Three Underwood Attorneys Named 2021 Texas Rising Stars

The Underwood Law Firm is pleased to announce that Jason Fenton, Stephanie James and Brad Timms have been named 2021 “Texas Rising Stars.” To be honored as a Rising Star, attorneys must be age 40 or younger, or have practiced fewer than 10 years. Rising Star selections are based on nominations from fellow attorneys who previously were honored in the prestigious Texas Super Lawyers list. Only 2.5 percent of the total lawyers in Texas are listed as “Rising Stars.”

Jason Fenton – Jason Fenton practices civil litigation with a focus on commercial disputes, real estate, construction, personal injury defense and banking. In his practice he represents individuals and non-profits, as well as multi-billion dollar companies. Whether in state or federal court, Jason is well-prepared to represent his clients vigorously. Prior to joining the firm, Jason served as a law clerk to the Honorable Ed Kinkeade, United States District Judge, Northern District of Texas.

Stephanie James – Stephanie James’ practice consists of a wide variety of civil litigation, healthcare and employment matters. She represents clients in personal injury litigation, nonsubscriber litigation, healthcare litigation, commercial litigation (including contract disputes and deceptive trade practices claims), construction disputes, employment disputes, and general civil litigation.

Brad Timms – Brad Timms has experience representing a wide range of clients, from individuals and small businesses to large publicly-traded corporations, in a variety of business and commercial cases in state and federal court. His practice focuses on construction, business and insurance litigation. In addition to his litigation practice, Brad also assists clients with preparation of contracts and business-related negotiations. 




Supreme Court Finds Mere Retention of Debtor’s Personal Property Does Not Violate the Automatic Stay

By Roger Cox *

 

The Headline

            The United States Supreme Court recently held that retention of a Debtor’s impounded personal property by the City of Chicago did not constitute a violation of the Automatic Stay found at Section 362 of the Bankruptcy Code.  This should resolve a split among Circuit level court regarding whether a creditor’s mere retention of bankruptcy estate property (in the absence of other, affirmative action) violates the automatic stay.

The Case

City of Chicago v. Fulton, 592 U.S. _____, 141 S.Ct. 585 (2021).

The Facts

            The Fulton case arose from four separate bankruptcy cases.   In each case, the City of Chicago had impounded a Debtor’s vehicle due to unpaid fines for motor vehicle infractions.  Each Debtor filed a voluntary Chapter 13 case, and requested return of the vehicle. 

            The City refused to return the vehicles, and the bankruptcy court sanctioned the City for violating Section 362’s automatic stay.  This was affirmed by the 7th Circuit, which joined an apparent majority of Circuit courts, affectively finding that the City had acted “to exercise control over property of the estate, violating the automatic stay.”  The lower court also referenced Section 542(a) of the Bankruptcy Code, which generally mandates that a person in possession of estate property must deliver such property to the Trustee. 

The Supreme Court’s Disposition

            A unanimous Supreme Court reversed the 7th Circuit.  In Justice Alito’s opinion, the Court reasoned that the Automatic Stay effectively prohibits only “affirmative acts” that would otherwise alter the status quo.  That would not include mere retention of property.  The Court further found that Section 362 and Section 542 do not effectively act in tandem to create an affirmative obligation to turn over estate property.  Note, however, that the Court expressly declined comment on Section 542’s turnover dynamics.

Our Take

            This is an admittedly narrow decision, and it does not address other aspects of Section 362 or 542.  There may be other actions that a creditor takes, for example, while in possession of estate property that could cross the line and constitute an affirmative action to collect a debt.  Therefore, creditors must still exercise due care when faced with this situation.

            On the other hand, this may resolve, at least in the initial phase of a case, the dilemma faced by many creditors under the previous split in Circuit authority.  Arguably, this could allow for some breathing room to address issues like adequate protection and other issues of concern to secured creditors when forced to surrender property back to a debtor.  The possessory mechanic’s lien claimant and others similarly situated may also find at least some short term relief. 

            In our view, however, additional steps to dispose of any property caught up in such a situation may well implicate the Automatic Stay.  Therefore, creditors in such a position are well advised to seek appropriate relief from the bankruptcy court, as quickly as reasonably possible.  This would include at a minimum, seeking relief from the Automatic Stay before taking any further steps to dispose of the property.

 

 

*Roger Cox is the author of Cox’s Texas Creditors Rights Laws Annotated (Thomson Reuters 2019-21), and a former contributor to the SMU Law Review.  He is Board Certified in Business Bankruptcy Law, Commercial Real Estate Law, and Farm & Ranch Real Estate Law by the Texas Board of Legal Specialization.  Underwood has offices in Amarillo, Austin, Fort Worth, Lubbock, and Pampa. This article is for general and academic information only and is not intended as legal advice or as a specific position asserted on behalf of any existing or future client of the firm.




Slater Elza Recently Spoke to Members of the Association of Michigan Defense Trial Counsel

Underwood Shareholder Slater C. Elza recently spoke to members of the Association of Michigan Defense Trial Counsel on “Trying Lawsuits with Millennial Jurors and Young Judges”. MDTC is an association of leading lawyers in Michigan dedicated to representing individuals and corporations in civil litigation.

Slater is the current President of the Texas Association of Defense Counsel and also serves as an elected member of the State Bar of Texas’ Litigation Council.




Slater Elza to Speak at the Texas State Bar’s Annual Advanced Evidence and Discovery Continuing Education Seminar

Underwood Shareholder Slater C. Elza has been invited to present his paper “Evidentiary Value and Limitations on Corporate Representative Witnesses” at the Texas State Bar’s Annual Advanced Evidence and Discovery continuing education seminar. The program will be offered virtually in April and live in San Antonio in May. Slater is the current President of the Texas Association of Defense Counsel and the head of Underwood’s Litigation Section.