In re Sudler
| Decision Date | 30 March 1987 |
| Docket Number | Bankruptcy No. 86-05219S,Adv. No. 86-1342S. |
| Citation | 71 BR 780 |
| Parties | In re Martha SUDLER, Debtor. Martha SUDLER, Plaintiff, v. CHESTER HOUSING AUTHORITY, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Jeffrey M. Edelson, Michael Donahue, Chester, Pa., for debtor.
Ronald David Ashby, Media, Pa., for Chester Housing Authority.
Joseph B. Finley, Jr., Philadelphia, Pa., trustee.
The issues presently before us in these inter-related matters require us to make a very fine determination of a public housing tenant's interest in a continuing tenancy in her public housing unit when her eviction was but a small step away from consummation prior to her bankruptcy filing. However, because the housing authority seeking her eviction did not make this last small step, we hold that the tenant's lease was not terminated at the time of her bankruptcy filing. Thus, the tenant is not only entitled to an injunction preventing her eviction, but also she is entitled to withstand a motion by the public housing authority seeking to obtain relief from the automatic stay on a record upon which relief could be granted only if we deemed the lease to have been terminated at the time of her bankruptcy filing.
The Debtor, MARTHA SUDLER, filed this Chapter 7 bankruptcy case at 9:13 A.M. on November 12, 1986. At 9:07 A.M. on the very next day, November 13, 1986, she filed the adversarial proceeding also before us, naming as Defendant the CHESTER HOUSING AUTHORITY (hereinafter referred to as "the CHA"). AT the time of the filing of the Complaint in the adversarial proceeding, the Debtor filed a Motion for a Temporary Restraining Order (hereinafter referred to as a "TRO") to prevent the CHA from interfering with her continued quiet possession of her public housing unit, contending that the CHA, her landlord, was attempting to lock her out of her unit in violation of the automatic stay, and we granted same.
A hearing on the Debtor's Motion for a Preliminary Injunction requesting the same relief as the TRO on a more permanent basis was originally scheduled on November 18, 1986. However, the parties agreed that the CHA would honor the TRO until the date of a continued hearing, and we ultimately scheduled the hearing on the afternoon of the Friday after Thanksgiving, November 28, 1986.
At the close of the hearing, we immediately announced our intention to grant the Preliminary Injunction, and this was memorialized by an Order of December 1, 1986. However, we made it clear to the Debtor at that time that our decision was based solely upon our finding that she retained a possessory interest in the premises as of the date and time of her bankruptcy filing which was protected by the automatic stay effected by her bankruptcy filing. See 11 U.S.C. §§ 362(a)(2) and (a)(3). Consequently, we cautioned her that her right to continued possession might well end upon the CHA's successful filing of a Motion to obtain relief from the stay, per 11 U.S.C. § 362(d), in her bankruptcy case.
Taking this cue, the CHA filed a Motion for Relief from the Automatic Stay in the Debtor's main bankruptcy case on December 12, 1986. In this Motion, the CHA alleged that the Debtors' lease terminated when she "was legally evicted and ordered by the District Court for the City of Chester to vacate the premises" and that the Debtor was not paying post-petition rent and continuing to occupy the premises. The Debtor filed an Answer denying all of the significant allegations in CHA's Motion, and asserted several affirmative defenses, most notably a claim that the CHA's Motion constituted unlawful discrimination against her by a governmental unit because of her bankruptcy filing, in violation of 11 U.S.C. § 525.
The hearing on this Motion was originally scheduled on January 8, 1987. The final hearing in the adversarial proceeding was originally scheduled on January 20, 1987. The parties mutually agreed to continue the hearings in both matters until February 4, 1987.
On the latter date, the parties' respective counsel appeared and advised us that they wished to have the Court decide both matters on the basis of the record made at the Preliminary Injunction hearing in the adversarial case conducted on November 28, 1986. The Court orally requested, in a directive memoralized by an Order of February 6, 1987, that the parties simultaneously submit Briefs in support of their respective positions on or before February 25, 1987. Ultimately, the parties mutually requested an extension until March 4, 1987, to submit their respective Briefs. They filed these, and the Debtor additionally filed a one-page Reply Memorandum on March 12, 1987.
