Marshall v. Abdoun (In re Marshall)

• Decision Date: 11 February 2020
• Docket Number: Adv. Proc. No. 17-00088-AMC,Bankruptcy No. 15-18921-AMC
• Citation: 613 B.R. 194
• Parties: IN RE Kathylene A. MARSHALL, Debtor Kathylene A. Marshall, Plaintiff v. Yasir Abdoun, Defendant
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

613 B.R. 194

IN RE Kathylene A. MARSHALL, DebtorKathylene A. Marshall, Plaintiff

v.Yasir Abdoun, Defendant

Bankruptcy No. 15-18921-AMC

Adv. Proc. No. 17-00088-AMC

United States Bankruptcy Court, E.D. Pennsylvania.

Date: February 11, 2020

Irwin Lee Trauss, Philadelphia Legal Services, Philadelphia, PA, for Plaintiff.

James J. O'Connell, Law Office, Philadelphia, PA, for Defendant

Ashely M. Chan, United States Bankruptcy Judge

I. INTRODUCTION

In February 2015, the City of Philadelphia ("City") sold real property ("Property") owned by Kathylene Marshall ("Debtor") and her husband to Yasir Abdoun ("Abdoun") at a sheriff's sale, on account of delinquent real estate taxes, for $29,000. During the sale process, the Philadelphia County Court of Common Pleas ("State Court") failed to hold a hearing prior to the issuance of the decree authorizing the sale, as required by Pennsylvania's Municipal Claims and Tax Lien Act ("MCTLA"), 53 P.S. § 7283(a).

Following the sale, the Debtor had nine months from the date of acknowledgment of the sheriff's deed to redeem the Property under state law by paying the purchase price to Abdoun. 53 P.S. § 7293(a). Prior to the expiration of the redemption period, Abdoun impermissibly attempted to collect rent from the Debtor and evict her from the Property on numerous occasions. When the Debtor filed for bankruptcy before the redemption period expired, Abdoun continued his attempts to impermissibly collect rent from the Debtor and filed overstated proofs of claim which improperly included amounts for rent.

In this adversary proceeding, the Debtor seeks to avoid the transfer of the Property to Abdoun as a constructively fraudulent transfer pursuant to 11 U.S.C. § 548(a)(1)(B)(i)-(ii)(I). Additionally, Debtor seeks to recover damages pursuant to Pennsylvania's Fair Credit Extension Uniformity Act ("FCEUA"), 73 P.S. § 2270.1 et seq. , as enforced through Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-9.2, on account of Abdoun's unlawful attempts to collect rent from the Debtor and evict her from the Property prior to the expiration of the redemption period. Finally, the Debtor seeks to hold Abdoun liable pursuant to 11 U.S.C. § 362(k)(l) for violating the automatic stay by attempting to collect postpetition rent after she filed for bankruptcy.

Because the Debtor fails to meet her burden to establish that the Property was transferred for less than its reasonably equivalent value, the Court concludes that the sale of the Property was not a constructively fraudulent transfer subject to avoidance under 11 U.S.C. § 548(a)(1)(B)(i)-(ii). However, because Abdoun's egregious and unlawful attempts to collect rent and evict the Debtor violated several provisions of the FCEUA and caused the Debtor ascertainable financial loss, the Court will award the Debtor $300, which represents one-and-a-half times the amount of her actual damages of $200 on account of those claims pursuant to the UTPCPL, 73 P.S. § 201-9.2. The Court will also award reasonable attorneys' fees for litigating and prosecuting the FCEUA claims.

Finally, Abdoun's attempt to collect postpetition rent from the Debtor is not a violation of the automatic stay because 11 U.S.C. §§ 362(a)(1) and (a)(6) only prohibit the collection of prepetition claims.

Based upon the foregoing, Abdoun will hold a total secured claim in the amount of $28,700, which will constitute the amount that the Debtor must pay under her chapter 13 plan to redeem the Property.

II. FACTS AND PROCEDURAL BACKGROUND

On March 31, 1997, the Debtor and her now-estranged husband, Raymond Marshall ("Husband"), became owners of the Property, which is located at 715 Cobbs Creek Parkway, Philadelphia, PA, as tenants by the entireties.¹ Ex. S-l. In 2011, after years of physical and mental abuse at the hands of her Husband, the Debtor finally had her Husband permanently and forcibly removed from the Property, following a particularly violent incident. Trial Tr. 34:6-35:4, April 17, 2019 ("Tr."). Although the Debtor believed that her Husband had agreed to pay the real estate taxes on the Property, he failed to do so for several years. Id. at 59:20-60:15.

Based upon delinquent real estate taxes against the Property totaling $9,777.13 in 2014, the City filed a petition in State Court for a rule to show cause seeking authorization to sell the Property in order to collect. Ex. S-l; Statement of Facts ("SOF") ¶ 3. The tax information certificate attached to the City's petition reflected that the City had assessed the value of the Property at $76,400. Ex. S-l. On or about July 28, 2014, the State Court issued a rule returnable granting the City's petition to show cause why a decree should not be entered permitting the sale of the Property ("Rule"). Ex. S-2; SOF ¶ 4. Less than six months later, the State Court issued a decree permitting the Property to be sold ("Decree") without holding a hearing ("Hearing"), as required by § 7283(a) of the MCTLA. Ex. S-3, S-4; SOF ¶¶ 6, 7.

