In re Addleman
| Decision Date | 02 November 2018 |
| Docket Number | Case No. 17-16032 |
| Parties | In re: SUSAN ADDLEMAN, Debtor. |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
The court incorporates by reference in this paragraph and adopts as the findings and orders of this court the document set forth below. This document was signed electronically on November 2, 2018, which may be different from its entry on the record.
MEMORANDUM OF OPINION1
Susan Addleman filed bankruptcy to get back the car she desperately needed. But the used car dealer, Loudon Motor Sales, LLC ("Loudon Motor"), refused to return her car and later sold it to a third party. For the reasons that follow, the Court finds that Loudon Motor willfully violated the automatic stay and orders Loudon Motor to pay the debtor $18,603 in actual damages, including $2,625 in attorney's fees, plus $25,000 in punitive damages by November 30, 2018.
This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (O). The Court has jurisdiction over core proceedings under 28 U.S.C. §§ 1334 and 157(a) and Local General Order 2012-7 of the United States District Court for the Northern District of Ohio.
The procedural history of the debtor's bankruptcy is intertwined with the relevant facts needed to resolve this contested matter. Therefore, the Court will recount the procedural history as part of a chronological recitation of the facts below.
The findings of fact contained in this memorandum of opinion reflect the Court's weighing of the evidence, including the credibility of the debtor, the only witness who testified at the evidentiary hearing held on October 4, 2018. Although the attorney of record for Loudon Motor appeared at the evidentiary hearing, he put on no witnesses and offered no exhibits. Even if not specifically mentioned in this decision, the Court considered the testimony of the witness, exhibits admitted into evidence, and any stipulations. Unless otherwise indicated, the following facts were established at the hearing by a preponderance of the evidence.
In the summer of 2015, the debtor needed a car because her current lease was ending. The debtor had poor credit so her boss, attorney Patrick O'Malley, introduced her to Walter Loudon of Loudon Motor to help her get a replacement car despite her financial history. On the same day they were introduced, the debtor entered into an agreement with Loudon Motor to purchase a 2007 Ford Mustang. The debtor agreed to pay $2,000 down and $318.62 per month for 36 months. The certificate of title issued on June 24, 2015, indicates a purchase price of $9,750 and tax of $780. It identifies the owner as Susan A. Addleman and the previous owner as Loudon Motor Sales, LLC.
A few months after the debtor purchased her car from Loudon Motor, the employment relationship between the debtor and attorney O'Malley ended. For reasons unknown to the Court, when the employment relationship ended, attorney O'Malley told the debtor that she must return her car to Loudon Motor; however, Walter Loudon told the debtor that she could keep her car, as she was current on her payments. Nevertheless, in September 2015, after the debtor was three days late in making a payment, Loudon Motor repossessed the debtor's car for the first time. The debtor paid $2,500 to Loudon Motor to get her car back.
The debtor continued to make regular payments to Loudon Motor through the summer of 2017. Loudon Motor never sent the debtor any written statements indicating the balance remaining on her car loan. On several occasions, the debtordid receive a balance figure by text message from Walter Loudon in response to her many requests. At all times, the debtor dealt with Walter Loudon on behalf of Loudon Motor. In the summer of 2017, Walter Loudon informed the debtor that $122 was the remaining balance owed on her car. Although Walter Loudon disagreed at his deposition that the balance due was only $122, asserting that the amount in his text message was in error, Loudon Motor failed to offer any evidence of its own at the evidentiary hearing. Therefore, the Court finds by a preponderance of the evidence that the balance remaining as of October 11, 2017, was $122.
For whatever reason, Loudon Motor repossessed the debtor's car for a second time on Saturday, October 7, 2017. On Monday, October 9, 2017, the debtor offered to pay $900 to regain possession of her car; however, Walter Loudon refused to speak with her.
The time of the second repossession was a particularly difficult time for the debtor. The debtor's teenage son had been physically attacked and threatened, and was dealing with serious mental health issues as a result. Although the debtor had previously shared a home with her boyfriend, the debtor moved out of the boyfriend's home after he failed to be supportive of her son. The debtor and her son began staying with friends or the debtor's daughter. If the debtor could not find a place for her and her son to stay at night, she would insist that her son staywith his father while the debtor slept at a hotel, a homeless shelter, or in her car. Although she was temporarily staying with her daughter to help her daughter recover from surgery, the debtor was primarily living out of her car when it was repossessed for the second time. The debtor's car contained many of the debtor's personal belongings, including license plates, clothes, a fax machine, phones, and important documents such as her birth certificate and social security card.
