at bar with Nofziger Communications, Inc., et al. v. Griffin, et al., pursuant to FRCP 42(a), and should stay the action pursuant to Bankruptcy Rule 362, 11 U.S.C. § 362, pending the outcome of Bankruptcy Court proceedings against co-assignees Griffin and Naing. Defendant argues that the two cases meet Rule 42(a)'s standards for consolidation because they involve identical questions of law and fact. Defendant then argues that once the Court consolidates the case at bar with the action against Griffin and Naing, the language of Bankruptcy Rule 362 will require the Court to stay proceedings against Wynmark Trust. Specifically, defendant claims that Rule 362 will apply because the consolidated action will constitute the "continuation . . . of a judicial . . . proceeding against the debtor that was . . . commenced before" the debtors (Griffin and Naing) filed bankruptcy petitions under Rule 362.
The language of Rule 362 is not so unambiguous that we can apply it to the facts before us in only one way. Contrary to Wynmark Trust's assertions, a perfectly reasonable reading of the language of Rule 362 is that a bankruptcy petition operates as a stay of a judicial proceeding against the debtor, but does not stay proceedings against other parties within the same action. In fact, many courts have interpreted the language of Rule 362 exactly that way. See Fortier v. Dona Anna Plaza Partners, 747 F.2d 1324, 1330 (10th Cir. 1984) ("The language of the statute extends stay proceedings only to actions 'against the debtor.' There is nothing in the statute which purports to extend the stay to causes of action against solvent co-defendants of the debtor."), citing Williford v. Armstrong World Indus., Inc., 715 F.2d 124 (4th Cir. 1983); Wedgeworth v. Fibreboard, 706 F.2d 541 (5th Cir. 1983); Pitts v. Unarco Industries, Inc., 698 F.2d 313 (7th Cir. 1983), cert. denied, 464 U.S. 1003, 78 L. Ed. 2d 698, 104 S. Ct. 509 (1983); see also Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196 (6th Cir. 1983). Moreover, such an interpretation reflects the legislative purposes behind the automatic stay. See Fortier, 747 F.2d at 1330 (discussing legislative history of Bankruptcy Rule 362).
Therefore, we would not stay the proceedings against Wynmark Trust even if we decided to consolidate the action sub judice with the prior action against Griffin and Naing. Given that conclusion, we will exercise our discretion under FRCP 42(a)
and refuse defendant's motion to consolidate the case at bar with Nofziger Communications, Inc., et al. v. Griffin, et al., Civil Action No. 89-3130 (D.D.C.).
Upon consideration of defendant's motion to dismiss or in the alternative to consolidate and stay, plaintiff's opposition, defendant's reply, and the entire record herein, and it appearing to the Court that genuine issues of material fact exist as to whether defendant Wynmark Trust assumed the obligation to pay Nofziger's additional tax liability, we find that plaintiff has stated a claim upon which relief can be granted. In addition, we find that dismissal is not warranted for failure to join Wynmark Development as a party. Finally, we find that defendant may not take advantage of the automatic stay currently operating in Nofziger Communications, Inc., et al. v. Griffin, et al., Civil Action No. 89-3130 (D.D.C.). We therefore deny defendant's motion in its entirety.
An Order consistent with the above has been filed this date.
Order - February 21, 1991, Filed
In accordance with the foregoing Memorandum Opinion, it is by the Court this 21st day of February, 1991
ORDERED that defendant's Motion to Dismiss or in the Alternative to Consolidate and Stay is denied, and it is
ORDERED that a status call is set for March 1, 1991 at 9:30 a.m. in Courtroom No. 12, United States District Court for the District of Columbia