Coy Cox, Jr. v. Specialty Vehicle Solutions

NOT RECOMMENDED FOR PUBLICATION
File Name: 22a0189n.06

No. 20-5036

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
May 09, 2022
)
COY G. COX, JR., ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF KENTUCKY
SPECIALTY VEHICLE SOLUTIONS LLC, )
)
Defendant-Appellee. )

Before: GUY, CLAY, and WHITE, Circuit Judges.

The court issued a lead opinion joined by GUY, J. CLAY, J. (pg. 13), delivered a separate
opinion concurring in the judgment. WHITE, J. (pp. 14–15), delivered a separate dissenting
opinion.

Plaintiff-Appellant Coy G. Cox, Jr. filed two successive personal-injury actions against

Specialty Vehicle Solutions LLC (SVS), which was in bankruptcy proceedings at the time the first

action was filed. The district court dismissed the first suit as invalidly filed in violation of the

automatic bankruptcy stay and dismissed the second suit—filed more than thirty days after the

bankruptcy court granted relief from the stay—as untimely under the applicable Kentucky statute

of limitations. Cox appealed and we affirmed in part and reversed and remanded in part for the

district court to consider whether the stay relief granted by the bankruptcy court was intended to

apply retroactively to the first suit or be prospective only. The district court once again dismissed

the case, finding that the stay relief was intended to be prospective only. We AFFIRM.
No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

I.

A detailed account of the factual and procedural history of this case can be found in this

panel’s prior opinion. See Cox v. Specialty Vehicle Sols., LLC, 715 F. App’x 443 (6th Cir. 2017).

Thus, we include only an abbreviated summary as relevant to the issues currently on appeal.

Cox was a police officer assigned to an IRS task force. On February 28, 2014, Cox was

conducting surveillance in a specially modified van sold to the IRS by SVS. Cox alleges that a

battery powering the van’s electronic equipment was negligently installed and released toxic liquid

and gaseous chemicals into the van, causing him severe and permanent injuries.

On March 5, 2014, Cox’s attorney wrote to SVS, stating that Cox intended to assert a claim

against SVS related to the February 28 incident. On September 26, 2014, Cox’s attorney and SVS

employees inspected the van.1

On October 20, 2014, SVS filed a Chapter 11 bankruptcy petition in the United States

Bankruptcy Court for the District of New Jersey (No. 14-31329-CMG) without listing Cox as a

creditor. Unaware of SVS’s bankruptcy, Cox sued SVS in Kentucky state court on February 23,

2015, asserting strict liability, negligence, and fraud claims. SVS filed a notice of the automatic

bankruptcy stay on March 18. Cox’s personal-injury attorneys hired Warren Levy, a New Jersey

bankruptcy attorney, to attempt to obtain relief from the bankruptcy stay. Levy filed a motion for

stay relief on Cox’s behalf, requesting that the court issue an order modifying the stay “so as to

enable the [c]reditor to obtain [r]elief.” Cox I, R. 15-1, PID 126. The proposed order attached to

the application requested permission to “institute or resume and prosecute” the Kentucky suit. Id.

at PID 136. Cox’s notice of motion for stay relief, which is a required part of a motion under Rule

1
There is no contemporaneous documentation of the results of the inspection in the record, but a March 9,
2015 email from SVS’s president (sent after receiving notice of Cox’s lawsuit) states that the batteries were intact at
the time of the inspection.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

9013-1 of the District of New Jersey’s Local Bankruptcy Rules, see D.N.J. LBR 9013-1(a),

incorrectly described the Kentucky suit as a “pre-petition action.” Cox I, R. 15-1, PID 123, 136.

SVS’s bankruptcy attorney, Jennifer McEntee, objected to the motion, but indicated that “an

amicable resolution could possibly be reached if [Cox] agreed to limit the relief requested in [his]

proposed order to the extent of the insurance policy.” Cox I, R. 47, PID 377–78. Levy forwarded

the objection to Cox’s personal-injury attorneys, who passed the message along to Cox. Levi

James Daly, one of Cox’s personal-injury attorneys, confirmed that Cox was willing to limit his

recovery to the extent of SVS’s insurance coverage, and notified Levy of Cox’s consent to limit

his recovery in that manner.

