In re Cox
| Decision Date | 23 September 1997 |
| Docket Number | Adversary No. 97-00138.,Bankruptcy No. 96-03041-BGC-13 |
| Citation | 214 BR 635 |
| Parties | In re Brian Antoine COX and Katrina Felicia Cox, Debtors. Brian Antoine COX and Katrina Felicia Cox, Plaintiffs, v. BILLY POUNDS MOTORS, INC., Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
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Cheryl Daugherty (Trial Attorney), Suzanne Yaman, Birmingham, AL, for Debtors.
Ronald Thompson, Birmingham, AL, for Billy Pounds Motors, Inc.
David P. Rogers, Jr., Chapter 13 Standing Trustee.
This matter came before the Court on a Complaint for Violation of 11 U.S.C. § 362 filed on April 3, 1997 and an Amended Complaint for Violation of 11 U.S.C. § 362 filed on April 8, 1997. After notice, a hearing was held on June 3, 1997. Brian Antoine and Katrina Felicia Cox, the plaintiff-debtors; Cheryl Daugherty for Suzanne Yayman, the attorney for the plaintiff-debtors; Robert Finch, a representative of Billy Pounds Motors, Inc., the defendant; and Ronald Thompson, the attorney for the defendant, appeared. The matter was submitted on the testimony of Mr. and Ms. Cox and Mr. Finch, other evidence and oral argument.
On February 26, 1996, the debtors purchased a 1987 Nissan Maxima from Billy Pounds Motors, Inc., the defendant. The debtors filed their Chapter 13 petition on May 3, 1996. In that petition, the debtors scheduled a secured debt to the defendant for that automobile. In their plan of reorganization, the debtors proposed to pay the scheduled debt, rather than surrender the automobile. Notice of the bankruptcy filing and the debtors' proposals were sent to the defendant as demonstrated by Court records filed May 10, 1996.
On May 15, 1996, the defendant filed a claim for the automobile debt in the amount of $4,946.54. On June 7, 1996, the defendant filed a Motion for Relief from Automatic Stay but withdrew that motion on June 24, 1996. On June 19, 1996, this Court entered an order confirming the debtors' plan. That order provided that the defendant's claim would be paid in the amount of $4,946.54 with the defendant to receive monthly adequate protection payments of $170.00. On June 20, 1996, the debtors objected to the filed claim. On August 27, 1996, the Court entered an order sustaining the debtors' objection to the defendant's claim and reduced that claim to $4,606.54.
On March 17, 1997, the Chapter 13 trustee, citing a default in payments, filed a Motion to Dismiss the debtors' case. The defendant received a copy of that motion and a notice that the motion would be heard by the Court on April 14, 1997.
On Easter Sunday, March 30, 1997, the defendant repossessed the debtors' Maxima. On April 17, 1997, the Court conditionally denied the trustee's Motion to Dismiss.
On April 3, 1997, the debtors filed the pending complaint for violation of the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(h), seeking compensatory and punitive damages. The defendant answered the complaint and a trial was held before this Court on June 3, 1997.
At the trial on the matter, Mr. Cox, Ms. Cox and Robert Finch, Chief Executive Officer of the defendant, testified. The evidence is uncontroverted. Prior to the repossession, Mr. Cox had interviewed for and was offered a position with Petruccelli's Restaurant located in the Inverness section of metropolitan Birmingham. Mr. Cox accepted that position and gave the required two-weeks notice to his current employer, BellSouth, where he was the company's catering coordinator. Mr. Cox was to report for his new position on the Monday following the repossession. Because he lived in the Woodlawn section of Birmingham, a considerable distance from his new employment, Mr. Cox was required to have reliable transportation. In fact, at the trial, Mr. Cox testified that his new employer explained that they had had prior problems with individuals not arriving on time or missing work and that if he was unable to fulfill that commitment, he would not be retained.
As stated, the car was repossessed on March 30. When Mr. Cox realized that his car was gone, he called the police.1 On the next day he called his new employer to explain that he would not be able to work that first day.
