Walker, Matter of

Decision Date09 May 1995
Docket NumberNo. 94-30256,94-30256
Citation51 F.3d 562
Parties, 33 Collier Bankr.Cas.2d 1136, Bankr. L. Rep. P 76,499 In The Matter of Irma J. WALKER, Debtor. Irma J. WALKER, Appellee, v. The CADLE COMPANY, Appellant, v. Denise D. LINDSEY and Stan Svara d/b/a SKS Enterprises, Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Mark C. Landry, Newman, Mathis, Brady, Wakefield & Spedale, Metairie, LA, for appellant.

Phillip K. Wallace, New Orleans, LA, for Walker.

Lawrence Robert Anderson, Jr., Seale, Smith, Zuber & Barnette, Baton Rouge, LA, for Svara.

Denise D. Lindsey, Slidell, LA, pro se.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before KING, EMILIO M. GARZA and DeMOSS, Circuit Judges.

KING, Circuit Judge:

In this case, we are confronted with questions surrounding the scope of bankruptcy jurisdiction. Irma J. Walker filed an adversary proceeding in bankruptcy court against the Cadle Company alleging violations of the automatic stay provisions of the Bankruptcy Code. The Cadle Company, seeking contribution and indemnity for any damages assessed against it, initiated third-party actions against Stan Svara and an attorney retained by the Cadle Company, Denise Lindsey. Although the bankruptcy court determined that Lindsey could not be charged with any liability for violations of the automatic stay, it did find that the Cadle Company and Svara had violated the automatic stay, and it awarded Walker damages and attorney's fees. Both the Cadle Company and Svara appealed to the district court which affirmed the judgment against the Cadle Company and in favor of Walker. See Walker v. Cadle Co. (In re Walker), 168 B.R. 114 (E.D.La.1994). The district also found, however, that neither it nor the bankruptcy court had subject matter jurisdiction over the Cadle Company's claim for contribution and indemnity against Svara, and accordingly, it reversed the bankruptcy court's award against Svara. The Cadle Company now appeals. Finding no reversible error in the district court's decision, we affirm.


In December of 1979, Walker purchased a mobile home from a Louisiana mobile home dealer. The purchase was financed and secured with a chattel mortgage in favor of Capital Bank & Trust Company. In 1990, the Cadle Company ("Cadle") bought the mortgage from the Federal Deposit Insurance Company, which acquired the mortgage when Capital Bank & Trust Company became insolvent.

The next year, Walker became delinquent in her payments on the mortgage, and Jeff Joseph, the Cadle account officer in charge of Walker's file, hired an attorney, Denise Lindsey, to pursue the debt. Eventually, Cadle sued Walker on the loan and received a default judgment against Walker for $11,810.74 plus interest, costs, and attorney's fees.

On July 26, 1991, Walker sought the protection of Chapter 7 of the Bankruptcy Code. Walker filed a B-2 schedule itemizing her personal property and estimating its value at just over $1000. Walker also signed a statement of intent, proclaiming that she would voluntarily surrender the trailer within forty-five days as required by 11 U.S.C. Sec. 521(2)(b). In early August, Lindsey was notified of Walker's bankruptcy filings, and she in turn advised Joseph of Walker's bankruptcy. One week later, on August 12, 1991, Cadle filed a proof of claim (which was signed by Joseph) in the bankruptcy court for $14,421.88.

Around the same time, Joseph told a business associate, Stan Svara, that he might have a trailer available, and he gave Svara Walker's telephone number. Svara called Walker about the trailer, but Walker informed Svara that she had filed for bankruptcy and she told Svara to contact her attorney, Jonathan May, about the trailer. Svara then relayed his conversation with Walker back to Joseph, telling him to contact Svara when Joseph got "matters straight."

Near August 23, 1991, Lindsey sent May a voluntary release and surrender form which was to be executed at a creditor's meeting. When Lindsey arrived at that September 3 meeting, she found that the form had not been signed and that Walker's attorney, May, had passed away. Lindsey gave another copy of the release form to Walker's new attorney, James Moorman. Lindsey testified that Moorman advised her that he would look over the release and "have [Walker] sign it if everything was in order." Additionally, Walker informed Lindsey that she was planning to give up the trailer, but would need until the end of the week to remove her property from the trailer. Walker, however, did not sign a voluntary release and surrender form.