Levy and McEntee engaged in discussions regarding relief from the stay. McEntee

conditioned her consent to the stay language that Levy submitted with his motion on the removal

of the term “institute,” thus allowing Cox only to “resume and prosecute” the state civil suit

identified in the proposed order.

The bankruptcy court entered the parties’ agreed order on August 7, 2015. The order states

in relevant part:

it is ORDERED that the automatic stay is vacated to permit [Cox] to resume and
prosecute to conclusion the civil action identified specifically as:

Coy G. Cox, Jr. v. Specialty Vehicle Solutions, LLC,
Civil Action No.: 15-CI-00040, Commonwealth of Kentucky,
Letcher Circuit Court

only to permit [Cox] to seek to liquidate the claims for recovery made against [SVS]
. . . provided . . . that [Cox] shall limit any claim for recovery . . . to the extent of
any available and applicable insurance coverage.

Cox I, R. 10-5, PID 71.

SVS filed a notice of the lifting of the stay in state court on August 13, 2015, and removed

the Kentucky state-court action to the United States District Court for the Eastern District of

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

Kentucky (“Cox I”). SVS then filed a motion to dismiss arguing that notwithstanding the

bankruptcy order lifting the stay, the suit was “null and void” because it was filed in violation of

the bankruptcy stay. Cox I, R. 10, PID 48. Cox then filed a new action against SVS in the Eastern

District of Kentucky on September 11, 2015 (“Cox II”), repeating essentially the same claims.

SVS filed a motion to dismiss Cox II on the ground that the applicable statute of limitations had

run.

The district court dismissed Cox I on the ground that the equitable exception in Easley v.

Pettibone Michigan Corp., 990 F.2d 905 (6th Cir. 1993), did not apply, and the suit was therefore

void as a matter of law because it was filed in violation of the automatic stay; the district court

dismissed Cox II, reasoning that Cox had actual notice of the bankruptcy court’s August 7, 2015

order on the day it was issued and failed to file the complaint within the thirty days allowed. After

filing his claims of appeal, Cox returned to the bankruptcy court asking that court to clarify its

order lifting the automatic stay, but the bankruptcy court declined to do so. On appeal, this court

affirmed the district court’s dismissal of Cox II. See Cox, 715 F. App’x at 449–50. As to Cox I,

we determined that the district court had erred by failing to consider the second aspect of Easley—

whether the bankruptcy court had exercised its statutory power to “grant relief from the stay . . .

by . . . annulling such stay.” Id. at 447–48 (quoting 11 U.S.C. § 362(d)). This court held that the

district court should have considered whether the bankruptcy court’s order vacating the stay was

intended to be retroactive—thus validating the otherwise void complaint—or prospective only. Id.

We acknowledged that the interpretation of a court order is a question of law, but found that the

bankruptcy court’s order (negotiated by the parties) was ambiguous as to its intended retroactive

or prospective effect, and thus remanded for the district court to determine, in the first instance,

the context of the order and the parties’ intent in drafting it. See id. at 448–49.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

On remand, after limited discovery, the district court considered the evidence produced by

the parties, converting the original motion to dismiss into a motion for summary judgment pursuant

to Federal Rule of Civil Procedure 56. The district court found that there was no evidence that the

parties negotiating the agreed order intended to retroactively validate Cox’s state civil suit against

SVS and granted summary judgment to SVS on that basis.

As an initial matter, the district court rejected Cox’s argument that the plain meaning of

the stay-relief order, specifically its use of the word “resume,” required a finding that the order

was meant to apply retroactively. The district court noted that this court already considered the

plain meaning of the order and found it ambiguous, and thus concluded that consideration of the

language of the order itself should not weigh in favor of either party’s interpretation. The district

court also rejected Cox’s argument that ambiguity in the agreed stay order should be construed

against SVS as the drafter. The court declined to apply this rule of construction because it found

that the parties had equal bargaining power and that the agreed order was the product of

negotiations.

