Franklin Sav. Ass'n v. OTS, Civ. A. No. 90-4054-DES.

• Decision Date: 21 January 1993
• Docket Number: Civ. A. No. 90-4054-DES.
• Citation: 150 BR 61
• Parties: FRANKLIN SAVINGS ASSOCIATION and Franklin Savings Corporation, Plaintiffs, v. OFFICE OF THRIFT SUPERVISION and Kansas Savings and Loan Department, Defendants.
• Court: U.S. District Court — District of Kansas

150 B.R. 61 (1993)

FRANKLIN SAVINGS ASSOCIATION and Franklin Savings Corporation, Plaintiffs, v. OFFICE OF THRIFT SUPERVISION and Kansas Savings and Loan Department, Defendants.

Civ. A. No. 90-4054-DES.

United States District Court, District of Kansas.

January 21, 1993.

Roger D. Stanton, Stinson, Mag & Fizzell, Overland Park, KS, David E. Everson, Jr., Stinson, Mag & Fizzell, Charles W. German, Brant M. Laue, Rouse, Hendricks, German, May & Shank, Kansas City, MO, Richard F. Hunter, Fischer, Hughes & Bessette, Malone, NY, for plaintiffs.

Jan M. Hamilton, Hamilton, Peterson, Tipton & Keeshan, Topeka, KS, Thomas J. Loughran, H. Lowell Brown, Finkelstein, Thompson & Loughran, Thomas J. Segal, Office of Thrift Supervision, Paul W. Grace, Steven W. Dimmick, Cheryl Johnson, Graham & James, Washington, DC, for defendants.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on motion by plaintiffs Franklin Savings Association ("FSA") and Franklin Savings Corporation ("FSC") for review of the bill of costs submitted by the defendant Office of Thrift Supervision ("OTS") (Doc. 429). The OTS submitted a bill of costs seeking $122,019.60 in costs against FSC. These costs were taxed as submitted.

The plaintiffs contend the bill of costs violates the automatic bankruptcy stay as to FSC, 11 U.S.C. § 362, and should be denied in full. In the alternative, the plaintiffs contend the costs should have been assessed against FSA or split between FSA and FSC, because the FSA board authorized the litigation. Finally, the plaintiffs maintain that numerous allowed costs were improper and the total should be reduced. Because the court finds an assessment of costs against FSC violates the automatic bankruptcy stay, the court will deny in total the bill of costs submitted by the OTS.

This court's review of the clerk's assessment of costs is de novo. Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 232-33, 85 S.Ct. 411, 415-16, 13 L.Ed.2d 248 (1964). The court is guided in its review by 28 U.S.C. § 1920, Fed.R.Civ.P. 54(d), and D. Kan. Rule 219, which provide for the award of costs.

Pursuant to 11 U.S.C. § 362, the filing of a petition in bankruptcy operates as an automatic stay of the following:

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;

. . . . .

(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title. . . . ¹

A claim under the Bankruptcy Code is to be construed very broadly and includes any right to payment "whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. . . ." 11 U.S.C. § 101(5)(A); Matter of M. Frenville Co., Inc., 744 F.2d 332, 336 (3rd Cir.1984) (citing the legislative history showing the intent of Congress that "claim" be liberally construed).

The timing of events in this case and the broad construction the court must give the concept of "claim," lead this court to the conclusion that awarding costs to OTS would violate the bankruptcy stay. On May 28, 1991, the Tenth Circuit Court of Appeals reversed and vacated this court's judgment and remanded the case for dismissal, 934 F.2d 1127. This entitled the OTS to costs under the applicable statutes.² Subsequently, on July 26, 1991, FSC filed its Chapter 11 petition in the United States Bankruptcy Court. Thus, FSC's liability for costs was a prepetition debt, which was subject to the automatic bankruptcy stay.

OTS urges this court for leave to move the Bankruptcy Court to lift the stay. The court will deny OTS's request. The defendant had 30 days after the dismissal of this case within which to file its bill of costs. See D. Kan. Rule 219. OTS knew FSC had filed its...