Baptiste v. State Farm Fire & Casualty Company

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
NITYOKE BAPTISTE 	CIVIL ACTION
VERSUS 	NO. 23-1408-SDD-EWD
STATE FARM FIRE AND
CASUALTY INSURANCE
COMPANY
RULING
This matter is before the Court on the Motion to Exclude Former Counsel from
Settlement Payment 1 by Plaintiff, Nityoke Baptiste (“Plaintiff”). This proceeding arises out
of damage to Plaintiff’s home due to Hurricane Ida. Plaintiff was originally represented by
law firm of McClenny, Moseley & Associates (“MMA”), and this matter was settled in
principle on October 23, 2024.2 Plaintiff maintains that, since this time, counsel had made
diligent efforts to find a mutually acceptable means of settlement with MMA and/or division
of attorneys’ fees; however, these requests for compromise have been ignored. Thus,
Plaintiff asks this Court to do “everything in its power to make sure that the homeowner
in this case” receives the proceeds of the settlement.3 This Court lacks such power.
On April 9, 2024, MMA filed a Petition for Chapter 11 Bankruptcy in the Bankruptcy
Court for the Southern District of Texas, Case No. 24-31596, and an automatic stay was
issued pursuant to Section 362 of the Bankruptcy Code.
Once a party files for bankruptcy, the automatic stay provision under 11 U.S.C.A.
1 Rec. Doc. 22.
2 Rec. Doc. 22-1, p. 1.
3 Id.
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§ 362(a) generally renders other courts without jurisdiction to determine rights between
parties, as conflicts must be resolved by the bankruptcy court. The automatic stay is
designed to centralize disputes concerning the debtor and the property of the bankruptcy
estate in the bankruptcy court, ensuring an orderly and equitable distribution of assets
and protecting the debtor from harassment by creditors.4 The scope of the automatic stay
is broad, encompassing almost any type of formal or informal action against the debtor
or property of the estate. 5 It prevents any collection activity against property of the estate
and imposes an affirmative duty to discontinue post-petition collection actions. 6 The stay
applies to the commencement or continuation of judicial, administrative, or other actions
against the debtor that were or could have been commenced before the bankruptcy filing. 7
Thus, this Court lacks jurisdiction to act on Plaintiff’s motion unless MMA’s
bankruptcy case has been resolved or the Bankruptcy Court has issued an Order allowing
this Court to proceed. Plaintiff urges the Court to follow the Eastern District of Louisiana’s
Order in In re: Hurricane Ida Claims, wherein the court excluded MMA from all proceeds
of settled claims based on pre-petition findings that “MMA voluntarily and knowingly
waived and forfeited whatever rights it may have had in fees and/or costs in its former
cases in this District before it declared bankruptcy.” 8 However, no such findings have
been made in the Middle District of Louisiana, and the Court is not aware of any
stipulations or waiver of rights by MMA in this district. Thus, the Court cannot follow the
Order from the Eastern District of Louisiana.
4 In re Cashco, Inc., 599 B.R. 138 (2019).
5 Burton v. Infinity Capital Management, 862 F.3d 740 (2017).
6 Id.
7 In re International Heritage, Inc., 239 B.R. 306 (1999).
8 Rec. Doc. 22-2 (citing Ricks v. Imperial Fire & Cas. Ins. Co., Civ. A. No. 23-cv-02844 (E.D. La.)(rec. doc.
51); Foskey v. American Modern Property and Casualty Insurance Company, Civ. A. No. 23-cv-5316 (Dec.
12, 2024)(rec. doc. 21).
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This situation has sadly arisen in several other cases involving MMA. For example,
in Yokubaitis v. State Farm Fire & Casualty Co., 9 parties reached a settlement arising out
of claims related to damage sustained by Hurricane Laura. MMA had previously
represented Plaintiff; however, the Cox law firm settled the case. 10 Before the court was
aware of the bankruptcy proceedings, it issued an order extinguishing property rights of
MMA. MMA subsequently filed an adversary proceeding against Cox, “seeking a
declaratory judgment regarding the determination of property of the bankruptcy estate,
turnover of estate property, and violation of the automatic stay,” and Cox sought relief
from the district court that had previously dismissed the case. 11 The court rejected this
relief, finding as follows:
Cox's motion represents an attempt to evade the automatic stay, which
operates to bar Cox from proceeding against MMA's potential property
interests in these funds held in trust outside of the purview of the bankruptcy
court. The record in MMA's bankruptcy proceeding does not indicate
whether Cox has been served with the adversary proceeding, but this is
irrelevant to the operation of the automatic stay. Cox's motion specifically
seeks a hearing, as to which MMA would necessarily be the “defendant.”
Accordingly, Cox seeks to prosecute a claim against MMA, a debtor in
bankruptcy, as to MMA's claimed property interest in the subject funds,
which are clearly part of the bankruptcy estate under 11 U.S.C. § 541(a)(1).
As such, Cox's motion appears to be a “prohibited effort” in violation of 11
U.S.C. § 362(a)(3). Fulton, supra. 12
The court then instructed Cox that, to the extent it desired relief from the automatic
stay, “permitting it to litigate the nature and extent of any property interest MMA may have
in these and other similar funds in other cases, bankruptcy law provides Cox with an
avenue for such relief in the form of a motion filed in the bankruptcy court. 11 U.S.C. §
9 No. 2:22-CV-04360, 2025 WL 1288967 (W.D. La. Apr. 9, 2025).
10 Id. at *1.
11 Id. at *2.
12 Id. at *3.
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362(d).”13
The same is true here. The Parties may seek relief from the Bankruptcy Court for
the Southern District of Texas. Accordingly, the Motion to Exclude Former Counsel from
Settlement Payment 14 is hereby DENIED.
IT IS SO ORDERED.
Baton Rouge, Louisiana, this 4th day of February, 2026.
________________________________
SHELLY D. DICK
CHIEF DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA
13 Id.
14 Rec. Doc. 22.
S
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