The district court considered the limited evidence submitted by both parties, specifically

affidavits from Cox and the parties’ attorneys—Levy excluded—regarding their intent in

negotiating and ratifying the agreed stay order. Cox and his personal-injury attorneys, James Ryan

Turner and Daly, submitted affidavits stating their belief that the intent behind the agreed order

was to annul the stay and allow Cox to retroactively reinstate his civil suit against SVS.

SVS submitted an affidavit from its personal-injury attorney Maines, in which she claims that she

was unaware that Cox had sought relief from the stay in bankruptcy court, and that had she been

aware, she would have brought the mistaken assertion that the suit was pre-petition to the lawyers’

and the bankruptcy court’s attention. SVS also submitted an affidavit from its bankruptcy attorney

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

McEntee stating that due to the language in Cox’s motion for stay relief, she believed that the state

civil suit was a pre-petition action; that she removed the term “institute” from the proposed order

based on that belief; and that at no point in drafting or agreeing to the order did she contemplate

that it would apply retroactively to validate a post-petition action.

Ultimately, the district court decided that it would only rely on evidence concerning the

intent of the parties who actually negotiated and drafted the order—Levy and McEntee—rather

than the intent of Cox and SVS, and their personal-injury attorneys, who were at most indirectly

involved. The court determined that “[f]rom the affidavits, it appears the agreed order was

negotiated on mistaken beliefs or oversights.” R. 54, PID 549.2 Because there was no affidavit or

other testimony from Levy, the court could not determine whether his designation of the state civil

suit as a pre-petition action was due to a “scrivener’s error” or a mistaken understanding. Id. But

the district court noted that there was unrefuted testimonial evidence, in the form of affidavits from

SVS’s personal-injury attorney and McEntee, that McEntee was not informed and did not discover

on her own that Cox’s suit was filed after the bankruptcy stay was in effect. And McEntee stated

that she negotiated under the assumption that the suit was filed pre-petition, and thus that a

prospective stay would allow the action to resume.

Taking the language of Levy’s notice of motion for stay relief along with McEntee’s

affidavit, the district court concluded that the bankruptcy attorneys were both under the mistaken

impression that Cox’s civil suit was filed before SVS’s bankruptcy petition, and thus that the

parties negotiating the agreed stay order did not intend for Cox’s suit to be retroactively reinstated.

Based on that finding, the district court granted summary judgment in favor of SVS. The district

court denied Cox’s subsequent motion to alter or amend the judgment. Cox v. Specialty Vehicle

2
The remainder of the record citations refer to the record in Cox I.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

Sols., LLC, No. 7:15-80-KKC-HAI, 2019 WL 6873866, at *6 (E.D. Ky. Dec. 17, 2019). This

appeal followed.

II.

We review a district court’s grant of summary judgment de novo. Med. Mut. of Ohio v. k.

Amalia Enters. Inc., 548 F.3d 383, 389 (6th Cir. 2008). “Summary judgment is proper if the

evidence, taken in the light most favorable to the nonmoving party, shows that there are no genuine

issues of material fact and that the moving party is entitled to a judgment as a matter of

law.” Id. (quoting Mazur v. Young, 507 F.3d 1013, 1016 (6th Cir. 2007)).

The sole task to be undertaken by the district court on remand was to ascertain what the

agreed order was intended to execute, taking into account the order itself, the context, and the

intent of the parties. “Where a contractual provision . . . is deemed ambiguous . . . the court may

look to extrinsic evidence—‘additional evidence that reflects the intent of the contracting

parties’—to help construe it.” In re AmTrust Fin. Corp., 694 F.3d 741, 750 (6th Cir. 2012)

(quoting Wulf v. Quantum Chem. Corp., 26 F.3d 1368, 1376 (6th Cir. 1994)). The district court

determined that the intent of the parties, as manifested through the bankruptcy lawyers, was to

permit a pre-petition case to resume, and not to retroactively validate a post-petition action.