Lindsey sent a letter to Joseph on September 4, 1991, informing Joseph that, "Mrs. Walker should be out of the trailer by Saturday, 9/7/91. She will surrender the trailer at any time after that, but I must confirm with her attorney at the end of this week." Five days later, the bankruptcy court granted the bankruptcy trustee's petition of disclaimer and abandonment of the trailer.

Sometime after the September 3 creditors' meeting, Cadle, through Joseph, began negotiating with Svara for the purchase of the trailer. On September 6, Joseph informed Svara that Walker would vacate the trailer over the next few days and instructed Svara to inspect the trailer to determine whether Svara would consider purchasing it. After Svara looked at the trailer, he reported to Joseph that the trailer was in poor condition. Moreover, Svara told Joseph that he did not think that Walker still lived in the trailer as the mobile home's door was open, animals were roaming around, and evidence of rodent and insect infestation was present.

After Svara described the condition of the trailer to Joseph, they agreed that Svara would purchase the trailer for $1750. Later, on September 11, Joseph spoke to Lindsey about the trailer. Lindsey, however, did not give Joseph permission to sell the trailer, but informed Joseph that additional authorization from Walker's attorney was needed. 1

Nevertheless, a few weeks later, on September 25, 1991, Joseph called Lindsey and informed her that he was selling the trailer and that he needed the Voluntary Surrender Form. Lindsey then sent another form to Walker's attorney. The next day, Cadle sold the mobile home to Svara's fiance, Joni Davis, and several days later, on September 30, 1991, Svara and some associates went to retrieve the trailer. Svara again found the trailer disheveled, but he and his men added to the mess by throwing Walker's personal property on the lot when they removed the mobile home.

Walker, meanwhile, had been hospitalized with pneumonia and heart failure for approximately two weeks after she filed for bankruptcy protection in August. After her release, Walker lived with her parents. On October 7, 1991, Walker returned to the mobile home park, finding the trailer gone and her personal property strewn about the lot. Evidently, because of exposure to the elements, none of the property could be salvaged.

Walker filed an adversary proceeding against Cadle for violating the automatic stay imposed by 11 U.S.C. Sec. 362, seeking recovery for damage to her personal property. Cadle instituted a counter-claim seeking to revoke Walker's discharge from bankruptcy (which had been granted on May 18, 1992). Cadle alleged that the discharge should be revoked because of a discrepancy between the value of the property as stated in Walker's B-2 schedules and the value stated in her complaint. Walker amended her complaint to conform to her bankruptcy schedules. Cadle also brought a third-party demand against Lindsey and Svara, seeking contribution and/or indemnity for any damages assessed against Cadle.

After a trial on the merits in late October of 1992, the bankruptcy court issued findings of fact and conclusions of law. Specifically, the court found that Cadle and Svara had violated the automatic stay by selling the trailer and, in doing so, had caused $2000 of damage to Walker. The bankruptcy court also awarded Walker attorney's fees. On the other hand, the bankruptcy court found that, "Lindsey did not violate the automatic stay against the debtor's property as she did not take any action or control over the debtor's property[,] ... and [she] cannot be charged with any liability as the result of Cadle's violation of the automatic stay."

After the parties submitted additional materials, the bankruptcy court issued supplemental findings of fact and conclusions of law, and awarded Walker attorney's fees in the amount of $4800 and costs of $361.76. Following additional proceedings, the bankruptcy court found that Svara was fifty percent responsible for the amounts owed to Walker.

Svara and Cadle appealed to the district court. The district court found that Cadle had no cause of action against Svara under the Bankruptcy Code. Moreover, the district court determined that it (and the bankruptcy court) did not have subject matter jurisdiction over Cadle's third-party claim, and accordingly, the court reversed the bankruptcy court's judgment against Svara. Additionally, the district court affirmed the bankruptcy court's finding that Cadle violated the automatic stay, as well as the bankruptcy court's computation of the amount of the fees, costs, and damages owed to Walker.

Cadle now appeals to this court, arguing that the district court erred in affirming the bankruptcy court's: finding that Cadle violated the automatic stay; determination that Walker proved that she was damaged; dismissal of the cause of action against Lindsey; computation of the amount of costs and attorney's fees; and dismissal of Cadle's third-party complaint against Lindsey. Further, Cadle complains that the district court erred in concluding that Cadle did not have a cause of action against Svara under bankruptcy law and in holding that it lacked subject matter jurisdiction to hear and dispose of Cadle's third-party claim against Svara. We, however, disagree with all of Cadle's contentions.


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