521 B.R. 417
Bankr. M.D. Ga.2014Background
- Debtor filed Chapter 13 on August 5, 2013; plan confirmed December 18, 2013 (plan stated property would remain property of the estate during the plan).
- Debtor purchased a 2005 Isuzu Ascender from Kam’s on March 14, 2014 for $6,995; Kam’s retained a purchase-money security interest.
- Debtor did not disclose her pending bankruptcy at the time of sale; Kam’s learned of the bankruptcy by mailed amended schedules (served June 27, 2014) and a call from debtor’s counsel on June 28, 2014.
- Kam’s repossessed the vehicle on July 22, 2014 and retained possession thereafter.
- Debtor moved to hold Kam’s in contempt for violating the automatic stay under 11 U.S.C. § 362(a); hearing held August 25, 2014. Debtor offered no evidence of actual damages at the hearing.
Issues
| Issue | Debtor's Argument | Kam's Argument | Held |
|---|---|---|---|
| Whether vehicle acquired post-confirmation is "property of the estate" protected by § 362 | Vehicle acquired during pending Chapter 13 is property of the estate under § 1306(a); plan’s non-vesting language keeps it in estate | Vehicle acquired after confirmation is not property of the estate and therefore not protected | Vehicle acquired post-confirmation before case closed is property of the estate; stay applies (Waldron controls) |
| Whether repossession and withholding violated the automatic stay | Repossession of estate property and refusal to return it violated § 362(a) | Sale occurred post-confirmation; repossession lawful or stay inapplicable | Repossession and continued control violated the stay; debtor retains title until sale so withholding is an ongoing violation |
| Whether violation was willful | Kam’s had notice of bankruptcy (schedules + call) and intentionally repossessed; constitutes willful violation | Kam’s relied on counsel and believed stay inapplicable; acted in good faith | Willfulness established: knowledge of bankruptcy and intentional act suffice; reliance on counsel irrelevant |
| Damages and remedies (actual, attorneys’ fees, punitive) | Seek $1,500 actual damages, $500 attorneys’ fees, and punitive if actual damages insufficient | Argues no violation or no damages | No actual damages proven so none awarded; court allows debtor 21 days to file detailed fee affidavit; denies punitive damages given counsel-advice reliance, lack of proven harm, and debtor’s misrepresentation at sale |
Key Cases Cited
- Motors Acceptance Corp. v. Rozier, 376 F.3d 1323 (11th Cir. 2004) (repossession and failure to return vehicle is control of estate property)
- Jove Eng’g, Inc. v. I.R.S. (In re Jove Eng’g, Inc.), 92 F.3d 1539 (11th Cir. 1996) (willful stay violation requires knowledge of bankruptcy and intentional violation)
- Waldron v. Brown (In re Waldron), 536 F.3d 1239 (11th Cir. 2008) (property acquired post-confirmation is property of the estate under § 1306(a))
- Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000) (estate-transformation approach applied to pre-confirmation post-petition earnings)
- United States v. Ron Pair Enters., Inc., 489 U.S. 235 (U.S. 1989) (statutory text controls absent a clearly contrary legislative intent)