Cox presents several grounds on which he believes the district court erred: (1) by failing to

begin with the language of the order before considering extrinsic evidence, (2) by refusing to

construe ambiguities in the agreed stay order against SVS as the drafter, (3) “by relying exclusively

on the alleged intent of the bankruptcy attorneys while ignoring the intent of the parties, and by

drawing all inferences in favor of SVS,” and (4) “by using the wrong standard of proof in finding

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

that the plain terms of the agreed order should be discounted because they were procured through

misrepresentation.” Appellant’s Br. at 13–14. We address each argument in turn.

Cox’s argument that the district court erred by “failing to ascribe the plain meaning to

the terms of the consent order” is without merit. In Cox’s prior appeal, we held that the terms of

the agreed order were ambiguous regarding the dispositive question whether it was intended to

retroactively validate the post-petition personal-injury action, and that resolving that ambiguity

required consideration of the intent of the parties in negotiating the order. Cox, 715 F. App’x at

448–49. Cox insists that the plain language of the order resolves this case, and that at the very

least, at summary judgment, the district court was required to make all inferences in his favor and

was thus required to infer that the inclusion of the word “resume” could be interpreted to mean

that the order was retroactively applicable. Appellant’s Br. at 14–19. But if that were the case,

there would have been no reason for this court to remand the case for inquiry into the intent of the

negotiating parties. To be sure, the actual language of the order is not rendered irrelevant simply

because it is ambiguous regarding its retroactivity. Any asserted intended meaning that cannot be

reconciled with the language of the order and the circumstances of its entry would be

impermissible. But the district court’s interpretation here looked at the language together with all

the circumstances.

The district court also did not err by declining to apply the rule of contra proferentem—

that an agreement should be construed against the drafter—to construe ambiguities in the agreed

stay order against SVS. This court remanded for the district court to determine whether the order

was intended to retroactively validate the post-petition action based on the intent of the negotiating

parties. “Unlike contract rules that help to interpret the meaning of a term, and thereby uncover

the intent of the parties, contra proferentem is by definition triggered only after a court determines

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

that it cannot discern the intent of the parties.” Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1417

(2019). Here, the district court determined that the rule was inapplicable because the agreed order

was the product of negotiations between equal parties. We also note that the district court

ultimately determined that it was able to discern the parties’ intent. We find no error.

Cox next argues that the district court erred by “relying exclusively on the alleged intent

of the bankruptcy attorneys while fully ignoring the intent of the parties.” Appellant’s Br. at 19.

According to Cox, the district court should have considered what Cox believed he was agreeing to

when he consented to the terms of the agreed order, rather than the intent of the attorneys who

negotiated it. Id. at 19–22. Cox asserts in his affidavit that he would not have “agreed to include

the word ‘resume’ in the order if, by ‘resume and prosecute to conclusion[,]’ what it really meant

was ‘void the civil action identified.’” R. 49, PID 490. There is little question that it would have

made no sense for Cox to agree to an order for relief from the stay that did not encompass the

action he had brought, and the district court does not appear to have questioned Cox’s intent. The

problem with Cox’s position is that although SVS and McEntee also believed that the agreed order

would grant the relief Cox sought, they believed the order properly allowed a pre-petition suit to

move forward, not a post-petition suit.

Cox is correct that the meaning of an ambiguous contract is determined by the intent of the

parties. But when a party to an agreement authorizes an attorney to negotiate on his behalf and

consents to the terms negotiated by his attorney, but the attorney fails to effectuate the party’s

intent by making representations that are inconsistent with that intent, the party is bound by the

attorney’s representations. Cf. Nafziger v. McDermott Int’l, Inc., 467 F.3d 514, 524 (6th Cir. 2006)

(explaining that “clients must ‘be held accountable for the acts and omissions of their chosen

counsel’”) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 396–

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

97 (1993)). Attorneys attempting to resolve a dispute on behalf of their client must be able to

depend on the good-faith representations of opposing counsel. This is particularly true given that

in most states, it is considered an ethical violation for an attorney to directly negotiate with an

opposing party who is represented by counsel. See Model Rules of Prof’l Conduct R. 4.2.