Mr. Cox attempted to find other transportation, but according to his testimony, none was available.2 He sought the use of a cousin's car but it was not operable at the time. He was unable to take public transportation because he did not believe such was available. He testified that he could not afford a taxi.
At the time Mr. Cox called the restaurant, or shortly thereafter, (the testimony is not clear) a representative of the restaurant told Mr. Cox that because of Mr. Cox's failure to report to work, someone else had been hired. Mr. Cox lost his new job and was unable to return to his previous position.
Mr. Cox was to be paid $400.00 per week at his new position. He has, according to his testimony, tried to find other work, but has been unable to do so for the approximately 9 weeks that have passed between the date his car was repossessed and the trial of this matter.
Ms. Cox testified that because of the repossession she was unable to work and that her lost wages were approximately $100.00.
In regards to the automobile, Mr. Cox testified that the car was returned about two weeks after the repossession. Mr. Cox also testified that at the time he received the car, Mr. Pounds (or a representative, the testimony is not clear) apologized for the repossession, asked if there was anything that he could do for the debtors and offered to call Petruccelli's for Mr. Cox if Mr. Cox would like.
At the time Mr. Cox received his car, he signed a general release form, but after reading the form carefully, rescinded the portion of that form relating to the defendant's liability. The defendant agreed, but asked Mr. Cox to maintain the portion of the release relating to the car's condition. That portion of the form is Defendant's Exhibit No. 1 and supports the defendant's position that only the part relating to the car's condition was retained by the defendant. Mr. Finch testified that there was no damage to the car during repossession or while it was in the possession of the defendant. The debtors did not disagree.
The debtors' attorney represented to the Court that her fees for representing the debtor, if calculated on an hourly basis, would be $1,000.00.
Section 1327(b) of the Bankruptcy Code provides that confirmation of a Chapter 13 plan vests all of the property of the estate in the debtor, unless otherwise provided in the plan or in the order confirming the plan. 11 U.S.C. § 1327(b). Neither the plan confirmed in this case on June 19, 1996, nor the order confirming the plan, provides that property of this estate should remain as property of the estate while the plan is being consummated by the debtor, or that property of the estate should not vest in the debtor upon confirmation as otherwise required by section 1327(b). How then is this property affected by the automatic stay of section 362 and an alleged violation of that stay? The simple answer is that the stay applies because the stay operates in favor of both "property of the estate" and "property of the debtor." Regardless of whether the plan or confirmation order impacts certain property, that property is, in this case at least, either property of the estate or of the debtor and is subject to the protections of the automatic stay. An analysis of the pertinent portions of the Bankruptcy Code explains.
Section 362(a)(3) of the Bankruptcy Code provides that the filing of a bankruptcy petition operates automatically as a stay of "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." 11 U.S.C. § 362(a)(3) (emphasis added). Subsection (a)(4) of section 362 provides also that the filing of a bankruptcy petition stays "any act to create, perfect, or enforce any lien against property of the estate." 11 U.S.C. § 362(a)(4) (emphasis added). And subsection (a)(5) of section 362 provides that the filing of a bankruptcy petition stays "any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title." 11 U.S.C. § 362(a)(5) (emphasis added).
Pursuant to subsection (c)(1) of section 362, the stay of an act against property of the estate continues only until such property is no longer property of the estate. 11 U.S.C. § 362(c)(1). However, under subsection (c)(2) of section 362, the stay of any other act described under subsection (a) of section 362, including an act to enforce a pre-petition lien against property of the debtor under subsection (a)(5), continues until the case is closed, or the case is dismissed, or a discharge is granted or denied to the debtor. 11 U.S.C. § 362(c)(2).
This case has not been closed or dismissed. The debtors have neither been granted nor denied a discharge. Therefore, even if the debtors' automobile was, by virtue of 11 U.S.C. § 1327(b), "property of the debtor" following confirmation rather than "property of the estate", the automatic stay forbad repossession of the automobile by the defendant.3
Section 362(h) provides that "an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages." 11 U.S.C. § 362(h). The defendant enforced its prepetition lien by repossessing the debtors' automobile following plan confirmation. This is an act that is specifically prohibited by 11 U.S.C. § 362(a)(5). However, in order for the...
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