoin Integra from complying with the requiremcnts of the DJA. This case falls squarely under the "un- usual circumstances" exception as developed in A.H. Robins and its progeny: any deficiency judgment re- covery from Lamar's would have necessarily impacll:d upon McCartney's estate. Indeed, because McCartney, as guarantor, was secondarily liable for any deliciency entered against Lamar's, and Lamar's, following the foreclosure and sheriff's sale, had no assets, McCartney would have been the real pany defendant in a dclicieocy judgment action by Integra against Lamar's. Any deli. ciency judgment enll:red against Lamar's would havc op- eraled as a judgment or linding against hinJ; an outcome clearly in tension with the purposes of the automatic Stay, Accordingly, Integra was stayed from pursuing a deficiency judgment action against the nondebtor third pany Lamar's because McCanney was, in essence, the real pany in inlerest. IV, Assuming, arguendo. ['14) that the aUlomatic stay precluded Inlegra from pursuing a deficiency judgment action in stale coun, McCanney assens that Integra should have sought relief from the automatic stay to allow illo name both Lamar's and McCanney in a defi- ciency judgment petition, This same argument was con- sidered and rejecled in In re Wil/dllS. ISO Bankr. 127 (Bankr. M. D, PrJ. 1992), an opinion we find instruc- tive, In Wilkins, the creditor sought relief from an auto. matic stay to commence a deficiency judgment action under the DJA against both the debtor and nondebtor obligors. The coun denied the creditor's motion for two primary reasons. First, the court held that II U.S. C. ~ 100(c) specifically extends the six-month limitation pe- riod for deficiency judgment actions under 42 Pa,C.S,A. ~ 5522(b). 02 Id, at 128, Thus, conlrary to the cred- itor's argument, the Wilkins court found no urgency that the debtor's Obligation to the creditor would be dis- charged unless the credilor received relief from stay and filed a deliciency petition within the six month limitation period. Second, the court nOll:d that the deliciency is- sues were likely to be settled in the bankruptcy court and consequently, ['15] there was no reason for the debtor to defend litigation in state court that could be settled in the bankruptcy forum. Id. at 128-29. In this re- spect, the court expressed its concern that the deblOr nOI be "burdened by litigation and resulting legal fees if unnecessary at this time. " Id. 0//29. n3 n2 Section 108(c) of the Bankruptcy Code reads, in pertinent pan: If applicable nonbankruptcy law. . . lixes a pe- riod for commencing or continuing a civil action in a coun other than a bankruptcy court on a claim againsl the debtor,. . . and such period bas not expired before the dall: of the filing of the petition, then such period does not expire nntil the lall:r of- (I) the end of such period, including any suspension of such period occurring on or after the commence- ment of the case; or (2) 30 days after notice of the termination or expira- lion of the stay under section 362, , . with respect to such claim. n3 The court also held that the creditor must com- mence a deficiency judgment action against the non- debtor obligors within the six-month limitation pe- riod permiued by state law. Wilkins, 150 Bankr. at 128. Significantly, however, the court expressly noted thaI permitting the creditor to proceed against the nondebtor obligors would have no impact upon the deblor's deficiency liability, and that the assets of the nondeblors could be collecled without risk of dis- charging the debtor pursuant 10 tbe DJA, Id. Thus, 1997 U,S. App. LEXIS 2199, .15 Page 7 unJik~ th~ pr~senl cas~, the Wilkins coun found no "unusual circumslJlDces" that would warrant extend- ing the automalic stay to the oondebtor obligors. [.16/ We agr~e with the Wilkins coun that debtors should nOl b~ burdened by Stal~ coun litigation when deficiency judgment actions impacting upon !he debtor's estate can be 5elll~d in the bankruptcy