In re Stephen W. Grosse, PC
| Decision Date | 08 April 1988 |
| Docket Number | 83-01695 and 83-01696,Bankruptcy No. 83-01694G,83-01693,Adv. No. 84-0297G. |
| Citation | 84 BR 377 |
| Parties | In re STEPHEN W. GROSSE, P.C. t/a Martin Gorman Dental Pavilion, Germantown Dental Pavilion, Dental Pavilion Dental Dimensions, Dental Dimensions South Street Prof Bldg., Associated Dental Group, Ltd., Barry A. Dubin, DDS and Assoc., Stephen W. Grosse, P.C. Dental Pavilion, Germantown Dental, Girard Dental, Market Street Dental Pavilion, Market Dental, Debtors. Barry A. DUBIN, Plaintiff, v. Frank A. JAKOBOWSKI, Esquire, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
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Myron Bloom, Steven D. Usdin, Adelman Lavine Gold & Levin, Philadelphia, Pa., for plaintiff, Barry A. Dubin.
Lawrence T. Phelan, Philadelphia, Pa., for defendant Frank Jakobowski.
Frank M. Jakobowski, Philadelphia, Pa., pro se.
The threshold issue before me for determination is whether the defendant, as attorney for a creditor of the plaintiff, violated the automatic stay and/or an order of this court. If the answer to that question is yes, I must determine the appropriate measure of damages. Pursuant to Bankr. Rule 7052, I make the following findings of fact and conclusions of law:
FINDINGS OF FACT
1. The plaintiff, Dr. Barry A. Dubin ("Dubin") is a dentist who filed a voluntary petition in bankruptcy on April 20, 1983.
2. The defendant, Mr. Frank Jakobowski ("Jakobowski") was attorney for Robert Wolk ("Wolk"), a judgment creditor of Dubin. Wolk held a judgment against Dubin, emerging from Dubin's responsibility for a debt of one of his former partners, in the total amount of $3,208.00.
3. Dubin did not list his debt to Wolk on his bankruptcy schedules and did not list Wolk on his mailing matrix.
4. On January 23, 1984, subsequent to the bankruptcy filing, Wolk, by his attorney, began garnishment proceedings by attaching Dubin's business bank account. As of that date neither Wolk nor Jakobowski had notice of Dubin's bankruptcy filing.
5. On January 30, 1984, Dubin's attorney notified Jakobowski by letter and telephone of the existence of Dubin's bankruptcy. Dubin's attorney requested that Jakobowski dissolve the writ of execution.
6. At some point on or after January 30, 1984, Jakobowski told Dubin's attorney that he believed that Wolk was under no obligation to dissolve the writ because Wolk had not been listed as a creditor on Dubin's bankruptcy petition.
7. On February 3, 1984, Dubin's attorney filed a motion for contempt against Wolk in this court. On February 27, 1984,1 at the hearing on the motion, Wolk appeared without counsel. Former Chief Judge Goldhaber heard testimony and entered an order holding Wolk in contempt and ordering in terrorem damages of $200.00 per day for every day beyond March 2, 1984 for which Wolk did not cause the writ to be dissolved.
8. On or about March 1, 1984, Wolk informed the court and counsel for Dubin by letter that he had requested that Jakobowski dissolve the writ and that Jakobowski had refused. Jakobowski testified that although Wolk had informed him of Judge Goldhaber's February 27, 1984 order, Wolk never asked him to dissolve the writ. (N.T. 4/15/87 pp. 86-92).
9. On March 28, 1984, the instant adversary proceeding was filed by Dubin against Jakobowski individually. The complaint sought injunctive relief and damages.
10. Subsequently, on April 26, 1984, a hearing was scheduled on Dubin's motion for injunctive relief. Jakobowski failed to appear and Judge Goldhaber entered a preliminary injunction directing Jakobowski to immediately dissolve the writ. Jakobowski testified in this proceeding that he was precluded from appearing at the hearing because he was testifying on the same day as an expert witness in another matter pending in this courthouse. (N.T. 1/15/87 p. 73).
11. On May 4, 1984, Jakobowski filed a notice of appeal of the order granting a preliminary injunction together with a motion for stay pending appeal. Judge Goldhaber granted a stay pending appeal conditioned upon posting of a bond in the amount of $10,000.00. Apparently, such bond was later posted.
12. Without obtaining relief from the automatic stay, on June 6, 1984 Jakobowski filed a petition for supplementary relief in aid of execution concerning the Wolk judgment against the debtor in the Philadelphia Court of Common Pleas. That petition was subsequently denied.
13. On February 8, 1985, Chief Judge Fullam of this district affirmed Judge Goldhaber's order of April 26, 1984, which required Jakobowski to dissolve the writ.
