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Bd. of Supervisors v. Royal (In re Royal)

United States Court of Appeals for the Fourth Circuit

March 16, 2005, Argued ; May 24, 2005, Decided

No. 04-1895

Opinion

 [*538]  PER CURIAM:

Defendants-Appellants, Claude Royal and Virginia Royal (the "Royals"), appeal the district court's June 12, 2004 order holding that the automatic stay in bankruptcy, 11 U.S.C. § 362, does not operate to bar Plaintiffs-Appellees, the Board of Supervisors for the County of Campbell,  [**2]  et al. (the "County") from exercising the power of eminent domain over the Royals' land. Specifically, the district court, reversing the bankruptcy court, held that 11 U.S.C. § 362(b)(4) excepted the County's proposed use of eminent domain proceedings from the automatic stay provision as a matter of law. For the following reasons, we reverse the district court and remand this case for further proceedings.

The Royals own and operate the Twin Oaks mobile home park in Campbell County, Virginia. In order to provide residents with water, the Royals installed and maintained water wells on Twin Oaks. The County owns and operates a landfill adjacent to Twin Oaks. Between approximately 1996 and 2002, environmental contamination migrated underground from the landfill onto Twin Oaks, making some of the wells unsafe for drinking water provision. The Royals responded by closing the contaminated wells and opening new wells on uncontaminated portions of the property.  [*539]  These wells are currently providing safe drinking water, though there is a dispute over whether they will continue to do so.

Since 2002, the Royals and the County have been involved in negotiations regarding [**3]  the cleanup of Twin Oaks and the provision of safe drinking water to residents, but have been unable to reach an agreement. The County claims that it needs to permanently decommission the water wells on the Royals' property and install a public water system at Twin Oaks in order to guarantee safe drinking water. The Royals claim that the current wells are safe and are closely monitored, that permanent decommissioning is unnecessary, and that the County wants to decommission the wells in order to avoid a costly clean-up of the contamination that it created. Specifically, the Royals contend that the County wants to engage in a cheaper and less effective decontamination procedure than that which would be necessary if the land were to support water wells in the future. In short, the parties fundamentally disagree over the best manner to remove the environmental contamination while providing for the health and safety of Twin Oaks residents. 1 

 [**4]  Unable to reach an agreement concerning the best manner to handle the contamination, the County indicated that it would take portions of Twin Oaks through eminent domain and permanently decommission the wells on the property taken.

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137 Fed. Appx. 537 *; 2005 U.S. App. LEXIS 9618 **

In Re: CLAUDE MASON ROYAL; In Re: VIRGINIA HOWELL ROYAL, Debtors. BOARD OF SUPERVISORS FOR THE COUNTY OF CAMPBELL; CAMPBELL COUNTY UTILITIES AND SERVICE AUTHORITY, Plaintiffs - Appellees, versus CLAUDE MASON ROYAL; VIRGINIA HOWELL ROYAL, Defendants - Appellants, and HERBERT BESKINS, Trustee; UNITED STATES TRUSTEE FOR THE WESTERN DISTRICT OF VIRGINIA, Parties in Interest.

Notice:  [**1]  RULES OF THE FOURTH CIRCUIT COURT OF APPEALS MAY LIMIT CITATION TO UNPUBLISHED OPINIONS. PLEASE REFER TO THE RULES OF THE UNITED STATES COURT OF APPEALS FOR THIS CIRCUIT.

Prior History: Appeal from the United States District Court for the Western District of Virginia, at Lynchburg. Norman K. Moon, District Judge. (CA-04-8-NKM; BK-03-683).

Disposition: REVERSED AND REMANDED.

CORE TERMS

automatic stay, bankruptcy court, violating, eminent domain, power to regulate, district court, government entity, regulations, parties, contamination, environmental, proceedings, compliance, empowering, permanent

Bankruptcy Law, Judicial Review, Standards of Review, De Novo Standard of Review, Civil Procedure, Appeals, De Novo Review, Procedural Matters, General Overview, Automatic Stay, Scope of Stay, Claims Against Estate Property, Real Property Law, Bankruptcy, Automatic Stays, Administrative Powers, Exceptions to Stay, Police & Regulatory Actions, Entry of Judgments, Stays of Judgments, Governments, Local Governments, Police Power, Eminent Domain Proceedings, Constitutional Limits & Rights, Legislation, Interpretation, Relief From Stay, Procedural Matters, Relief for Cause, Claims, Allowance of Claims, Judicial Review, Ordinances & Regulations, Types of Statutes, Torts, Nuisance, Criminal Law & Procedure, Nuisances, Public Health Nuisances, Elements, Claims By & Against, Duties & Powers, Public Improvements, Nuisance, Types of Nuisances, Public Nuisances, Finance