forum, Indeed, to per- mit state coun deficiency judgment actions involving the debtor to proceed wben !hey can be adjudicated in the bankruptcy coun is to do violence to the purposes of the automatic stay. As discussed earlier, by central- izing all prebankrupu:y civil claims against a debtor in !he bankrupu:y coun, the debtor is granted a "breath- ing spell" during whicb be is relieved of the financial pressures that drove him to bankruptcy. Maritime, 959 F. 2d at 1204. The centralization of all claims in the bankruptcy coun also permits the assets of the debtor's estate to be marshaled for distribution to creditors in an orderly and equitable fasb.ion. Id. (citation omit- ted). These benefits of !he automatic stay could not be achieved if creditors are permitted relief from stay to pursue state coun deficiency judgment actions impact- ing on the estate of the debtor. Debtors would be forced to expend valuable time, energy and resources defending against stare coun litigation that [.17] could be settled directly in the bankruptcy coun. n4 n4 We note also that considerations of judicial economy weigh against granting creditors relief from stay to pursue stare coun deficiency judgment actions that impact upon the estate of the debtor and could be 5ellled in the bankruptcy coun. Indeed, the time, energy and resources of the courts are no less valu- able commodities to presclVe wben it is possible to litigate a claim in one forum instead of two. Moreover, we fail to see how McCanney was harmed by [nlegra's failure to seek relief from the automatic stay. As the record clearly demonstrates, tbe bankruptcy coun held a valuation hearing and heard argument concerning the fair market value of Lamar's propeny sold at the sheriffs sale, The coun subsequently entered an order finding the value of Lamar's propeny to be $ 20,000 and directing Integra to recalculate its deficiency claim based on that value, Thus, the bankrupu:y coun af- forded McCanney an opponunity to present evidence and testimony [.18] at a bearing specifically convened to determine the fair market value of the prcperty sold at the sheriffs sale, This is precisely the same opportunity to b~ beard that McCanney would have been granred in a state coun deficiency judgment action commenced under the DJA. See 42 Pa.C.S.A. g 8103(c)(4). [n ad- dition, the bankruptcy coun's determination of the fair market value of the Lamar's property resulted in a de. crease in the deficiency claim owing to Integra, fur- ther demonstrating that McCanney was not harmed by Integra's failure to seek relief from the stay. Insofar as McCanney would have us find that he was prejudiced by his inability fully to escape liability for his guaranty, as may have been possible under the DJA, we decline to do so. We will not transmogrify the DJA into a means for guarantors to escape liability from their guaranties. oS Accordingly, we conclude that none of McCartney's subSlJlDtive rights were prejudiced by Inregra's failure to seek relief from the automatic stay. oS See Fidelity Bank, N.A, v. Bowger, 444 lb. Super. 52, 663 A.2d 2I 3, 214 (lb. Super. Ct. 1995), alloc. denied, 670 A.2d 142 (lb. 1996), holding that the purpose of the Deficiency Judgment Act is to relieve a debtor of funber personal liability to the creditor, if the real property taken by the creditor on an execution has a "fair market value", [sic] as of the date of the execution sale, sufficient so that the creditor may dispose of the property to others (or even, sometimes, use it himself) without a net loss to the creditor[.] (citations and internal quotations omitted) (emphasis added). [.19] V. In b.is final argument, McCanney asserts that the bankrupu:y coun erred by holding that lJ U.S. C. ~ 108(c) operated to suspend the limitations period for initiating a deficiency judgment action in state coun pursuant to the DJA. Because we have already deter- mined that Integra was stayed from pursuing a deficiency judgment action in state co un against either Lamar's or McCarmey, we need nOl decide this issue. Nonetheless, we note parenthetically that the Pennsylvania Superior Coun has unequivocally held that, under lJ U.S.C. g 108(c)(2), the six month limitation period for the filing of a deficiency petition pursuant to the DJA does not expire until thirty days after notice of the termination of the automatic stay, Citizens National Bank of Evans City v, Gold, 439 fu, Super. 