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Novalash, Inc. v. Reed

United States District Court, S.D. Texas

January 21, 2014

NOVALASH, INC, Appellant,
v.
JULENA TRESSA REED, Appellee

Page 832

For Julena Tressa Reed, Debtor formerly known as Julena Pittman formerly doing business as TruLash, In Re: Russell Van Beustring, Attorney at Law, Houston, TX.

For NovaLash, Inc, Appellant: Ben L Aderholt, Looper Reed et al, Houston, TX.

OPINION

Page 833

OPINION AND ORDER

MELINDA HARMON, UNITED STATES DISTRICT JUDGE.

Pending before the Court is an appeal by Appellant-Plaintiff NovaLash, Inc. (" NovaLash" ) from an order of dismissal issued against it by the Bankruptcy Court in the Southern District of Texas (" Bankruptcy Court" ) in its adversary proceeding against Appellee-Debtor Julena Reed (" Reed" ). For the reasons explained below, the Court finds that the order should be reversed and the adversary proceeding should be reinstated.

I. Background

On August 12, 2011, Reed filed a Chapter 7 bankruptcy petition with the Bankruptcy Court. Appellant's Br. at 3, Doc. 7. According to NovaLash, Reed filed for bankruptcy in order to avoid paying damages to NovaLash for violating a judgment that NovaLash obtained in a state court case styled NovaLash, Inc. v. TruLash, Inc., Neomi Mayer, Julena Reed, and Yen Kim Hoang, No. 2010-46439 in the 164th Judicial District Court, Harris Count, Texas. Doc. 7 at 5-6. The Harris County Civil District Court (the " state court" ) entered judgment against Reed and her co-defendants on August 16, 2010, providing NovaLash " permanent injunctive relief." Doc. 7 at 4. Reed and her co-defendants allegedly violated that judgment, and NovaLash moved for contempt on May 20, 2011. Doc. 7 at 5. The state court ordered Reed to appear and show cause why NovaLash's motion for contempt should not be granted. Doc. 7 at 5. Reed failed to appear for the show cause hearing, and it was reset for Monday, August 15, 2011. Doc. 7 at 5. The Friday prior to the hearing, Reed filed her bankruptcy petition. Doc. 7 at 6.[1]

On August 16, NovaLash filed a motion to modify the bankruptcy stay so that it could complete its contempt proceeding against Reed. Doc. 7 at 6. A hearing on NovaLash's motion was held on September 7, whereupon the Bankruptcy Court denied the motion and Reed agreed to comply with the state court judgment, pending the outcome of the bankruptcy proceeding. Doc. 7 at 6; Appellee's Br. at 2, Doc. 8.

On October 21, 2011, NovaLash filed its adversary complaint against Reed, alleging the non-dischargability of its claim. Doc. 7 at 7; Doc. 8 at 3. On October 24, 2011, the Bankruptcy Court entered an order setting a scheduling conference for November 7, 2011. Doc. 7 at 7. Thereafter, the conference was reset to December 9, 2011. Doc. 7 at 7. When the parties appeared on December 9, NovaLash had not yet issued summons on Reed. Doc. 7 at 7; Doc. 8 at 3. The Bankruptcy Court ordered NovaLash to issue summons, and, on the record, reset the scheduling conference for February 29, 2012. Doc. 7 at 7; Doc. 8 at 3. The Bankruptcy Court also ordered the parties to confer and file a report pursuant to Bankruptcy Rule 7026 at least three business days prior to the scheduling conference. Doc. 8 at 4-5. The courtroom minutes from this hearing were entered into the docket as follows:

Courtroom Minutes. Time Hearing Held: 9:00 a.m. Appearances: Ben Aderholt. Scheduling conference continued to 2/29/2012 at 9:00 AM at Houston, Courtroom 400 (DRJ). Plaintiff to issue summons request within 10 days. If no answer, plaintiff will file a default order and set it for hearing on 2/29/2012. (jekd)

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Page 834

11-03525 Notice will be ...


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