In re Herrera, Bankruptcy No. 96 B 02069.
| Decision Date | 28 March 1996 |
| Docket Number | Bankruptcy No. 96 B 02069. |
| Parties | In re Anthony L. HERRERA and Angeline Herrera, Debtors. |
| Court | United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois |
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Gerald Mylander, Chicago, IL, for Jack McCullough, Chapter 13 Trustee.
Angeline Herrera, Westmont, IL, pro se.
Jennifer Prager Sodaro, P.C., Oak Brook, IL, for Town of Cicero.
Jack McCullough, Chapter 13 Trustee.
Anthony Herrera, Westmont, IL, pro se.
Michael L. Flynn, Business Legal Service, Inc., Downers Grove, IL, for William M. Miller.
This matter comes before the Court on the motion of Jack McCullough, the Chapter 13 Standing Trustee (the "Trustee"), to dismiss this case with a request for a bar to refiling under 11 U.S.C. § 109(g)(1), and on the motion of Anthony and Angeline Herrera (collectively the "Debtors") for a finding of a willful violation of the automatic stay under 11 U.S.C. § 362(a) against the Town of Cicero, Illinois, William M. Miller ("Miller"), and his attorney Michael Flynn ("Flynn"), seeking an award of actual and punitive damages, costs, and attorneys' fees pursuant to 11 U.S.C. § 362(h). For the reasons set forth below, the Court hereby grants the motion of the Trustee and dismisses this Chapter 13 case pursuant to § 109(g)(1). In addition, the instant case is dismissed with prejudice pursuant to 11 U.S.C. § 349(a) and the Debtors are prohibited from filing another bankruptcy case for a period of one year from the entry of this Opinion and Order on the docket. The Court denies the motion of the Debtors and holds that the Town of Cicero's actions are excepted from the automatic stay pursuant to 11 U.S.C. § 362(b)(4). The Court also denies the Debtors' motion as to Miller and Flynn. Additionally, the Court denies the Debtors' request for a default judgment against Miller and Flynn.
Further, the Court finds that Anthony Herrera has engaged in the unauthorized practice of law by preparing, filing, signing, and arguing various pleadings on behalf of his wife, Angeline Herrera contrary to 11 U.S.C. § 110(k). The Court strongly cautions Anthony Herrera against continuing to engage in this activity for her or anyone else.
The Court has jurisdiction to entertain these motions pursuant to 28 U.S.C. § 1334(b) and Local General Rule 2.33(A) of the United States District Court for the Northern District of Illinois. They are core proceedings under 28 U.S.C. § 157(b)(2)(A) and (O).
The Debtors filed the instant Chapter 13 case on January 25, 1996. This case is the Debtors' fourth Chapter 13 filing in less than a year. The case files contain papers which show that Miller is a secured creditor of the Debtors, although not so scheduled in this case. The Debtors executed a promissory note in the amount of $52,547.74 with Midwest Bank of Hinsdale, which was subsequently assigned on September 23, 1993 to Miller. The Debtors executed a mortgage in favor of Miller, which secured the note. On November 19, 1993, Miller filed a foreclosure proceeding against the Debtors in the Circuit Court of Cook County with respect to property commonly known as 3234 South 49th Avenue, Cicero, Illinois (the "Cicero Property"). Thereafter, on March 20, 1995, Miller was granted an order appointing him as mortgagee in possession.
Simultaneous to the foreclosure proceeding in Cook County, Miller filed a forcible entry and detainer action against the Debtors in the Circuit Court of the Eighteenth Judicial Circuit, DuPage County, Illinois with respect to property known as 213 South Adams, Hinsdale, Illinois (the "Hinsdale Property"). On March 22, 1995, Miller received an order of possession for the Hinsdale Property and a monetary judgment in the sum of $15,000.00 for unpaid rent due and $2,000.00 in attorney's fees. Consequently, Miller is also an unsecured creditor of the Debtors and is so scheduled, but as holding unliquidated and disputed claims in unknown amounts.
Subsequently, after the Debtors filed three post-trial motions, and the state court denied the motions, an eviction proceeding was scheduled for May 18, 1995. Prior to the completion of the eviction, Anthony Herrera (represented by an attorney) filed the first Chapter 13 case (95 B 10098) on May 18, 1995. The case was filed solely by Anthony. The Town of Cicero and Miller were scheduled as creditors. Miller was represented by Flynn. On June 2, 1995, Miller was granted relief from the automatic stay with respect to the Hinsdale Property. This case was subsequently dismissed pursuant to 11 U.S.C. § 1307(c)(1) and (4) on August 25, 1995, on the Trustee's motion because of Anthony's failure to attend the scheduled 11 U.S.C. § 341 meeting and failure to make any plan payments to the Trustee and comply with 11 U.S.C. § 1326(a)(1). Anthony's plan proposed to pay his creditors 100% of their allowed claims in 36 months through monthly installment payments of $505.00.
