A writ of possession, obtained before bankruptcy, does not terminate a lease or prevent the debtor-tenant from assuming the lease, at least in Florida.
Before bankruptcy, the debtor-tenant defaulted on a lease by nonpayment of rent. The landlord sued in state court, seeking eviction and damages. The landlord did not ask for termination of the lease. The debtor counterclaimed, alleging that the landlord had breached the lease by failing to maintain the roof.
The state court granted partial summary judgment of possession in favor of the landlord for the tenant’s failure to pay rent. The judgment of eviction authorized the issuance of a writ of possession to be enforced by the sheriff.
The same day that the state court issued the writ of possession, the debtor filed a chapter 11 petition. Six weeks later, the landlord filed a motion for modification of the stay, alleging that the lease had been terminated before bankruptcy.
Chief Bankruptcy Judge Laurel M. Isicoff of Miami denied the lift-stay motion, reasoning that the writ of possession had not terminated the lease. She said that the debtor might still assume the unexpired lease.
The landlord appealed, but District Judge Darrin P. Gayles affirmed in an opinion on March 30. He agreed with Judge Isicoff that the lease had not been terminated. Notably, Judge Gayles had served as a trial and appellate judge in the Florida state courts before elevation to the district court, so he is presumably well familiar with Florida law.
In Florida, Judge Gayles said that a landlord has three options when a tenant defaults: (1) take possession and terminate the lease; (2) take possession and hold the tenant liable for damages; or (3) do nothing and hold the tenant liable as rent comes due.
Citing Florida law and decisions by several bankruptcy courts in the Eleventh Circuit, Judge Gayles said that the first remedy alone terminates the lease. If the landlord were to terminate the lease, the landlord could not hold the tenant liable for future rent.
In other words, Judge Gayles said, a writ of possession only affects a tenant’s right to possess the property. He cited the late Bankruptcy Judge Michael G. Williamson, who held that a final judgment of possession and a writ of possession do not terminate a lease.
Affirming Judge Isicoff, Judge Gayles issued the same holding as Judge Williamson. He noted that the landlord in state court had sought only possession and the tenant’s continued payment of rent, not termination. He also said that the debtor had not lost possession of the property because the sheriff had not served the writ before bankruptcy.
A writ of possession, obtained before bankruptcy, does not terminate a lease or prevent the debtor-tenant from assuming the lease, at least in Florida.
Before bankruptcy, the debtor-tenant defaulted on a lease by nonpayment of rent. The landlord sued in state court, seeking eviction and damages. The landlord did not ask for termination of the lease. The debtor counterclaimed, alleging that the landlord had breached the lease by failing to maintain the roof.
The state court granted partial summary judgment of possession in favor of the landlord for the tenant’s failure to pay rent. The judgment of eviction authorized the issuance of a writ of possession to be enforced by the sheriff.
The same day that the state court issued the writ of possession, the debtor filed a chapter 11 petition. Six weeks later, the landlord filed a motion for modification of the stay, alleging that the lease had been terminated before bankruptcy.
Chief Bankruptcy Judge Laurel M. Isicoff of Miami denied the lift-stay motion, reasoning that the writ of possession had not terminated the lease. She said that the debtor might still assume the unexpired lease.