In re Depew, Bankruptcy No. 3-85-00037.
| Decision Date | 17 July 1985 |
| Docket Number | Bankruptcy No. 3-85-00037. |
| Citation | 51 BR 1010 |
| Parties | In re Roger Alan DEPEW, Jill Marvette Depew, Debtors. |
| Court | U.S. Bankruptcy Court — Eastern District of Tennessee |
Richard A. Spivey, Kingsport, Tenn., for debtors.
This is a proceeding upon debtors' motion to hold Dominion National Bank in contempt for violation of the automatic stay imposed by 11 U.S.C.A. § 362(a) (West 1979 and Supp.1985).1 Further, debtors seek the return of or damages for certain personal property which was in an automobile repossessed by the Bank after a petition in bankruptcy was filed.
Pursuant to the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. 98-353, § 362 now provides:
(h) 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.A. § 362(h) (West Supp.1985).
On January 11, 1985, Roger Alan Depew and Jill Marvette Depew filed a joint petition in this court under Chapter 7 of the Bankruptcy Code. Scheduled as a secured creditor is the Dominion Bank, P.O. Box 13287, Roanoke, Virginia, 24041, in the amount of $10,300.00. The security is asserted to be a 1984 Mercury Topaz automobile. On the same date the debtors filed their Statement of Intentions, required by 11 U.S.C. § 521(2)(A), indicating it was their intention to retain the automobile.
On January 16, 1985, pursuant to § 342(a) and Bankruptcy Rule 2002(a)(1), the clerk of this court mailed to all creditors a copy of the court's order for a first meeting of creditors which included the following notice of the automatic stay provisions: "As a result of the filing of the debtors' petition, certain acts and proceedings against the debtor and his property are stayed as provided in 11 U.S.C. § 362(a) and 11 U.S.C. § 366."
On February 8, 1985, the debtors filed a Petition for Contempt alleging that on or about January 31, 1985, agents of Dominion National Bank repossessed the 1984 Mercury Topaz automobile, which also contained various items of personal property belonging to the debtors, in violation of the provisions of the § 362(a) automatic stay.2
On February 14, 1985, the court notified all parties in interest, including Dominion National Bank, that a hearing on the debtors' petition for contempt would be held March 19, 1985, at 11:00 a.m., in the Municipal and Safety Building, Johnson City, Tennessee. The debtors and their attorney appeared; Dominion National Bank did not appear. Nor did Dominion respond to the petition in any respect.
The debtors testified that on the night of January 31, 1985, they parked the 1984 Mercury Topaz automobile in the driveway at their home. At 2:00 p.m. the next day they discovered the car was missing. They called the Sheriff's Department to report the car stolen. They were informed by the Sheriff's Department that the car had been repossessed by the Dominion National Bank and taken to Roanoke, Virginia. They notified their lawyer who advised them to call the Bank. They called the Bank and talked to a Mrs. Willoughby. They informed her they wanted the car back and wanted their personal belongings which were in the car. The debtors were told the Bank would not release the car. When the debtors asked where the car was they were told it was in Kingsport. They asked to speak to the Bank manager and were told the same thing.
The debtors testified that they had previously received telephone calls from the Bank asking them to take the car to Kingsport Motors. The caller told them that they had taken bankruptcy but that they couldn't file bankruptcy on the car.
Introduced as an exhibit is a Notice of Repossession from American Lenders Service Company, Asheville, North Carolina, dated January 31, 1985, addressed to Roger A. Depew, stating that pursuant to the "State Vehicle Code" the 1984 Mercury had been repossessed for the legal owner, Dominion Bank, Roanoke, Virginia. Also included in the Notice of Repossession is a form Notice of Disposition of Personal Property stating that the personal property which was in the vehicle at the time of repossession is "now stored at the above location." The notice further states that the property may be picked up on weekdays from 9:00 a.m. until 5:30 p.m., and that at the expiration of five days the property "will be liquidated according to the appropriate provisions for such in the State Civil Code."
No "above location" is shown, however.3 Nor is there any indication as to which State Civil Code is involved.
