Valez v. Rent (In re Valez)

• Decision Date: 29 June 2019
• Docket Number: Adversary Number: 4:18-ap-00138-RNO,Case Number: 4:18-bk-03855-RNO
• Citation: 601 B.R. 351
• Parties: IN RE: David VALEZ, Debtor(s) David Valez, Plaintiff(s) v. EZ Rent a Car Incorporated, Defendant(s)
• Court: U.S. Bankruptcy Court — Middle District of Pennsylvania

601 B.R. 351

IN RE: David VALEZ, Debtor(s)David Valez, Plaintiff(s)

v.EZ Rent a Car Incorporated, Defendant(s)

Case Number: 4:18-bk-03855-RNO

Adversary Number: 4:18-ap-00138-RNO

United States Bankruptcy Court, M.D. Pennsylvania.

Signed June 29, 2019

J. Zac Christman, Fisher Christman, Stroudsburg, PA, John Fisher, Pittston, PA, for Plaintiff.

Frank R. Cori, Law Offices of Frank R. Cori, PC, Orwigsburg, PA, for Defendant.

OPINION¹

Robert N. Opel, II, Chief Bankruptcy Judge

Debtor filed an Adversary Complaint alleging Defendant violated the automatic stay. Subsequently, Debtor filed a Motion for Summary Judgment. For the reasons stated below, I will grant Debtor's Motion in part and deny it in part.

I. JURISDICTION

This 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).

II. FACTS AND PROCEDURAL HISTORY

On or about August 5, 2017, David Velez ("Debtor") entered into an Agreement ("Agreement") whereby Debtor agreed to lease a 2012 Chrysler 200 LX ("Vehicle") from EZ Rent A Car Inc. ("Defendant"). The general terms of the Agreement required a down payment as well as monthly payments over a specified period of time, at the end of which Debtor would have the option of returning or purchasing the Vehicle. While not a co-obligor on the Agreement, Amber Jo Derk ("Derk") authorized Defendant to debit her account monthly in satisfaction of Debtor's monthly payments under the Agreement. Derk's authorization was never rescinded, and she is not a named debtor in the underlying bankruptcy proceeding.

On September 14, 2018, Debtor filed his voluntary Chapter 7 bankruptcy petition (4:18-bk-3855-RNO). Subsequently, Defendant received notice of Debtor's Chapter 7 case which indicated November 7, 2018, as the date set for the first meeting of creditors.

On October 29, 2018, Defendant debited Derk's account in the amount of $170.00 in satisfaction of Debtor's monthly payment under the Agreement. On November 20, 2018, Defendant remotely disabled the Vehicle. On November 21, 2018, Defendant repossessed the Vehicle, allegedly with some of Debtor's possessions still inside.

On November 27, 2018, Debtor filed this Adversary Complaint ("Adversary Complaint") (4:18-ap-138-RNO). On February 19, 2019, Debtor propounded discovery on Defendant, including Requests for Admission ("Requests for Admission"). After some back and forth conversations between the parties, Defendant answered the Requests for Admission on April 26, 2019. An Answer to the Complaint was filed on December 4, 2018. ECF No. 5.

On April 12, 2019, Debtor filed a Motion for Summary Judgment ("Motion"). Briefs have been filed in support of, and in opposition to, the Motion. A trial date is presently set for October 18, 2019. The Motion is now ripe for decision regarding Defendant's liability.

III. DISCUSSION

Debtor requests summary judgment against Defendant on the issue of liability in relation to Defendant's alleged violation of the automatic stay imposed by 11 U.S.C. § 362(a).² Specifically, Debtor alleges that Defendant violated the automatic stay when Defendant debited Derk's account post-petition, disabled the Vehicle, and repossessed the Vehicle with Debtor's personal possessions allegedly still inside. Debtor requests an award of compensatory damages, punitive damages, costs, and reasonable attorney's fees pursuant to § 362(k). However, Debtor requests the amount of such damages be determined at trial

In response, Defendant argues that it did not violate the stay when it debited Derk's account because Derk is not named as a co-obligor on the Agreement nor is she named as a co-debtor in Debtor's Chapter 7 bankruptcy. Defendant also argues that it did not violate the stay when it disabled and repossessed the Vehicle because Debtor had waived the protections of the automatic stay pursuant to paragraph thirteen of the Agreement. Furthermore, Defendant argues that it never had knowledge of any of Debtor's personalty being in the Vehicle during or following the repossession.

