Odom v. Phila. Parking Auth. (In re Odom), Bky. No. 15–19111 ELF

• Decision Date: 10 August 2017
• Docket Number: Bky. No. 15–19111 ELF,Adv. No. 16–0195
• Citation: 571 B.R. 687
• Parties: IN RE: Amel M. ODOM, Debtor. Amel M. Odom, Plaintiff, v. Philadelphia Parking Authority, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

571 B.R. 687

IN RE: Amel M. ODOM, Debtor.

Amel M. Odom, Plaintiff,

v.Philadelphia Parking Authority, Defendant.

Bky. No. 15–19111 ELF

Adv. No. 16–0195

United States Bankruptcy Court, E.D. Pennsylvania.

Signed August 10, 2017

Stephen Matthew Dunne, Dunne Law Offices, P.C., Philadelphia, PA, for Plaintiff.

Thomas Daniel Bielli, Cory P. Stephenson, Bielli & Klauder, LLC, Philadelphia, PA, for Defendant.

MEMORANDUM

ERIC L. FRANK, CHIEF U.S. BANKRUPTCY JUDGE

I. INTRODUCTION

In this adversary proceeding, Plaintiff Amel M. Odom ("the Debtor") seeks damages under 11 U.S.C. § 362(k) from the Defendant Philadelphia Parking Authority (the "PPA") for an alleged "willful" violation of the automatic stay, 11 U.S.C. § 362(a). Presently before the court are the parties' cross motions for summary judgment.¹

The facts are not complicated. The parties agree that approximately a year and a half after the Debtor filed for bankruptcy protection, the PPA impounded the Debtor's automobile and did not return it for six (6) days.

In the cross motions, the parties spar primarily on one (1) legal issue and one (1) fact question.

The primary legal issue is whether the PPA is immune from liability based upon Pennsylvania's Political Subdivision Tort Claims Act, 42 Pa. C.S. §§ 8541 et seq. (the "PSTCA"). The PPA posits that the PSTCA provides a complete, affirmative defense to the Debtor's claim. However, in this bankruptcy proceeding, in which the Debtor asserts a cause of action created by the Bankruptcy Code, the statutory immunity provided by the PSTCA has no applicability. Therefore, the PPA's motion, on this theory, must be denied.

The primary fact question is: when did the PPA receive notice of the Debtor's bankruptcy filing? That question leads to two (2) subsidiary questions:

(1) Did the PPA receive notice before it impounded the Debtor's car on June 11, 2016?

(2) Did the PPA receive notice on June 11, 2016, the day after it impounded the car (but refused to release the car for an additional five (5) days); or did the PPA first receive notice of the bankruptcy filing on June 16, 2016, the day that it released the car to the Debtor (rendering the stay violation non-willful and precluding the recovery of damages under 11 U.S.C. § 362(k) )?

Each side believes that the facts are undisputed in its favor, justifying the entry of partial summary judgment (the Debtor) or complete summary judgment (the PPA). However, both sides are incorrect. Based on the present record, the central material fact (i.e. , when was the PPA on notice of the Debtor's bankruptcy case?) is in dispute, precluding summary judgment for either side.²

II. PROCEDURAL AND FACTUAL HISTORY

A. The Main Bankruptcy Case

On December 22, 2015, the Debtor filed a voluntary Chapter 13 bankruptcy case. On January 5, 2016, the Debtor filed his bankruptcy schedules. (Bky. No. 15–19111, Doc. # 8). The Debtor's chapter 13 plan was confirmed on August 23, 2016. (Id. , Doc. # 61).

On Schedule E/F, the Debtor listed both the City of Philadelphia ("the City") and the Philadelphia Traffic Court³ as creditors.⁴ Schedule E/F lists the mailing address of the City as P.O. Box 41818, Philadelphia, PA 19101⁵ and the mailing address of the Philadelphia Traffic Court as 800 Spring Garden Street, Philadelphia, PA 19123–2690.⁶

On January 22, 2016, the court served parties in interest with the Notice of Chapter 13 Bankruptcy Case (Official Form 309I) and filed a Certificate of Mailing. (See Bky. No. 15–19111, Doc. #'s 14, 16).⁷

On April 13, 2016, the Debtor's counsel filed a Notice of Continued Section 341(a) Meeting of Creditors, advising parties of the rescheduling of the § 341 meeting of creditors. This notice was accompanied by a Certification of Service, in which counsel certified that the Notice was served by first class mail on April 13, 2016 on, inter alia , the City at P.O. Box 41818, Philadelphia, PA 19101 and the Philadelphia Traffic Court at 800 Spring Garden Street, Philadelphia, PA 19123–2690. (Id. , Doc. # 27).⁸

B. The Adversary Proceeding

On June 16, 2016, the Debtor filed the Complaint, initiating this adversary proceeding. In the Complaint, the Debtor asserts that the PPA willfully violated the automatic stay by impounding and refusing to release the Car. The Debtor requests compensatory damages, punitive damages, as well as attorney's fees and costs.

The PPA filed an Answer to the Complaint on July 18, 2016 and an Amended Answer on September 2, 2016. (Doc. #'s 4, 11).