254, 653 A.2d 1245, 1247-48 (lb. Super, 0, 1995) (citing Wilkins); accord In re C.K. Smith. 192 Bankr. 397, 399-400 (Bankr. II( D. 1997 U.S. App, LEXIS 2199, 019 Page 8 ftl. 1996). VI. [n summary, we are satisfied that [ntegra took all the steps legally possible to protect its rights to a deficiency claim against McCartney as guarantor of Lamar's debt. Integra filed a proof of claim in McCartney's bankruptcy proceeding and pursued Lamar's to foreclosure r020) and sheriffs sale. Since any other action to collect on the deficiency would have necessarily involved McCartney, Integra could not proceed further without either violat- ing the automatic stay or sacrificing its deficiency claim against McCartney as guarantor of Lamar's debt, We conclude that Integra was stayed from initiating a defi- ciency jUdgment action against Lamar's and McCartney in stale court. Accordingly, we will affirm the order of the district court. CONCURBY: STAPLETON CONCUR: STAPLETON, J., concurring. McCartney argues that the DJA released his guaranty obligation 10 Integra when the bank failed 10 institute a deficiency proceeding naming him as a guarantor within six months of its purchase of the propeny at the execu- tion sale. This is an untenable position. The automatic stay provision of the Bankruptcy Code, 1 I U.S. C. ~ 362, clearly would be undermined hy the enforcement in this situation of that ponion of the DJA releasing a guarantor who is not so named. 42 Pa. C.S.A. ~ 8I03(b), If the coun were willing 10 rest its decision on this ground, I would join without comment, The court says a great deal more, however, and I am, accordingly, unable to join in its opinion. [0211 [I is unnecessary for the court to address the issue of whether the DJA in this siruation bas the effect of releasing Lamar's Restaurant & Lounge's ohligation to Integra. Accordingly, I would not address that issue. Were it necessary for the conn to address it, bowever, I would find no justification for concluding, as does the coun, that the automatic stay provision deprives a pri- mary obligor not in bankruptcy of the benefit that the DJA imended it to have. There are simply no .unusual circumstances. warranting an exception from the general rule that ~ 362 applies only to a debtor in bankruptcy. The court's conclusion to the contrary, while it makes no difference here, is likely to lead to mischief in the context of other cases, As the court persuasively demonstrates, there can be no question that giving full effect to the DJA would under- cut the objective of the automatic stay of ~ 362. There is thus a conflict here between state law and bankruptcy law Ulat must be resolved, Under the Supremacy Clause, in cases of irreconcilable conflict, state law must give way. 11Us does not, however, give a court an unlimiled license to decline enforcement of state rules of decision. ["22) The coun mUSI look for the accommodation whicb will secure the Objective of the bankruptcy law and, at the same lime, imrude least on the objective or objectives underlying the stare law rule. The accommodation that this approach counsels here requires the following conclusions: (a) The Objective of ~ 362 can be secured by holding unenforceable that ponion of the DJA which requires the creditor to join the bankrupt guarantor in the DJA proceeding upon pain of losing his claim against the bankrupt guarantor. It would necessarily follow that the bankrupt guaranlor would not be bound by the de- ficiency detennination unless be cbose, with court ap- proval, to participate. It also follows that the bankrupt