Here, there is little evidence regarding Levy’s understanding of the agreement. Because

Levy did not submit an affidavit, the only direct evidence we have of his intent in negotiating the

agreed order is the language of the notice of motion for stay relief Levy submitted to the

bankruptcy court, the application, and the order. The notice characterized the state-court suit as a

pre-petition action. As the district court acknowledged, it is entirely possible that this was a

typographical error, rather than a misunderstanding of the nature of the case. But neither Cox nor

any of his attorneys corrected the mischaracterization. And, ultimately, the purpose of the agreed

stay-relief order was to grant the relief Cox sought in the motion on terms acceptable to SVS.

Whether intentional or not, the relief sought in the motion was a stay to resume a pre-petition suit,

not a stay to retroactively validate an otherwise void post-petition suit.

Further, the district court did not err in deciding the issue on a motion for summary

judgment. Cox presented no evidence to dispute the fact that McEntee, acting on behalf of SVS,

believed that the stay relief was prospective in nature based on the representation in the notice of

motion that the action was pre-petition. Cox’s affidavit merely presented his own, albeit

reasonable, assumptions regarding the meaning of the agreement, which were never directly

communicated to SVS, SVS’s counsel, or, apparently, even Levy.

Ultimately, an agreement is supposed to represent a meeting of the minds. McGeorge v.

White, 174 S.W.2d 532, 533 (Ky. 1943) (“To consummate a binding contract[,] . . . there must be

a meeting of the minds of the parties or mutual assent to the same thing, and all material terms and

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

conditions of the contract, including a certainty of the subject matter, must be agreed on.”). Taking

the evidence in the light most favorable to Cox, there is a dispute whether there was ever a meeting

of the minds to validate a post-petition suit, and thus, ever a valid agreement, but the district court

did not clearly err in finding that SVS and its attorney did not intend that the order grant

retrospective relief. In other words, there are two possibilities based on the evidence presented:

either Levy and McEntee came to an agreement, on behalf of their clients, to grant prospective

relief on the mutual misunderstanding that the action to be resumed was filed pre-petition, or there

was no meeting of the minds as to the meaning of the terms of the agreement.

If this were a simple issue of contract interpretation, rather than interpretation of the

bankruptcy court’s agreed order, whether there was a meeting of the minds as to the terms of the

contract would arguably be a trial issue unsuitable for summary judgment. But because this is an

order of the bankruptcy court, and because Cox has not obtained relief from the order, simply

treating the order as a nullity is not an option available to this court or the district court. In any

event, that course would not change the outcome; if the agreed order were rescinded, Cox’s suit

would be dismissed just the same. The only way Cox’s pre-petition suit remains viable is if the

order vacating the stay was intended to be retroactive. Because the district court reasonably found

that SVS and McEntee did not intend to enter such an order, and that the order contemplated the

pursuit of a pre-petition suit, the district court did not err in granting summary judgment in favor

of SVS.

Cox’s final argument is that the district court employed the wrong standard of proof in

determining that the agreement was procured by misrepresentation. Appellant’s Br. at 22–23. But

the district court did not grant summary judgment based on a finding that the terms of the

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

agreement were unenforceable due to fraud or misrepresentation; it merely found that there was

no evidence to support Cox’s interpretation of the agreement.

III.