The PPA filed a Motion for Summary Judgment on January 13, 2017 ("the Motion") (Doc. # 42). On January 27, 2017, the Debtor filed a Cross Motion for Summary Judgment ("the Cross Motion") (Doc. # 48). The same day, the Debtor filed a response to PPA's Motion ("the Debtor's Response") (Doc. # 49). On February 17, 2017, the PPA filed a response to the Cross Motion ("the PPA's Response") (Doc. # 58). The Debtor filed a supplemental response to the PPA's Motion on February 20, 2017 ("the Debtor's Supplemental Response") (Doc. # 59).

C. Undisputed Facts

The Debtor owns a 2007 Audi Q7 ("the Car"). The PPA acknowledges that

• the Debtor was in a bankruptcy as of December 22, 2015;

• the PPA impounded the Car on June 10, 2016, while the Debtor was still in a bankruptcy;⁹

• on June 16, 2016, the PPA received oral notice of the Debtor's bankruptcy filing; and

• on June 16, 2016, after receiving that oral notice, the PPA released the Car to the Debtor.

PPA's Response at 4.

III. SUMMARY JUDGMENT STANDARD

Pursuant to Fed. R. Civ. P. 56(a), applicable in this adversary proceeding through Fed. R. Bankr. P. 7056, summary judgment must be granted to a moving party when, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. E.g. , Tri–M Group, LLC v. Sharp , 638 F.3d 406, 415 (3d Cir. 2011) ; In re Bath , 442 B.R. 377, 387 (Bankr. E.D. Pa. 2010). See also In re Asbestos Prods. Liab. Litig. (No. VI) , 837 F.3d 231, 235–36 (3d Cir. 2016).

On a motion for summary judgment, the court's role is not to weigh the evidence, but to determine whether there is a disputed, material fact for resolution at trial. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact is one in which sufficient evidence exists that would permit a reasonable fact finder to return a verdict for the non-moving party. Id. at 248, 106 S.Ct. 2505.

The parties' respective burdens of proof also play a role in determining the merits of a summary judgment motion. See In re Polichuk , 506 B.R. 405, 421 (Bankr. E.D. Pa. 2014).

If the movant is the defendant or the party without the burden of proof, the movant must demonstrate the absence of a genuine issue of material fact, but the movant is not required to support the motion with affidavits or other materials that negate the opponent's claim. Rather, the movant may assert that the party with the burden of proof has not come forward with evidence to support one or more elements of its claim. See Celotex Corp. v. Catrett , 477 U.S. 317, 323–34, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

On the other hand, if the movant is the party with the burden of proof at trial, the standard is more stringent. The movant "must produce enough evidence to justify a directed verdict in its favor in order to meet its initial burden." Nat'l State Bank v. Fed. Reserve Bank of New York , 979 F.2d 1579, 1582 n.2 (3d Cir. 1992) ; see also In re Newman , 304 B.R. 188, 193 (Bankr. E.D. Pa. 2002).

IV. THE LEGAL STANDARD AND REMEDY FOR A WILLFUL VIOLATION OF THE AUTOMATIC STAY

It is well known that the automatic stay is designed to stop pending debt collection activity and litigation and is considered one of the fundamental protections afforded by the Bankruptcy Code. E.g. , In re Billings , 544 B.R. 529, 533 (Bankr. E.D. Pa. 2016) (citing H & H Beverage Distributors v. Dep't of Revenue of Com. of Pa. , 850 F.2d 165, 166 (3d Cir. 1988) ), aff'd , 687 Fed.Appx. 163, 2017 WL 1488657 (3d Cir. Apr. 26, 2017) (nonprecedential).

The automatic stay, imposed by 11 U.S.C. § 362(a), prohibits, inter alia , "any act to collect ... or recover a claim against the debtor that arose before the commencement of the case," 11 U.S.C. § 362(a)(6) and "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate," 11 U.S.C. § 362(a)(3).

A willful violation of the automatic stay gives rise to a claim for damages, as set forth in 11 U.S.C. § 362(k) :

(1) Except as provided in paragraph (2), an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages.

(2) If such violation is based on an action taken by an entity in the good faith belief that subsection (h) applies to the debtor, the recovery under paragraph (1) of this subsection against such entity shall be limited to actual damages.

11 U.S.C. § 362(k) (emphasis added).

The Third Circuit recently summarized the well established standard for the concept of a "willful" violation of the automatic stay:

It is a willful violation of the automatic stay when a creditor violates the stay with the knowledge that the bankruptcy petition has been filed . Willfulness does not require that the creditor intend to violate the automatic stay provision , rather it requires that the acts which violate the stay be intentional.... [A] creditor's ‘good faith’ belief that he is not violating the automatic stay provision is not determinative of willfulness...."

In re Lansaw , 853 F.3d 657, 664 n.4 (3d Cir. 2017) (emphasis added) (quoting In re Lansdale Family Rests., Inc , 977 F.2d 826, 829 (3d Cir. 1992) ); see also In re Atlantic Business & Community Corp. , 901 F.2d 325, 329 (3d Cir. 1990) ("the statute provides for damages upon a finding that the defendant knew of...