Verit Muy and Mr. Tea v. Michelle Moore and Michelle Moore
- Dulce Foster
- 0:25-cv-00499
- U.S. District Court · District of Minnesota
- 1
In Verit Muy and Mr. Tea, LTD v. Michelle Moore and Michelle Moore, LLC, Magistrate Judge Foster denied Defendants' request to pause the case, ruling that the federal bankruptcy stay law does not apply when the person who filed for bankruptcy is the one who started the lawsuit.
Plaintiffs and defendants in franchise disputes where one plaintiff has filed for bankruptcy; parties seeking to use the bankruptcy automatic stay to pause cases brought by the debtor.
What happened
Verit Muy and Mr. Tea, LTD v. Michelle Moore and Michelle Moore, LLC is a franchising dispute in which Verit Muy and Mr. Tea, LTD (the franchisees) sued Michelle Moore and Michelle Moore, LLC (the franchisors). While the case was ongoing, Defendant Michelle Moore filed a notice informing the court that Plaintiff Verit Muy had filed for Chapter 13 bankruptcy — a form of personal bankruptcy that allows individuals to restructure their debts — and asked the court to automatically pause the entire case as a result.
The Defendants argued that a federal bankruptcy law, 11 U.S.C. § 362, required the court to stop the proceedings. That law provides an automatic pause (called a "stay") on legal proceedings once someone files for bankruptcy. Defendants claimed this rule applied here because one of the plaintiffs, Mr. Muy, had filed for bankruptcy.
Magistrate Judge Foster denied the request, explaining that the automatic stay under § 362 protects bankruptcy filers from proceedings brought against them — it does not pause cases that the bankruptcy filer themselves started. Because Mr. Muy initiated this lawsuit and the Defendants had not filed any counterclaims against him, the law simply did not apply. The court ordered that all deadlines in the case remain in effect.
The detailed version
- Verit Muy and Mr. Tea v. Michelle Moore and Michelle Moore · No. 0:25-cv-00499
- Dulce J. Foster
- Apr. 2, 2026
Background
This case involves a franchising dispute. Plaintiffs Verit Muy and Mr. Tea, LTD are the franchisees; Defendants Michelle Moore and Michelle Moore, LLC are the franchisors. Plaintiffs filed the complaint initiating this lawsuit. The record does not reflect that Defendants have filed any counterclaims against Plaintiffs.
The Motion
Defendants filed a document titled "Suggestion of Bankruptcy and Request for Stay of Proceedings as to Defendant Verit Muy" (ECF No. 48). Despite the title referring to Mr. Muy as a "Defendant," the opinion makes clear he is a Plaintiff. Defendants notified the court that Mr. Muy had filed for Chapter 13 bankruptcy (a form of bankruptcy under the federal Bankruptcy Code allowing individuals to propose a repayment plan) and argued that 11 U.S.C. § 362 required an automatic stay — a mandatory legal pause on proceedings — to go into effect.
The Court's Analysis
11 U.S.C. § 362 provides that the filing of a bankruptcy petition automatically stays most judicial proceedings against the debtor (the person who filed for bankruptcy). The key legal question was whether this automatic stay applies to proceedings that the debtor himself initiated, not proceedings brought against him.
Magistrate Judge Foster, citing Brown v. Armstrong, 949 F.2d 1007, 1009-10 (8th Cir. 1991), held that § 362 stays proceedings brought against a debtor, not proceedings brought by a debtor. Because Mr. Muy is the party who filed this lawsuit, and because Defendants have not asserted any counterclaims against him, there are no proceedings "against" Mr. Muy that could be stayed. The court therefore found § 362 inapplicable.
Ruling
Defendants' request for a stay was denied. The court ordered that all pretrial schedule deadlines remain in full force and effect.
Note on Title Discrepancy
The Defendants' filing referred to Mr. Muy as "Defendant Verit Muy," but the opinion and the case caption identify him as a Plaintiff. The court did not address this discrepancy explicitly, but the analysis treated him correctly as the party who initiated the proceedings.
Reviewer note from the AI+
Read the full 1-page opinion on CourtListener, the free public archive maintained by the Free Law Project.