On or about February 18, 2015, the City sold the Property at a sheriff's sale to Abdoun, the winning bidder, for $29,000. SOF ¶¶ 8, 9. Around the time of the sale, the Debtor's liabilities totaled between $70,000 and $80,000 and, besides the Property, the rest of her assets constituted $5,000 worth of personal property.² Tr. 37:7-24.

In March 2015, prior to the acknowledgment of the sheriff's deed, Abdoun went to the Property with his friend and a few police officers when Debtor was not home. SOF ¶ 14; Tr. 36:17-19, 65:23-25, 66:17-21, 79:6-10. When the Debtor's minor son, Demetrius Marshall ("Son"), let the officers and Abdoun in, the officers gave the Son "a piece of paper to give to [his] mother" which reflected that the Property had been sold at a sheriff's sale. Tr. 36:10-24, 66:17-21. The officers left shortly thereafter. Id. at 67:17-18. Meanwhile, Abdoun gave the Son his business card, told him that the Property had been sold, and that he and his mother would have to leave. Id. at 36:10-21, 79:6-14.

After the Son called the Debtor and told her what had happened, she came home and ordered Abdoun and his friend, who were still standing outside, to leave because she was unaware that the Property had been sold. SOF ¶ 15; Tr. 36:8-25. Having her Son call her and tell her that a stranger was claiming to own her home made the Debtor feel physically ill and brought back the anxiety and fear she used to experience when her abusive Husband still lived at the Property. Tr. 47:2-16.

Shortly after Abdoun's first visit, the Debtor went to the Philadelphia Sheriff's Office and learned that her Property had been sold. Id. at 36:22-24. She subsequently started working with Philadelphia Legal Assistance, a federally-funded legal services program providing free legal services to low-income individuals in Philadelphia, to protect her interest in the Property. Id. at 36:24-25, 58:17-23; Philadelphia Legal Assistance: Providing Free Civil Legal Services to Low-Income Residents of Philadelphia Since 1996, https://www.philalegal.org/.

On or about March 27, 2015, Jewell Williams, the Sheriff of Philadelphia County, acknowledged a deed for the Property to Abdoun. Ex. S-6; SOF ¶ 11. On April 8, 2015, the deed to the Property was recorded. SOF ¶ 12. The state and city transfer tax certifications accompanying the recorded deed reflected that the Property's "fair market value" at the time of the sale was $76,400. Ex. S-6.

On April 9, 2015, Abdoun sent the Debtor two identical letters demanding rent even though the Debtor had never entered into a lease with Abdoun and had never agreed to pay him rent.³ Tr. 37:25-38:3, 41:21-23. See Ex. P-2, P-3. The rent demand left her scared, overwhelmed, upset, and anxious because she had been trying to make ends meet and could not afford to pay rent. Tr. 42:16-25.

In June or July of 2015, Abdoun returned to the Property and called the police when he saw the Son and his friend sitting on the front step. Id. at 67:24-68:3, 79:17-21; SOF ¶ 16. It appears that Abdoun suggested to the three or four police officers who arrived at the Property that the Debtor and her Son were squatters in the Property. SOF ¶ 17; Tr. 48:19-49:7, 68:1-18, 79:22-80:2. When the police came to the front door to speak to the Debtor, they became hostile, accused the Debtor of breaking into the Property, and ordered her to leave. SOF ¶ 19; Tr. 48:15-25, 68:10-15. In order to prove that she was not a squatter, the Debtor showed the police photo identification and several bills. Tr. 49:1-7. After demonstrating that she resided at the Property, the police left. Id. at 49:5-11.

The encounter between the Debtor and the police took place outdoors on the front step of the Property where her neighbors, bystanders in the community park across the street, and patrons of a nearby bar could see and hear. Id. at 49:12-21, 50:15-17. Having the police at her Property humiliated the Debtor, reminding her of the many humiliating public encounters she previously experienced with the police due to her abusive Husband's behavior in prior years. Id. at 49:22-50:14.

For approximately six months after the police encounter, the Debtor experienced intense fear that Abdoun would return with the police and force her to leave. Id. at 53:13-21, 56:8-14. In fact, she rarely left the Property for fear that the police would lock her out when she was not home. Id. at 53:22-54:7. Due to her fear and anxiety, she became impatient, constantly felt "overanxious," struggled to concentrate and sleep, and cried frequently. Id. at 54:14-55:23. Her Son observed that she had "a weight on he [sic] back" since she spent many nights after the police encounter crying on the phone to her friends. Id. at 71:21-25, 72:10-15.

On December 14, 2015, the Debtor, through counsel, filed a voluntary petition under chapter 13 of the Bankruptcy Code. Case No. 15-18921 ECF No. ("ECF") 1. On January 5, 2016, the Debtor filed her schedules, which identified Abdoun as a...