We believe this to be a close case, turning upon application of finely-worded state law upon a confusing state of facts. It is necessary for us to focus especially intently upon what occurred between the Debtor and the manager of the CHA project in which she resided, John Walker, on November 6, 1986. We therefore carefully reviewed our own voluminous notes made at the trial and listened to the tape recordings of a significant portion of the hearings, particularly the testimony and cross-examination of the Debtor, her now 17-year-old daughter Sonya, and Mr. Walker. From the foregoing, we make the following Findings of Fact.
1. The Debtor is a very low income woman who is the single-parent head of a family including her daughters, Yolanda and La-Vonnia, who were aged nine and six years at the time of the hearing. A teenaged daughter, Sonya, born March 26, 1970, and hence who has just turned seventeen years, resided intermittently with the Debtor and at other times with other relatives during 1986.
2. Since 1984, the Debtor has resided at 402 C Ayers Place, which is a unit in the crime-ridden William Penn "Community" or Housing Project, owned and operated by the CHA.
3. The Debtor's only source of income is public assistance. At the hearing, she testified that her total income was $365.00 monthly welfare benefits.
4. As a public housing authority, the CHA is obliged to adjust its tenants' rents according to their income, pursuant to certain guidelines promulgated by the United States Department of Housing and Urban Development (hereinafer referred to as "HUD"), which subsidizes such projects. See 24 C.F.R., Part 913. The monthly rent of the Debtor for her unit, as of the hearing date, was established at $86.00 monthly.
5. We take judicial notice of the fact that, as a condition for receipt of its subsidies, HUD has imposed certain requirements upon public housing authorities in procedures utilized for termination of the tenancies of its residents. See 24 C.F.F. § 966.4(l). Among these are requirements that such authorities may terminate such tenancies only for certain "good cause" and that public housing authorities must strictly adhere to all applicable state and local laws in evicting tenants whose tenancies they seek to terminate. Id.
6. The Debtor became delinquent in her rental payments, apparently some time in late 1985. Consequently, the CHA commenced a landlord-tenant proceeding against her in the local District Justice of the Peace Court, obtaining a judgment against the Debtor for possession and back rent in the amount of $870.01 on May 2, 1986, solely because she failed to pay her required rent.
7. On August 25, 1986, the Debtor was served with an Order for Possession, pursuant to Pennsylvania Rule of Conduct, Office Standards and Civil Procedure for District Justices (hereinafter referred to as "Pa.R.C.P.D.J.") 517.
8. The Debtor testified that she made some efforts to locate alternative housing, and we take judicial notice of the fact that no comparable housing renting at $86.00 monthly, or any sum proximate thereto, is available in the City of Chester, or in any other situs accessible to the Debtor.
9. On Wednesday, November 5, 1986, Mr. Walker came to the Debtor's unit and advised her that she would be forcibly evicted, pursuant to the Order for Possession, on the following morning.
10. Accordingly, on the morning of Thursday, November 6, 1986, Mr. Walker, a constable from the District Justice of the Peace Court, and several employees of a moving and storage company, Arcade Storage Co., appeared with a truck, and the latter parties began removing the Debtor's personal property from her unit.
11. Of the parties assembled at the eviction scene, Mr. Walker left first. Then the constable left. While the Debtor and her family alone remained on the scene with the Arcade employees, the latter loaded all but the Debtor's food, clothings, and small wall ornaments onto their truck. However, no further actions were taken, physically or symbolically, by either Mr. Walker or the constable or the Arcade Storage employees, to actually compel the Debtor and her family to leave the premises on November 6, 1986. Therefore, after all of the assemblage of persons cited herein left, having no other place to go, the Debtor and her family remained in the premises, sleeping on pads and at some point bringing a television into the unit.
12. Due to the high-crime environment of the William Penn Project, the Debtor, like many other residents, had installed her own lock on her unit's door. No effort was made by any of the parties assembled at the unit on November 6, 1986, to remove the lock placed on the door by the Debtor, or to install any other lock on the premises to prevent the entry into the premises by the Debtor and her family.
13. The Debtor and her daughter Sonya both testified that, on Monday, November 10, 1986, Mr. Walker came to their unit and informed them that they would be locked out if they did not remove themselves by Wednesday, November 12, 1986, further advising that no action would be taken on Tuesday, November 11, 1986, because the CHA offices were closed that day in observation of Veterans Day.
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