A. Standard of Review to Decide a Motion for Summary Judgment Under Federal Rule of Bankruptcy Procedure 7056

Federal Rule of Bankruptcy Procedure ("FRBP") 7056 makes Federal Rule of Civil Procedure ("FRCP") 56 applicable in bankruptcy adversary proceedings. Summary judgment is appropriate and shall be granted when the movant establishes that there is no genuine dispute of material fact and that the movant is entitled to judgment as a matter of law. Beard v. Banks , 548 U.S. 521, 529, 126 S.Ct. 2572, 2578, 165 L.Ed.2d 697 (2006) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) ; Rosen v. Bezner , 996 F.2d 1527, 1530 (3d Cir. 1993). At the summary judgment stage in the proceedings, a court must not weigh the evidence, or make a determination as to the truth of the matter, but must instead decide if there is a genuine issue for trial. Santini v. Fuentes , 795 F.3d 410, 416 (3d Cir. 2015) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) ). In determining whether or not there is a genuine issue of material fact, "the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson , 477 U.S. at 248, 106 S. Ct. at 2510 ; Cliffs-Neddrill Turnkey Int'l-Oranjestad v. M/T Rich Duke , 947 F.2d 83, 87 (3d Cir. 1991) ; Felker v. Christine , 796 F. Supp. 135, 138 (M.D. Pa. 1992).

When considering a motion for summary judgment, the court must draw all inferences in the light most favorable to the non-moving party, here Defendant. Abramson v. William Paterson Coll. of N.J. , 260 F.3d 265, 276 (3d Cir. 2001) ; In re Eury , 544 B.R. 563, 565 (Bankr. W.D. Pa. 2016). The initial burden of proof is on the movant to show that there is no dispute of material fact, which may be established by citing materials on the record such as "depositions, documents, affidavits, stipulations, admissions, and interrogatory answers." In re Scalera , 2013 WL 5963554, at *1 (Bankr. W.D. Pa. Nov. 8, 2013). Once the movant has satisfied their initial burden, the burden shifts to the non-moving party to show not merely "that there is some metaphysical doubt as to the material facts" but that there is a genuine issue for trial. Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 1776, 167 L.Ed.2d 686 (2007) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 1355–56, 89 L.Ed.2d 538 (1986) ). If there is a genuine issue of material fact, summary judgment must be denied.

B. The Application of FRBP 7036

Debtor argues that his Requests for Admission are deemed admitted by default due to Defendant's failure to respond within the thirty-day time-period provided in F.R.B.P. 7036(a). If I hold as such, Debtor argues such admissions warrant a grant of summary judgment in his favor in this adversary proceeding. In response, Defendant argues that I have authority to allow the withdrawal or amendment of requests for admission pursuant to FRBP 7036(b). Defendant argues that such a ruling warrants the denial of summary judgment because then there would be outstanding, genuine issues of material fact.

FRBP 7036 makes FRCP 36 applicable in bankruptcy adversary proceedings. FRBP 7036 governs requests for admission, and provides that "[a] party may serve on any other party a written request to admit ... the truth of any matters ... relating to ... facts, the application of law to fact, or opinions about either[.]" Fed. R. Bankr. P. 7036(a)(1)(A). Pursuant to FRBP 7036(a)(3), "[a] matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." When the party receiving the request fails to timely answer, the matters detailed therein are deemed conclusively admitted. In re D'Ambrosio , 452 B.R. 562, 570 (Bankr. E.D. Pa. 2011) (citing Harrison v. Ammons , 2009 WL 2588834, at *4 (M.D. Pa. Aug. 19, 2009) ; 10 Collier on Bankruptcy P 7036.03 (16th 2019) ("[A]n admission is of equal force whether affirmatively stated or deemed admitted by default."). An admission made pursuant to FRBP 7036 is "an unassailable statement of fact that narrows the triable issues in the case. Even conflicting testimonial evidence does not alter the effect of an [ FRBP 7036 ] admission." Id. (internal citation omitted). However, pursuant to FRBP 7036(b), a court may find that a party is not bound by an unanswered request for admission. See In re Wolf , 556 B.R. 676, 685 (Bankr. E.D. Pa. 2016), aff'd , 573 B.R. 179 (E.D. Pa. 2017), subsequently aff'd , 739 F. App'x 165 (3d Cir. 2018).

FRBP 7036(b) provides:

(b) Effect of an Admission; Withdrawing or Amending It. A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended. Subject to Rule 16(e), the court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits. An admission under this rule is not an admission for any other purpose and cannot be used against the party in any other proceeding.

FRBP 7036(b) permits a court to exercise discretion when deciding whether or not to permit a withdrawal or amendment of requests for admission. In re Wolf , 556 B.R. 676, 685 (Bankr. E.D. Pa. 2016), aff'd , 573 B.R. 179 (E.D. Pa. 2017), subsequently aff'd , 739 F. App'x 165 (3d Cir. 2018) (citation omitted). "[A] court may permit a motion to withdraw or amend admissions if: (1) doing so ‘would promote the presentation of the merits of the action’; and (2) ‘the court is...