For the foregoing reasons, we AFFIRM the judgment of the district court.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

CLAY, Circuit Judge, concurring in the judgment. This case comes before us once

again to address the same question that the Court declined to take up the first time around: did the

bankruptcy court’s order allow Cox to proceed with a lawsuit that he filed after SVS filed for

Chapter 11 bankruptcy.1 I agree with the district court’s finding that the bankruptcy court’s order

did not annul the automatic stay, and, therefore, Cox cannot proceed with his initial lawsuit. See

Cox v. Specialty Vehicle Solutions, LLC, 715 F. App’x 443, 454 (6th Cir. 2017) (Clay, J.,

dissenting). However, I continue to disagree with the majority’s assertion that the district court

needed to look to the parties’ intent to determine the effect of the bankruptcy court’s ambiguous

order. The effect of that order can be determined by the language of the order, the parties’ filings

that were before the bankruptcy judge, and underlying principles of bankruptcy law. See id. at

453–54. Cox’s petition for relief to the bankruptcy court shows that he “requested the continuation

of a pre-petition rather than a post-petition law suit.” Id. at 453. Accordingly, the filings in the

bankruptcy litigation show that “the bankruptcy judge never intended the allowance of a lawsuit

filed after the automatic stay was in place.” Id. Because the district court ultimately came to this

conclusion (after an unnecessary detour), I respectfully concur in the judgment to affirm the district

court’s order granting SVS’s motion for summary judgment.

1
I agree with the majority opinion’s recitation of the relevant facts and procedural history and will not restate
them here.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

HELENE N. WHITE, Circuit Judge, dissenting. This is a most unfortunate outcome.

As Cox argues, SVS would not be harmed by applying the stay relief retroactively because any

recovery has been limited to the applicable insurance.

In our first opinion, we declined to interpret the agreed order entered by the bankruptcy

court in the first instance because the district court had dismissed Cox I without considering the

meaning of the order. We determined that the order was ambiguous because, on the one hand, it

used the terms “vacate” and “resume,” but, on the other, it did not use the statutory term

“annulling,” or otherwise state that it was intended to apply retroactively. We concluded that it

would be unfair to interpret the order ourselves without giving the parties an opportunity to present

evidence in support of their intent and understanding of the language of the order.

It is unfortunate that on remand Levy did not provide evidence of his own understanding

and purpose in using the chosen words. And it is also unfortunate that the parties did not delve

further into the asserted understanding and intent of the lawyers in using the chosen language. For

example, the use of the word “vacated” in contrast to “lifted” or “terminated” was not examined.

Nor was the materiality of the suit being post-petition rather than pre-petition addressed, other than

by McEntee’s simple assertion that she would not have agreed to the order had she known that the

suit was post-petition. But, the reason for that is not self-evident given the agreement to limit

recovery to the insurance coverage. And, it is also unfortunate that the parties did not return to the

bankruptcy court to see if it would clarify the order in light of this court’s remand.

What was established is that there was either a mutual mistake of fact or no meeting of the

minds. In this regard, inquiry into the intent of the agreed order’s authors proved to be unhelpful

in establishing the meaning of the chosen language. As such, we are once again left with the

language of the order.

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No. 20-5036, Cox v. Specialty Vehicle Solutions LLC

Although ambiguous regarding its retroactivity, it is clear that the intent of the order was

to permit the identified suit to go forward provided recovery was limited to the extent of coverage

under the insurance policy. On remand, SVS failed to show that “vacate” had an intended meaning

contrary to its ordinary and accepted meaning. And given the identification of a particular civil

action that was to “resume” and the elimination of the word “institute,” SVS’s evidence did not

establish that the parties shared an understanding that the identified lawsuit would not be permitted

to proceed. It is true that SVS makes a strong case that McEntee did not realize that the action

was filed post-petition when she agreed to vacate the stay and permit the lawsuit to resume, but

SVS has failed to show that the chosen words meant something else.

To be sure, suits in violation of a bankruptcy stay are against public policy, but the

undisputed facts are that Cox did not have notice of the bankruptcy petition or the stay until after

the personal-injury action was filed, and Cox honored the stay by seeking relief in the bankruptcy

court. On this record, there is no reason to believe that the stay relief would not have been granted

conditioned on damages being limited to the available coverage had the true facts been known to

the bankruptcy court.

I would reverse and permit Cox I to proceed.

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