The second Chapter 13 case (95 B 11561) was filed pro se by Angeline Herrera on June 8, 1995, while Anthony's first case was pending. This second case was filed prior to another eviction proceeding scheduled by Miller on the Hinsdale Property for June 8, 1995. Miller, represented by Flynn, received partial relief from the automatic stay. On June 30, 1995, Angeline's case was ordered to be jointly administered with Anthony's case. Angeline's case was dismissed pursuant to § 1307(c) on July 14, 1995, on the Trustee's motion for Angeline's failure to timely file a plan and schedules as respectively required by Federal Rules of Bankruptcy Procedure 3015(b) and 1007(c). No payments were made by her pursuant to § 1326(a)(1) with the result that no dividends were paid to any creditor in this case, like Anthony's first case.
Thereafter, a third Chapter 13 case (95 B 18825) was filed pro se by both Debtors on September 11, 1995, seventeen days after dismissal of Anthony's first case. The Debtors, without explanation, did not list Miller as a secured creditor with regard to the Cicero Property or as an unsecured creditor with respect to the Hinsdale Property. Miller, again represented by Flynn, sought relief from the stay.1 This third case was dismissed on January 19, 1996 pursuant to § 1307(c)(5) on the Trustee's motion for denial of confirmation of that plan on December 22, 1995. The joint plan filed in the third case was an obvious photocopy of the same plan filed in the first case. Anthony signed same and merely covered over the name and address of the attorney who represented him in the first case. No money was received by the Trustee from the Debtors in this case.
The instant case (96 B 02069) was filed by both Debtors on January 25, 1996, six days after dismissal of the third case. On February 9, 1996, the Debtors filed a plan and accompanying schedules and a statement of financial affairs. The plan proposes to pay creditors' claims in 60 monthly installments of $275.00. This plan is merely a photocopy of the plans filed in the first and third cases with changes only to the term and monthly payments proposed. To date, the Court has not held a confirmation hearing. Moreover, apparently no pre-confirmation plan payments pursuant to § 1326(a)(1) have been received by the Trustee or by Miller.
The Debtors filed their pending motion for a finding of a willful violation of the automatic stay against the Town of Cicero, Miller, and Flynn. The Debtors allege that the Town of Cicero has violated the automatic stay of § 362(a) by attempting to force entry into the Cicero Property. On February 15, 1996, the Circuit Court of Cook County, Illinois, entered an order requiring the Debtors to allow an inspection of the Cicero Property to take place on February 20, 1996. Instead of allowing the inspection on that date, the Debtors filed the instant "emergency" motion, now represented by Anthony Herrera of "Anthony L. Herrera & Associates, PC Bankruptcy Petition Preparer Pro-se." The Debtors contend, among other things, that the actions of the Town of Cicero violate the automatic stay and do not fall within any exception thereto, in particular § 362(b)(4), because its actions were not taken to protect lives, health, morals, or the general welfare. Further, in a rambling and confused reply to the Town of Cicero's response to the motion, the Debtors allege that Miller and Flynn are utilizing the Town of Cicero as their agent to somehow circumvent the automatic stay.2
First, the Court will address the Debtors' motion with respect to the Town of Cicero. The Debtors claim the Town of Cicero violated the automatic stay by attempting to gain access to the Cicero Property to inspect it. The automatic stay of § 362 arises as a matter of law upon the filing of a petition for relief under the Bankruptcy Code. 11 U.S.C. § 362(a). The automatic stay prohibits "any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case. . . . 11 U.S.C. § 362(a)(6). The automatic stay remains in force even after the confirmation of a Chapter 13 plan until the case is closed or dismissed, or until the discharge is granted or denied. 11 U.S.C. § 362(c)(2); In re Ziegler, 136 B.R. 497, 499 (Bankr.N.D.Ill.1992); Littke v. Trustcorp Mortgage Co. (In re Littke), 105 B.R. 905, 909 (Bankr.N.D.Ind.1989). An individual debtor injured by a creditor's willful violation of the automatic stay is entitled to recover his actual damages, including costs and attorneys' fees, and in appropriate circumstances, punitive damages. 11 U.S.C. § 362(h); see also In re Prairie Trunk Ry., 112 B.R. 924, 929 (Bankr.N.D.Ill.1990); In re Prairie Trunk Ry., 125 B.R. 217, 219-22 (Bankr.N.D.Ill.1991), aff'd, Consolidated Rail Corp. v. Gallatin State Bank, 173 B.R. 146 (N.D.Ill.1992).
Section 362(b)(4) excepts...
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