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Assoc. of St. Croix Condominium Owners v. St. Croix Hotel Corp.

July 6, 1982; As Amended July 9, 1982.

ASSOC. OF ST. CROIX CONDOMINIUM OWNERS
v.
ST. CROIX HOTEL CORP.; ASSOC. OF ST. CROIX CONDOMINIUM OWNERS V. THE ST. CROIX HOTEL CORP. ST. CROIX HOTEL CORPORATION, APPELLANT; ASSOC. OF ST. CROIX CONDOMINIUM OWNERS V. ST. CROIX HOTEL CORP.; ASSOC. OF ST. CROIX CONDOMINIUM OWNERS V. THE ST. CROIX HOTEL CORP. ASSOCIATION OF ST. CROIX CONDOMINIUM OWNERS, APPELLANT



APPEAL FROM THE DISTRICT COURT OF THE VIRGIN ISLANDS, DIVISION OF ST. CROIX

Author: Garth

Before: GARTH, ROSENN and HIGGINBOTHAM, Circuit Judges

Opinion OF THE COURT

GARTH, Circuit Judge.

This is an appeal from a final order of the district court affirming in part, and vacating and remanding in part, the judgment of the Virgin Islands Territorial Court. In an action on a lease by the Association of St. Croix Condominium Owners (the Association), the Territorial Court awarded the Association $2,147.31 in past due rent and water charges and ordered the eviction of St. Croix Hotel Corp. for its failure to comply with its obligation to maintain the leasehold premises. The Territorial Court, however, awarded the Hotel $1,800 on its counterclaim. After both parties made applications for attorneys' fees and costs, the Territorial Court awarded the Association $1,545.00 in fees and costs, but did not make an award to the Hotel.

On appeal, the District Court of the Virgin Islands vacated the order of eviction and remanded the question of the Hotel's continued possession for a determination as to whether the Hotel had remedied the breach of its maintenance obligation prior to judgment, so as to come within the protective provision of V.I. Code Ann. tit. 28, § 292(a).*fn1 In addition, since the Territorial Court did not set forth its reasons for denying attorney's fees to the Hotel, although the Hotel had prevailed on its counterclaim, see V.I. Code Ann. tit. 5, § 541(b), the District Court remanded that question for an articulation by the Territorial Court. Both parties then appealed to this court.

When the briefs of the parties were filed with this court, it was revealed in one brief that a petition for reorganization under chapter 11 of the Bankruptcy Code had been filed by the Hotel. There was no other mention of the bankruptcy proceedings in the record. We requested supplementary memoranda on the effect of the bankruptcy proceeding on the instant action, particularly in light of the automatic stay provision of section 362 of the Bankruptcy Code, 11 U.S.C. § 362 (Supp. II 1978). Such memoranda were filed by counsel. After reviewing the memoranda it remained unclear whether the bankruptcy judge had entered an order granting relief from any automatic stay that might have gone into effect pursuant to section 362. Upon inquiry to counsel, we were informed that no order of the Bankruptcy Court appears in the record.

Section 362 provides:

Automatic stay

(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of --

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other 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 the debtor that arose before the commencement of the case under this title.

11 U.S.C. § 362 (Supp. II 1978) (emphasis added). Section 362(d) provides that upon request of "a party in interest" the court can grant relief from the stay after notice and a hearing. Id. § 362(d).

In explaining the purpose of the automatic stay, the House Report accompanying the Bankruptcy Reform Act of 1978 states:

The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan or ...


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