In re Suh
| Decision Date | 04 May 2018 |
| Docket Number | Case No.: 17-17221-ABA |
| Parties | In Re: Soyong Suh, Debtor. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
NOT FOR PUBLICATION
Chapter: 13
MEMORANDUM DECISION
In a bankruptcy case filed in 2008, Soyong Suh ("Mrs. Suh") and the City of Philadelphia (the "City"), settled a matter regarding the return of two parcels foreclosed on by the City in violation of the automatic stay. They memorialized their agreement in an order executed by the bankruptcy court (the "2010 Consent Order"). The City did not comply with the order, much litigation ensued, and now, nine years later, Mrs. Suh brings a Motion for Contempt in this new bankruptcy case. While the City concedes that it is in contempt for failing to comply with the 2010 Consent Order and further concedes to damages of $94,190.39 ($85,000,00 + $9,190.39),1 it does not agree with Mrs. Suh's demand for additional damages. After an initial hearing, this court scheduled and held a plenary hearing on the damages issues. It was made clear that the plenary hearing was for the purpose of Mrs. Suh presenting all of her damages as a result of the City's contempt. The parties made their arguments, presented evidence, and rested. Then, the parties filed post-hearing memoranda supporting their positions. The matter is now ripe for consideration and the court's task here is to determine the appropriate measure of damages.
This matter before the court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(O), and the court has jurisdiction pursuant to 28 U.S.C. § 1334, 28 U.S.C. § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23, 1984, as amended on September 18, 2012, referring all bankruptcy cases to the bankruptcy court. The following constitutes this court's findings of fact and conclusions of law as required by Federal Rule of Bankruptcy Procedure 7052.
A series of errors made by both parties brings them to the matter now before the court. To better comprehend and address the issues presented, a thorough presentation of facts is required.
It all started on February 14, 2006 when Mrs. Suh's parents deeded to Mrs. Suh and her husband, Charles, three vacant2 lots located at 2145, 2147 and 2149 Federal Street, Philadelphia, Pennsylvania ("2145," "2147," and "2149", respectively, collectively, the "Properties") for $1, as well as an agreement to take care of Mrs. Suh's father for the rest of his life. Ex. D-1; Tr, p. 22;3 Ex. C-11, p. 12. Mrs. Suh is a homemaker and Mr. Suh is a pharmacist. Ex. C-11, p. 6. The family had always treated the Properties as one rather than individual or separate lots. Tr, p.48. They planned to develop the Properties with the help of a friend, and had hired a firm to design residences on the parcels. Ex. C-11, pp. 16-21, 59-60; Tr, p. 49. The Suhs apparently believed that the three lots ran the full block back, possibly house lots with backyards. Instead, the 2149 parcel actually included the backyard of 2147, and a neighbor's adjoining lot included the backyard of 2145. C-11, pp. 54-58. The Suhs received the Properties with real property taxes due and nuisance liens. Ex. C-11, pp. 12, 15; Ex. C-42, Exs. A, F. In March 2008, the City petitioned the Philadelphia County Court of Common Pleas for an order directing the sheriff to sell 2145 and 2147 at sheriff's sale. Doc. No. 18-2, ¶ 10.
Prior to a sheriff sale taking place, Mr. Suh filed a no asset chapter 7 case on July 30, 2008 through attorney David Paul Daniels. Ex. D-7 . Generally, a bankruptcy filing stays the continuation of a judicial, administrative, or other action or proceeding against a debtor and his or her property or to enforce any lien against property of a debtor. See 11 U.S.C.A. § 362(a). Eventually, the chapter 7 trustee abandoned the Properties on September 30, 2008, which abandonment was unopposed. Ex. D-7. Mr. Suh obtained a discharge4 on October 31, 2008 and his case was closed on December 2, 2008. Id.
Despite pendency of the bankruptcy case, on October 15, 2008 the City proceeded to sheriff sale, where it purchased 2145 and 2147 for $800 each. Exs. D-8, D-9. This violated the automatic stay in Mr. Suh's case. See 11 U.S.C. § 362(a)(5), (c)(2)(C). Neither the Suhs nor Mr. Daniels realized the sheriff sale had occurred.
