Insured Advocacy Group, LLC v. Aqua Docs Water Restoration, Inc., et al.
- Vernon Broderick
- 1:24-cv-00838
- U.S. District Court · Southern District of New York
- 4
In Insured Advocacy Group v. Aqua Docs, Magistrate Judge Cave granted in part a bankruptcy stay for Mayhew but denied it for Devia.
The ruling pauses Insured Advocacy Group’s action against Melissa Mayhew because of her bankruptcy, but allows the action to continue against John Devia; Aqua Docs Water Restoration, Inc. had already been dismissed.
What happened
Insured Advocacy Group, LLC sued Aqua Docs Water Restoration, Inc., Melissa Mayhew, and John Devia over an agreement. Aqua Docs had already been dismissed from the case through a judgment, while Insured Advocacy Group said it intended to continue against Mayhew and Devia individually.
Mayhew filed for Chapter 13 bankruptcy and asked the court to pause this case. Insured Advocacy Group did not respond to the request, so the court treated it as unopposed.
Magistrate Judge Sarah L. Cave granted the request in part by staying the case against Mayhew, but denied it in part as to Devia because he did not show unusual circumstances justifying a stay for a non-bankrupt co-defendant. The court said Devia could renew the request if he made that showing.
The detailed version
- Insured Advocacy Group, LLC v. Aqua Docs Water Restoration, Inc., et al. · No. 1:24-cv-00838
- Vernon Broderick
- Oct. 8, 2025
Background
Insured Advocacy Group, LLC (“IAG”) brought a breach-of-contract action arising from a First Party Claims Non-Recourse Sale and Assignment Agreement between IAG and Aqua Docs Water Restoration, Inc. (“Aqua”). The defendants remaining in the action were Melissa Mayhew and John Devia. The opinion notes that, on April 8, 2025, the court entered a stipulated judgment against Aqua and dismissed Aqua from the action. IAG stated that it intended to proceed against Mayhew and Devia in their individual capacities.
Mayhew filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Florida. Mayhew and Devia then filed a letter motion requesting that this action be paused under Section 362 of the Bankruptcy Code. IAG did not respond by the deadline, so the court treated the motion as unopposed.
Legal standard
Filing a bankruptcy petition generally creates an automatic stay, meaning that it pauses the continuation of judicial proceedings against the person who filed for bankruptcy. The court explained that this stay ordinarily applies only to the bankruptcy debtor, not to non-bankrupt co-defendants such as Devia. A court may extend the stay to a non-debtor in unusual circumstances, including where continuing the case would seriously threaten the debtor’s reorganization or where the debtor and non-debtor’s liability is legally connected. The non-debtor requesting that extension bears the burden of showing that it is justified.
Ruling
The court held that Mayhew’s bankruptcy petition stayed this action as to Mayhew. It denied the request to stay the action as to Devia because Devia had not attempted to show, and had not shown, unusual circumstances warranting an extension of the stay. The court stated that Devia may renew the motion if he makes the required showing.
The court therefore granted in part the motion by staying the action as to Mayhew and denied in part the motion insofar as the action was not stayed as to Devia. The Clerk of Court was directed to close the motion docket entry.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.