McJonathan v. Wayne Bldg. Co. (In re McJonathan)

• Decision Date: 11 February 2015
• Docket Number: CASE NO. 1:13–bk–6313–RNO,ADVERSARY NO. 1:14–ap–00022–RNO
• Parties: In re: David McJonathan, Debtor David McJonathan, Plaintiff v. The Wayne Building Company, Inc., and Craig Mahrle, Defendants
• Court: United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Middle District of Pennsylvania

533 B.R. 440

In re: David McJonathan, Debtor
David McJonathan, Plaintiff
v.
The Wayne Building Company, Inc., and Craig Mahrle, Defendants

CASE NO. 1:13–bk–6313–RNO
ADVERSARY NO. 1:14–ap–00022–RNO

United States Bankruptcy Court, M.D. Pennsylvania.

Signed February 11, 2015

533 B.R. 442

Julie Gray Dorsett, Chambersburg, PA, for Plaintiff.

Wayne Building Company, Inc., pro se.

Craig Mahrle, pro se.

OPINION¹

Robert N. Opel, II, Bankruptcy Judge

Pending before the Court are two Motions for Summary Judgment. The first is Plaintiff, David McJonathan's, (“Debtor”) Motion for Summary Judgment which was filed on October 8, 2014 (“Debtor's Motion”). The second is Defendants, The Wayne Building Company, Inc. and Craig Mahrle's, (collectively “Wayne”) Cross Motion for Summary Judgment which was filed pro se on November 6, 2014 (“Wayne Motion”). For the reasons stated below, both Motions are denied.

I. Jurisdiction

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (G), and (O).

II. Facts and Procedural History

A voluntary petition under Chapter 7 of the Bankruptcy Code was filed on December 10, 2013, by the Debtor. The Debtor filed his schedules of assets and liabilities. Schedules A through J and Summary of Schedules, December 24, 2013, ECF No. 9 [hereinafter “ECF No. 9”]. Included on Schedule D (Creditors Holding Secured Claims) are three entries for The Wayne Building Company. ECF No. 9.

On December 11, 2013, Suggestions of Bankruptcy were filed in the Court of Common Pleas of the 39th Judicial District of Pennsylvania, Franklin County Bench. Plaintiff's Motion for Summary Judgment, ¶ 7 and Exhibit A, October 10, 2014, ECF No. 39 [hereinafter “Debtor's Motion”]. Debtor sent a letter to Wayne on December 11, 2013, informing Wayne of Debtor's entry into bankruptcy. Debtor's Motion, ¶ 8, Exhibit B. A sheriff's sale of Debtor's property scheduled for December 19, 2013, to satisfy judgments held by Wayne was stayed by the filing of the Debtor's bankruptcy petition. Complaint for Damages for the Willful and Deliberate Violation of the Automatic Stay Provisions of 11 U.S.C. § 362, ¶ 8, January 22, 2014, ECF No. 1 [hereinafter “Complaint”]. Debtor also filed motions to avoid Wayne's judicial liens. Complaint at ¶ 9.

A further review of the bankruptcy docket in the lead bankruptcy case, 1–13–bk–06313–RNO, shows that on March 4, 2014, the Trustee filed his report indicating that the 11 U.S.C. § 341² Meeting of

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Creditors had been held. The Trustee also filed a Report of No Distribution on April 9, 2014.

The present Adversary Proceeding was commenced by the Debtor on January 22, 2014, pursuant to § 362(k) for an alleged violation of the automatic stay. The action was commenced by a single count Complaint for Damages for the Willful and Deliberate Violation of the Automatic Stay (“Complaint”), which contains seventeen numbered paragraphs. The Complaint states that Defendant, Wayne Building Company, Inc., (“Wayne Building”) was listed on the Debtor's bankruptcy petition as a secured creditor and that Defendant, Craig Mahrle, (“Mahrle”) has been added as a co-creditor in other proceedings within the bankruptcy case. Complaint, ¶¶ 4–5.

In sum, the Complaint alleges that on January 9, 2014, approximately a month after the Debtor filed his bankruptcy petition on December 10, 2013, Wayne sought to collect a pre-petition debt by way of a collection letter in violation of § 362(a). Complaint, at ¶¶ 15 & 17. Further, the Complaint alleges that the letter requested storage fees be paid, commencing on January 15, 2014, for the retention and preservation of the Debtor's personal property in Wayne's care and control. Complaint, at ¶ 10. The Complaint seeks the return of all of the Debtor's personal property in the care and control of Wayne, actual damages of no less than $1,000 for compensatory loss and no less than $3,250 for attorney's fees and costs. The Debtor also seeks punitive damages in the amount of $5,000.