The debtor filed bankruptcy on Wednesday, October 11, 2017, four days after the second repossession. On the same day that she filed bankruptcy, the debtor texted both Walter Loudon and attorney O'Malley to notify them of her bankruptcy filing. The debtor's text to Walter Loudon stated:
Hi mr. Loudon this is Susan addleman I have filed bankruptcy and named you as a creditor the case number is 17-16032 a relief ordered you are being instructed not to dispose of the car or any of the belongings contents in the car if you do you will be held in contempt of a federal court order I have also forwarded your attorney Patrick O'Malley who will not speak to me . . . .
Walter Loudon admitted in his deposition that he received this text. Attorney O'Malley sent the debtor the following text message in response:
I have kindly asked you not to text me or my client. I will only talk with an attorney who is representing you. If you keep this up I will file a telecommunications harassment complaint . . . .
The debtor continued her own unsuccessful efforts to get the car back, including repeatedly calling and texting attorney O'Malley.
During the two months after filing the debtor's bankruptcy, the debtor's attorney did not contact Loudon Motor or attorney O'Malley or file a motion seeking assistance from the Court. On December 13, 2017, the debtor's attorney filed a motion to return possession of the debtor's car, which was set for a hearing on January 9, 2018. On January 2, 2018, the debtor's attorney also filed a motion to redeem the car, but he later withdrew this motion.
On January 9, 2018, the Court marked the debtor's motion for an order to return the debtor's car as "no response, granted," but the debtor's attorney did not submit an acceptable proposed order until January 30, 2018. The Court signed and entered the order on February 1, 2018.
On February 2, 2018, the debtor took a certified copy of the Court's order to the Canton used car location of Loudon Motor, 2001 Whipple Avenue NW, Canton, Ohio 44708. The local police also arrived at the location with the debtor. While there, someone pulled a car up to the side door that the debtor believed was her car; however, she was not allowed to get close enough to read the vehicle identification number. Someone on the lot then referred her to another Loudon used car lot in Alliance, Ohio.
While taking an Uber to the used car lot in Alliance, the debtor attempted to contact Walter Loudon. Walter Loudon answered his phone and demanded to know how much money the debtor had to pay him. After the debtor stated sheonly owed $122 and reminded him that she had offered to pay him $900 on the Monday following the repossession, Walter Loudon hung up the phone.
The debtor arrived at the used car lot in Alliance and similarly requested the presence of the Alliance police. The debtor's car was not at the used car lot in Alliance, and a police officer unsuccessfully attempted to contact Walter Loudon. A few days later, the police officer informed the debtor that Loudon Motor had sold her car.
On January 27, 2018, a related Loudon entity owned by Walter Loudon's son, Gregory D. Loudon, signed a contract to sell the 2007 Ford Mustang to a third party for $6,244.97. The contract appears to have been signed by Gregory D. Loudon. As of the date of this contract, the 2007 Ford Mustang was still titled in the debtor's name. It is unclear when the third party took possession of the 2007 Ford Mustang; however, neither Loudon Motor nor anyone acting on behalf of Loudon Motor ever released the lien on the debtor's certificate of title or obtained a new certificate of title in its own name to the 2007 Ford Mustang until March 13, 2018. Also on March 13, 2018, someone transferred title of the 2007 Ford Mustang from Loudon Motor to the third party purchaser. In other words, on January 27, 2018, the related Loudon entity sold a car for which it held no certificate of title. On March 13, 2018, that same related entity then transferred title from the debtor to a third party with actual knowledge of both the debtor'spending bankruptcy and the Court's February 1, 2018, order to return the debtor's car, based on the debtor's visit to the Loudon used car lot in Alliance on February 2, 2018.
On March 9, 2018, the debtor filed a motion requesting that the Court order Loudon Motor to show cause for violating the automatic stay and failing to obey the Court's order to return the debtor's car. An initial...
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