On December 5, 2008, on the heels of her husband's case closing, Mrs. Suh filed a chapter 13 bankruptcy case, Ex. D-10 (Bankr. Case No. 08-34197-JHW) (the "First Chapter 13 Case"), where she proposed a chapter 13 plan that would cure the tax arrears on all the Properties. See Ex. D-12, ¶ 4; Ex. C-11, p. 24 (). Her plan was confirmed on February 26, 2009. Ex. D-10, docket entry #25.
While that case was pending, in May 2009, Mrs. Suh ran a search on the Properties and discovered that the City owned 2145 and 2147. Tr, p. 25.5 On May 7, 2010, Mrs. Suh filed a motion to vacate the sheriff sale based on the violation of the stay in her husband's case. Ex. D-12. This led to the 2010 Consent Order, wherein the parties consented, and the court ordered, in pertinent part, the following:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
The 2010 Consent Order was entered June 7, 2010. The City did not transfer 2145 and 2147 back to the Mrs. Suh. What is more, at no time after 60 days from the order's entry did Mrs. Suh exercise her right to file an order with the Bankruptcy Court vacating the sheriff's sale against 2145 and 2147. The First Chapter 13 Case was dismissed and reinstated several times, and finally dismissed on the trustee's certification of default and over Mrs. Suh's objection. Ex. D-10.
Just over two weeks later, on November 14, 2011, Mrs. Suh filed a new chapter 13 case. Ex. D-15 (Bankr. Case. No. 11-42851-ABA) (the "Second Chapter 13 Case"). She testified that she filed the case "to get the property back again." Tr, p. 29; see Tr, 32, 51. In particular, she testified that she would not have had to file this case had the City returned 2145 and 2147 in 2010. Tr, p. 32.
But this testimony is not credible. Mrs. Suh testified contradictorily that her tax debt at the time of the 2011 filing was not a reason for filing, and that the city tax and other debt was a reason for filing. See Tr, p. 70, 77-78. As she later alleged that her counsel had previously been advised by the City that the sheriff sales had been vacated, Ex. D-37, ¶ 54; Ex. D-47, ¶ 21, at that time she must have believed 2145 and 2147 had been returned. Moreover, the pleadings in the Second Chapter 13 Case, specifically: the Docket; Petition (acknowledging on Schedule A ownership in multiple properties and on Schedule D outstanding taxes owed to the City); Chapter 13 Plan (providing for a cure of a mortgage arrearage on her residence and payment of taxes to the City); Order Confirming Chapter 13 Plan; and the City's proof of claim (evidencing, inter alia, a tax obligation on an additional piece of real property in Philadelphia) reflect that there were actually other reasons why Mrs. Suh filed the Second Chapter 13 Case. See Ex. D-15 and C-42, exs. A, B, D, F.
During the Second Chapter 13 Case, the chapter 13 trustee objected to Mrs. Suh's expenses and held confirmation hearings, the case was dismissed and reinstated, and on November 29, 2012, the plan was confirmed that provided for the cramdown of the City of Philadelphia's tax claims. Exs. C-42, exs. B, D; Exs. D-15, docket entry #38.6 The trustee made payments to two creditors in addition to the City, with the case failing before five unsecured creditors with filed claims were paid anything. Ex. D-26.
On January 17, 2013, the City deeded 2147 to the Philadelphia Redevelopment Authority ("PRA"). Ex. D-34. On February 22, 2013, the PRA sold 2147 along with three other properties, to JBS Renovation ("JBS") for $55,546. Ex. D-18. All deeds contained clauses requiring development of the property within one year of the transfer, else title to the premises could revert at the sole option of the City of Philadelphia (the "Reversionary Interest"). See Exs. D-18, D-34.
The Suhs, and/or their attorney, must have finally realized something was wrong,7 as on March 20, 2013 Mrs. Suh filed a Motion to Compel Turnover of Real Estate, on May 13, 2013 she filed a Motion for Injunctive Relief, and on May 21, 2013 she and her husband filed an Adversary Proceeding8 against the City and JBS. Exs. D-15, D-19 (Adv. Proc. No. 13-1504-JHW).
On June 18, 2013, the court entered an Order Compelling Turnover of Real Estate that provided in pertinent part:
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