The Splits from page 19
However, in the Archdiocese of Santa Fe, the Bankruptcy Court for the District of New Mexico came to the opposite conclusion. A person who claimed to have been wrongly included by the Archdiocese in a list of persons credibly accused of sexual abuse sued prepetition to have his name removed from this list. After bankruptcy was filed, the party filed a proof of claim and filed a motion asking the bankruptcy court for equitable relief to have his name removed from the list. The court agreed with the minority view and found this motion to violate the automatic stay for three reasons. First, it found the language of Section 362 to be clear in prohibiting the commencement of a judicial action that“ could have been commenced prepetition” which was prohibited“ regardless of the forum.” Archdiocese of Santa Fe, 627 B. R. at 922. Second, it disagreed with the majority’ s view that a broader interpretation of Section 362 would lead to“ absurd results” in requiring relief from the stay to be obtained to file proofs of claim or non-dischargeability actions, noting that“ those actions arise under the Bankruptcy Code and could not have been brought prepetition” taking them out of the plain language of Section 362. Id.( emphasis in original). Finally, the court explained that suing the debtor is not equivalent to filing a proof of claim with respect to the action required of the debtor, noting that the procedure on a proof of claim is within the control of the debtor who decides when and whether to object rather than being forced to respond to a suit. Id. In so deciding, the court instructed the party to file a relief from stay motion first to be able to commence an action to remove his name from the list. Id. at 923.
The minority view takes a strict reading of Section 362 despite the effects on the home bankruptcy case while the majority view looks at the purposes of Section 362 and the impact of the extension of the automatic stay to proceedings brought in the home bankruptcy courts to come to a practical result. There also appears to be differing views when equitable remedies are sought rather than legal remedies more in line with the claims process in bankruptcy. The positions on both sides have been well articulated, and the differing facts impactful, so it remains for more Circuits to weigh in to see whether the majority view continues to hold sway.
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