guarantor can be pursued in bankruptcy court during the period specified in ~ I08(c) of the Bankruptcy' Code, even thougb the creditor may not be successful if the claim has been discharged for some reason other than this ponion of the DJA. (b) There is nothing inconsistent between ~ 362 and that ponion of the DJA that requires an executing cred- itor to file a deficiency proceeding against the primary debtor in order to preserve his claim against the pri- mary debtor. [023] Giving effect to this ponion of the DJA would be consislent with the rationale of Maritime Electric Co. Yo U.S. Jersey Bank, 959 F.2d JJ94 (3d Cfr. 1991). Moreover, as I have noted, I find nothing in the Code that would justify depriving the primary debtor of the protection of the DJA. The difference between these conclusioDS and those reached by the conn is not material here because McCartney argues only that he was released under the terms of the DJA. He does not argue that he was released by the effect whicb Pennsylvania law accords an instru- ment having the terms of his note. n6 The difference between my conclusions and those of the conn would be important, bowever, if it appeared that Pennsylvania follows the generally accepted rules regarding the effect on a guarantor of releasing the primary debtor and if the plaintiff were relying on that law. n6 The appendix does not contain what McCartney refers to as his note of guaranty, and be cites no Pennsylvania case law on wbether and under what circumstances release of the primary obligor releases a guarantor or surety, etc. "". G:.> ~, ,- ~-;: t....: s:: 'I ('oJ .""':) :< (.J !-:) -, ~,;: ':_,J ," (0" !'J.. ,. ., ; :::; , " '- ",..'. ,-. _C' (i) ~--,' . ". N :11~ :"::i c;-. _J ;. :::J --, (') ,.. :::J " 0'\ () ,- ;- n.: C ! - I::: . r '~ -" ) " l', ) , , . ,. .' , , '- , , , i , - U. , I , ~': .' . ;" , , 'o. , ',] f. e' : , (l. ,-, L (:", ; (j l)) c; o 1JJ ~ o ~ ~ i'; ;J: :.: 7. ~ ~ ::: 0( M..J ... ~ I-( 'J;:-l , ~ ~ ~ ~ ;.. :: z , ::.: = ~ '"" Z f-o ;:'" M = ::.J _ ::: 0 ~ .! ..:l t:: "j:: o < 5 ::: ~ ~ 3 lll:t.U'rIIn!Tnur.oN ANSWER TO MOTION mR 51'J:t'tAI. RCI,Il:flSrl'TlJ.tntM \U. 1'J'N"lIS~ II 6, Admitted in part and denied in part. It is admitted that Plaintiff's counsel contacted Defendant's counsel and informed counsel that he did not agree that the above-referenced action was stayed. The stay is efleetive for a non-named defendant. not the named Defendant in this action. 7. Admitted, 8. Denied. Paragraph 8 is a legal conclusion to which no response is required. 9, Denied. This averment is also a legal conclusion and the interpretation of Judge Rambo's decision as it relates to this case is a legal conclusion and therefore the averment is denied. 10. Denied, This paragraph is a legal conclusion to which no response is required. Plaintiff docs not bclieve it has violated any automatic stay provisions of the United States Bankruptcy Code since the case is against James Hutchison. tla Hutch Construction and not Hutch Construction, Inc" who filed bankruptcy. II. Denied. Plaintiff is without knowledge suflieient to form a belief as to how James Hutchison will be severely prejudiced if this Honorablc Court docs not slay this action. If Defendant is correct in his answer to the Complaint, (hen PlaintifTwillnot be able to obtain judgmcnt against Dcfcndant on thc case, Ifthc arbitrators determinc that Plaintiff is correct, howcvcr. thcn the actual dcfendant in this case is thc named Defendant and not Hutch Construction, Inc.. as allcgcd by Dcfcndant. 12. Denied. Plaintiff will be prejudiced if this mattcr is continued bccausc Plaintiff has a claim against .Iamcs Hutchinson. tla Hutch Construction and not Hutch Construction, Inc, 2 .\) ,)..."', ..... ," 0- ~~ 0: l"~ .. -P ' ,., u..:("? ..:::: (J .: ~ ..-.r . ~t. :. L.,. ..... Ci'; ('! \ V .I" '-, 1 \.;..,. ~-", . ( LL..., r u. r'" c~ <.., :,J ~ ~ ~ fJl 0 ~ ~ ~ ~ .. :S " " z (Q j ~ ~ .. ~ " -' ...i i' >- ~ >- :: ~ ~ OJ ~ g OJ C<l '" ~ 0 0 .j .. " ~ " g 0 0 '" 0 ~ '" ~ "