Order entered November 5, 2013
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-12-00595-CV
BILLY SCHOPPE AND CANDACE SCHOPPE, Appellants
V.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR MORGAN
STANLEY LOAN TRUST 2005-7 AND WELLS FARGO BANK, N.A., Appellees
On Appeal from the 192nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-09-10731
ORDER
Before the Court is appellants Billy Schoppe and Candance Schoppe’s October 9, 2013
document entitled “Appellants’ Filing of Order Confirming Chapter 13 Plan” (appellants’ filing),
Billy Schoppe’s October 17, 2013 notice of bankruptcy filing, and appellees’ Deutsche Bank
National Trust Company as Trustee for Morgan Stanley Loan Trust 2005-7 and Wells Fargo
Bank, N.A., October 25, 2013 response to the Schoppes’ filing of the order confirming a Chapter
13 plan.
The record reflects the final judgment was signed by the trial judge on April 26, 2012.
The notice of appeal was filed on May 4, 2012. The clerk’s record was filed on June 26, 2012.
The Schoppes’ brief was filed on July 26, 2012. Wells Fargo filed its brief on September 26,
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2012 and Deutsche Bank filed its brief on November 1, 2012. In addition, the parties have filed
motions seeking extensions of time, on which this Court ruled, and a supplemental clerk’s record
was filed.
This Court heard oral argument of this appeal on October 8, 2013. During rebuttal at the
oral argument, counsel for the Schoppes represented to and advised this Court, for the first time,
that Billy Schoppe had filed for Chapter 13 bankruptcy after the final judgment in this case was
signed. Counsel for the Schoppes also represented that a Chapter 13 plan was confirmed while
this appeal was pending, the plan addressed the status of this case, including the Schoppes
obligations to Deutsche Bank and Wells Fargo, and the confirmed plan granted relief from the
automatic stay permitting this appeal to proceed. In response to inquiry by this Court, counsel
for the Schoppes represented there had been no notice of the bankruptcy sent to this Court prior
to this statement at oral submission. In addition, counsel for Deutsche Bank and Wells Fargo
stated they had no personal knowledge of the bankruptcy proceedings.
On October 9, 2013, the Schoppes filed appellants’ filing. Attached to appellants’ filing
was a certified copy of the order confirming the Chapter 13 plan. The Schoppes directed this
Court to the following language in the certified plan to support their claim that this appeal may
proceed:
The Debtor is currently in litigation with the lender secured by his home.
Notwithstanding any other provision of this plan, and because of this dispute, this
plan does not propose that the Debtor make monthly direct payments to Deutsche
Bank/Americas Servicing during the pendency of the litigation.
The Schoppes also argued in appellants’ filing, in the alternative, that the automatic stay does not
apply to this appeal because it does not reach causes of action prosecuted by a borrower pursuant
to In re U.S. Abatement, 39 F.3d 563, 568 (5th Cir. 1994).
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On October 16, 2013, this Court noted that appellants’ filing and the attached confirmed
plan did not satisfy the notice requirement of Texas Rule of Appellate Procedure 8.1 and the
quoted language in the confirmed plan did not contain a clear statement indicating that “the
bankruptcy court has lifted or terminated the stay.” See TEX. R. APP. P. 8.1, 8.3. As a result, this
Court ordered the Schoppes to file a notice of bankruptcy in compliance with Texas Rule of
Appellate Procedure 8.1. Also, this Court ordered Deutsche Bank and Wells Fargo to file a
response to appellants’ filing.
On October 17, 2013, in compliance with this Court’s order, Billy Schoppe filed his
notice of bankruptcy. The bankruptcy proceeding is styled “In re Billy Wayland Schoppe, ” case
no. 12-41768, and is before the United States Bankruptcy Court for the Eastern District of Texas,
Sherman Division. Billy Schoppe’s petition for Chapter 13 bankruptcy was filed on July 2,
2012. Only the notice of appeal, docketing statement, and clerk’s record were filed before Billy
Schoppe filed his petition for Chapter 13 bankruptcy.
On October 25, 2013, Deutsche Bank and Wells Fargo filed their response to appellants’
filing of the order confirming the Chapter 13 plan. In that response, they argue the automatic
stay is measured by the posture of the parties at trial and applies to this case because Billy
Schoppe has appealed Deutsche Bank’s judgment on its counterclaim. They request this Court
to require Billy Schoppe to obtain relief from the automatic bankruptcy stay before this appeal
proceeds further.
This Court is concerned that counsel for the Schoppes, long after the notice of appeal was
filed, notified this Court for the first time at oral submission that a bankruptcy proceeding had
been filed by Billy Schoppe. The failure of counsel for the Schoppes to timely notify this Court
of the bankruptcy proceeding has resulted in the waste of valuable time of the litigants and this
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Court. At this time, this Court RESERVES consideration of counsel for the Schoppes’ action in
failing to follow the law and rules as to timely notification of the bankruptcy and the effect on
the parties, this case, and this Court.
This Court REMOVES this case from submission.
Pursuant to 11 U.S.C. § 362, further action in this cause is automatically stayed. See
TEX. R. APP. P. 8.2. Accordingly, for administrative purposes, this cause is ABATED and will
be treated as a closed case. It may be reinstated on prompt motion by any party showing that the
stay has been lifted and specifying what further action, if any, is required from this Court. See
TEX. R. APP. P. 8.3.
/s/ DOUGLAS S. LANG
JUSTICE
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