14. On February 26, 1985, Jakobowski filed a praecipe dissolving the writ of execution without informing Dubin, his counsel or the court of his action.
15. Subsequently, because he was unaware that the writ had been dissolved, Dubin's counsel requested and Judge Goldhaber granted an order declaring the writ to be null and void.
16. The bank account subject to Wolk's writ of execution held Dubin's working capital as of the date his bankruptcy petition was filed. From the date on which the account was frozen until June 17, 1985, when Judge Goldhaber ultimately declared the writ null and void, Dubin made regular attempts to withdraw funds from the account and was precluded from doing so by the existence of the writ.
17. At all times relevant to this action, Jakobowski was aware that he alone could dissolve the writ. (N.T. 4/15/87 pp. 86, 92). From January 30, 1984, Jakobowski had knowledge of the existence of the automatic stay as it applied to Dubin and to property of Dubin's bankruptcy estate. From, at least February 27, 1984, when Judge Goldhaber ordered Wolk to have the writ dissolved or face contempt sanctions, Jakobowski was aware of his responsibility to dissolve the writ.2
18. By failing to dissolve the writ after February 27, 1984, Jakobowski made a deliberate and willful choice to violate the automatic stay. Additionally, by subsequently filing a petition for supplementary relief in aid of execution in state court, Jakobowski further deliberately and willfully violated the automatic stay.
19. Dubin testified that he appeared in this court in this matter on nine dates between 1984 and 1987 and on each date he was forced to cancel numerous dental appointments. In each case however, the appointments were rescheduled. (N.T. 4/15/87 pp. 4, 7, 51-52). Thus, Dubin did not suffer any lost income due to cancelled appointments by reason of his appearances in court.
20. Dubin's payroll during the pendency of this action was approximately $700.00 for a six day work week. On those days when Dubin appeared in court, he had to cancel all appointments but nevertheless pay his employees. (N.T. 4/15/87 pp. 6-7). The wages which Dubin had to pay on nine days when his office was effectively closed by his absence to appear before the court in this matter constitute $1,050.00 and are an appropriate element of compensatory damages.
21. Dubin failed to establish that a security deposit required by his landlord was caused by Jakobowski's actions or that he was harmed by the requirement insofar as the deposit is refundable.
22. Dubin failed to establish that a less favorable credit arrangement with his advertising agency was caused by Jakobowski's actions or that he was harmed by having to pay cash rather than credit to the agency.
23. Dubin failed to establish that a less favorable arrangement with his dental lab or with the telephone company was caused by Jakobowski's actions.
24. Dubin testified that his emergency need for working capital required him to agree to compromise $6,500.00 in accounts receivable for $4,000.00. No testimony was presented, however, about Dubin's average return3 on accounts receivable so that it is difficult to assess the degree to which Dubin was injured by the compromise. I find that Dubin lost approximately $1,500.00 by compromising accounts receivable on an emergency basis and that such amount is an appropriate measure of compensatory damages.
25. Dubin was precluded from using the approximately $4,500.00 in his bank account during the period of Jakobowski's violation of the automatic stay. However, no evidence was offered indicating that Dubin did not receive interest on the account for any period or that he was otherwise injured by loss of the use of money.
26. As of the date of trial in this case, Dubin's attorney fees and costs could not be fully computed. Consequently, I will allow Dubin 15 days to file a motion in conformity with the standards set forth in In re Fine Paper Litigation, 751 F.2d 562 (3rd Cir.1984) and In re Meade Land & Development Co., 527 F.2d 280 (3rd Cir. 1975) for attorney's fees and costs.
27. Because attorneys fees and costs in this case will amount to a significant sum, an additional award of punitive damages is unnecessary to deter Jakobowski from future misconduct and to punish him for his conduct in this case.
28. Dubin failed to establish that Jakobowski was in contempt of a court order other than the automatic stay insofar as an appeal of the order in question was taken and a stay pending appeal was entered. Upon resolution of the appeal unfavorably to Jakobowski, he took the steps required to dissolve the writ. Failure to notify Dubin or this court of dissolution of the writ is not itself actionable as contempt of the court order where the order by its terms did not require notice.
1. This court has jurisdiction over this adversary proceeding as a core matter pursuant to 28 U.S.C. § 157(b)(2)(A) insofar as it relates to enforcement of the automatic stay and orders duly entered by this court.4
2. Jakobowski deliberately and willfully violated the automatic stay by failing to dissolve the writ of execution on Dubin's business bank account after February 27, 1987, and by filing a state court pleading in aid of execution with knowledge of the existence of the stay. Jakobowski's conduct...
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