Wayne duly answered the Complaint. First, Wayne admits in Respondent's Answer to the Complaint, filed on February 24, 2014, that Wayne Building and Mahrle are co-creditors of the Debtor. Respondent's Answer to Complaint for Damages for the Willful and Deliberate Violation of the Automatic Stay Provision of 11 U.S.C. § 362, ¶ 1, February 24, 2014, ECF No. 7 [hereinafter “Answer”]. Second, Wayne admits that it received a letter on December 11, 2013, from Debtor's counsel informing Wayne of Debtor's entry into bankruptcy. Defendant's Response to Plaintiff's Motion for Summary Judgment, ¶ 1, October 23, 2014, ECF No. 43 [hereinafter “Defendant's Response”]. Third, Wayne admits that it sent a collection letter requesting payment of storage fees (“Wayne Letter”) to the Debtor on January 9, 2014. Answer, at ¶ 4. However, Wayne denies that the storage fees requested were on account of a pre-petition debt. Id. at ¶ 7. Instead, Wayne alleges that the storage fees were for the continuing storage of the Debtor's possessions post-petition and therefore no violation of the automatic stay occurred. Id. at ¶ 8.

On October 8, 2014, the Debtor moved for summary judgment. The Debtor filed his Statement of Undisputed Facts and Wayne filed their response thereto. Briefs have been submitted in support of and opposition to the Debtor's Motion. On November 6, 2014, Wayne filed a cross motion for summary judgment. Briefs have been submitted in support of and in opposition to the Wayne Motion. Both Motions are now ripe for decision.

III. Discussion

A. Standard to Decide Motions for Summary Judgment Under F.R.B.P. 7056

Federal Rule of Bankruptcy Procedure 7056 incorporates, and makes applicable to bankruptcy adversary proceedings, Rule 56 of the Federal Rules of Civil Procedure (“F.R.C.P.”). Pursuant to F.R.C.P. 56(a),

533 B.R. 444

the movant has the burden to prove that no genuine dispute exists as to any material fact and that the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “As to materiality, ... [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

After the movant satisfies its burden, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” In re LandSource Communities Dev. LLC, 485 B.R. 310, 314 (Bankr.D.Del.2013) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). Instead, the nonmoving party is required to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Throughout this analysis, the Court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor. Abramson v. William Paterson Coll. of N.J., 260 F.3d 265, 276 (3d Cir.2001).

This standard does not change when the parties file cross motions for summary judgment. Clevenger v. First Option Health Plan of N.J., 208 F.Supp.2d 463, 468 (D.N.J.2002) (citing Weissman v. U.S. Postal Serv., 19 F.Supp.2d 254 (D.N.J.1998) ). “When ruling on cross-motions for summary judgment, the court must consider the motions independently ... and view the evidence on each motion in the light most favorable to the party opposing the motion.” Clevenger, 208 F.Supp.2d at 468–69 (internal citations omitted) (citing Williams v. Phila. Hous. Auth., 834 F.Supp. 794, 797 (E.D.Pa.1993) ; Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 ).

B. Genuine Issues of Material Fact Remain

I note that the parties did not submit any affidavits for consideration pursuant to F.R.B.P. 7056. The only discovery material submitted was a one page exhibit attached to the Wayne Motion, which contains the Debtor's answer to only one of Wayne's interrogatories.

The key evidence offered by the Debtor that Wayne allegedly violated the automatic stay is the Wayne Letter. On January 9, 2014, after the Debtor filed his bankruptcy petition, Wayne sent the Debtor a letter seeking storage fees to be paid beginning on January 15, 2014, or the earliest date allowed “by such law.” Complaint, at ¶ 10 and Exhibit A; Answer, at ¶ 4. The letter from Wayne states:

Dear Mr. McJonathan:

As you know, when you moved out of 94 West Main Street, Apartment 4A, and out of your office on the second floor of the same building, you left a number of items behind that were not included in the sheriff's sales. We continue to store these items for you.

This letter is to advise you that as of January 15, 2014, the storage fee for the continued storage of these items is $200.00 per month for the apartment contents, and $200.00 per month for the office

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