In re Adell, 9:03-BK-23684-ALP.

• Decision Date: 11 July 2005
• Docket Number: No. 9:03-BK-23684-ALP.,9:03-BK-23684-ALP.
• Citation: 328 B.R. 850
• Parties: In re Kevin ADELL, Debtor.
• Court: U.S. Bankruptcy Court — Middle District of Florida

328 B.R. 850

In re Kevin ADELL, Debtor.

No. 9:03-BK-23684-ALP.

United States Bankruptcy Court, M.D. Florida, Fort Myers Division.

July 11, 2005.

Bodman, Longley & Dahling, LLP, Detroit, MI, Dawn A. Carapella, Trenam, Kemker, Scharf, Barkin, et al., Roberta A. Colton, Barbara A. Hart, Asher Rabinowitz, Ruden McClosky, Tampa, FL, for Debtor.

ORDER ON CREDITOR JOHN RICHARDS HOMES BUILDING COMPANY, L.L.C.'S RENEWED MOTION FOR RELIEF FROM THE AUTOMATIC STAY AS TO THE GARNISHMENT ACTIONS AGAINST STN.COM, INC. AND ADELL BROADCASTING CORP.

(Doc. No. 641)

ALEXANDER L. PASKAY, Bankruptcy Judge.

THIS IS the next chapter and most likely not the last in this seemingly endless litigation between John Richards Homes Building Company L.L.C. (JRH) and Kevin Adell (the Debtor) and more precisely between JRH and STN. Com, Inc. (STN) and Adell Broadcasting Corp. (ABC). JRH in its Motion seeks relief from the automatic stay for the limited purpose to be authorized to proceed against STN and ABC.

The factual background relevant to the issues raised by the Motion for Reconsideration can be summarized as follows:

On November 14, 2003, the Debtor filed his Chapter 11 case in this Court after the United States Bankruptcy Court for the Eastern District of Michigan (Michigan Bankruptcy Court) entered a Sanction Award against the Debtor in the amount of $6,413,230.68. In order to collect on this Sanction Award, JRH served a Writ of Garnishment on the Debtor's employers, STN and ABC.

On January 22, 2004, the Debtor commenced an Adversary Proceeding (Case No. 04-032) and in his Complaint the Debtor sought injunctive relief, specifically to prohibit JRH from pursuing its garnishment action against STN and ABC.

On March 23, 2004, this Court entered an Order and granted the Debtor's Motion to Abate Adversary Proceeding pending a determination by the Michigan Bankruptcy Court as to whether or not the automatic stay applies to the garnishment proceeding filed by JRH.

On June 9, 2004, the Michigan Bankruptcy Court, relying on the case of In re Feldman, 303 B.R. 137 (Bankr.E.D.Mich.2003), entered its Order. The Michigan Court in its Order, citing In re Feldman, stated, "It is simply irrelevant whether the creditor's postpetition act to obtain a judgment against the employer is an act to collect on the employer's liability. The relevant question under § 362(a) is whether that act is an act to collect the debtor's liability. Surely the answer to that question is yes, that act is an act to collect on the debtor's prepetition debt." Id. at 139. Thus, the Michigan Bankruptcy Court concluded that the action against STN and ABC would be a violation of the automatic stay and the automatic stay applies.

On October 15, 2004, this Court entered an Order on a Motion for Relief from the Automatic Stay (Doc. No. 447). In its Order, this Court rejected the proposition urged by JRH that its claim against STN and ABC is a stand-alone independent obligation of these entities separate and apart from its claim against the Debtor and, therefore, not protected by the operation of the automatic stay. This Court found that the Michigan Bankruptcy Court already ruled that the garnishment proceeding is subject to the automatic stay and that the decision of the Michigan Bankruptcy Court is correct and, therefore, the Motion to lift the automatic stay was denied.

In the present instance counsel for JRH again contends that the automatic stay does not apply to the garnishment proceeding because JRH seeks recovery from STN and ABC on the basis of a certain Michigan Statute which imposes liability on a garnishee who responds to the writ and, furthermore, who falsely states that it has no claim against the judgment debtor or holds no funds which belong to the judgment debtor. Counsel for JRH urged that he only seeks limited...