The notice also states that a report has been filed with the County Sheriff's Department at Kingsport, Tennessee.
Subsequent to the hearing on March 15, 1985, the court notified all parties in interest, including the Dominion Bank, that a hearing would be held on May 14, 1985, at 10:00 a.m., in Johnson City, Tennessee, to determine the amount of damages to be assessed against the Bank. Again the debtors and their attorneys appeared, and again the Bank failed to respond or to appear.
At the hearings on March 19 and May 14, the debtors testified that the following items of personal property had been in the automobile when it had been repossessed by the Dominion Bank or its agents:
Under the former Bankruptcy Act and former Bankruptcy Rule 920, a bankruptcy referee had limited remedial and punitive contempt powers. Subsequently, under the Bankruptcy Code and 28 U.S.C.A. § 1481 (repealed 1984) the contempt powers of the Bankruptcy Judge were expanded. See generally 1 Collier on Bankruptcy ¶ 3.018c (15th ed. 1985). However, in enacting the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. 98-353, Congress failed to reenact § 1481. See 28 U.S.C.A. § 1481 (West Supp.1985). Thus, there is presently no specific statutory delineation of the bankruptcy court's contempt powers.
However, under the current law "the bankruptcy judges in regular active service shall constitute a unit of the district court to be known as the bankruptcy court for that district." 28 U.S.C.A. § 151 (West. Supp.1985). Unquestionably, federal district courts have "inherent power to enforce compliance with their lawful orders through civil contempt." Shillitani v. United States, 384 U.S. 364, 370, 86 S.Ct. 1531, 1535, 16 L.Ed.2d 622 (1966).
Under the 1984 amendments the district court "may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district." 28 U.S.C.A. § 157(a) (West Supp.1985). Pursuant to such referral by Standing Order of the United States District Court for the Eastern District of Tennessee, entered on July 11, 1984, this court "may hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11, referred under subsection (a) of this section, and may enter appropriate orders and judgments" subject to appellate review. 28 U.S.C.A. § 157(b)(1) (West Supp.1985).
Thus, the determinative inquiry is whether a contempt proceeding to assess damages under § 362(h) constitutes a "core proceeding" within the meaning of § 157(b)(1).4 This court is well satisfied that such a proceeding is a core proceeding arising under title 11.
The term "core proceeding" is not explicitly defined by the 1984 legislation. In Northern Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) the plurality observed that "the restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, must be distinguished from the adjudication of state-created private rights." 102 S.Ct. at 2871.5
The key function of the core-noncore distinction is to separate proceedings in which non-Article III Bankruptcy Judges may properly exercise broad powers from those proceedings in which they are required by the Constitution to exercise only limited powers. The Supreme Court held in the Northern Pipeline decision that non-Article III judges may properly exercise broad powers in the adjudication of congressionally created rights, but may exercise only limited powers in the adjudication of state-created rights.
Carlson, Distinguishing Core From Non-core Proceedings, 1 Norton Bankruptcy Law Advisor 1, 2 (Jan.1985).
Thus, "core proceedings include all proceedings in which the right to relief is created by Title 11." Carlson, supra, at 3.
Insofar as the meaning of the phrase "arising under" is concerned, the legislative history of 28 U.S.C.A. § 1471 (repealed 1984) provided:6
The phrase "arising under" has a well defined and broad meaning in the jurisdictional context. By a grant of jurisdiction over all proceedings arising under title 11, the bankruptcy courts will be able to hear any matter under which a claim is made under a provision of title 11. For example, a claim of exemptions under 11 U.S.C. 522 would be cognizable by the bankruptcy court, as would a claim of discrimination in violation of 11 U.S.C. 525. Any action by the trustee under an avoiding power would be a proceeding arising under title 11, because the trustee would be claiming based on a right given by one of the sections in subchapter III of chapter 5 of title 11.
H.R.Rep. No. 595, 95th Cong., 1st Sess. 445, reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5963, 6401.
The debtors' right to the automatic stay under § 362 and their right to damages under § 362(h) for violation of the stay are congressionally created rights under title 11 as much as are avoidance powers or a § 525 discrimination claim. As the legislative...
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