508 B.R. 98
Bankr. E.D. Wis.2014Background
- Debtor Austin Ingram and grandmother Joan Lorenz own a 2008 Ford F350; bank Allied First Bank holds a lien noted on title.
- Wilson obtained a state-court judgment and issued an execution directed to the Sheriff to seize the Vehicle despite the Bank’s senior lien.
- Jensen Towing, engaged by the Sheriff, towed and stored the Vehicle; Debtor filed Chapter 7 on December 9, 2013.
- Jensen Towing refused to release the Vehicle without payment of towing/storage fees; Bank moved for sanctions for stay violation.
- Bank sought damages including attorneys’ fees and punitive damages; issue focused on Jensen Towing as defendant rather than the judgment creditor.
- Wisconsin statutory framework allowed Jensen Towing a lien that could prime Bank’s lien, affecting stay liability and turnover options.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Jensen Towing violate the automatic stay by withholding the Vehicle? | Bank argues stay violation due to post-petition possession. | Jensen Towing relied on a valid statutory lien; no stay violation. | No stay violation; possessory statutory lien permitted post-petition possession. |
| Did Wilson violate the stay by directing the Sheriff's seizure pre-petition? | Bank contends execution violated stay after bankruptcy filing. | Not applicable to Jensen Towing; focus on creditor. | Potential stay issue against Wilson; decision emphasizes creditor’s role. |
| Does Wis. § 779.415(lg)(a) priority lien defeat Bank’s lien and affect stay liability? | Bank argues lien status should not protect towing. | Towing’s lien primes Bank’s security interest under statute. | Statutory lien valid; priority can trump Bank’s lien under statute. |
| Are attorneys’ fees or punitive damages under § 362(k) warranted against Jensen Towing? | Bank seeks fees and punitive damages. | Jensen Towing acted within statutory rights and did not violate stay. | Denied; no § 362(k) damages or fees against Jensen Towing. |
| Are state-law turnover or custodian remedies available and appropriate? | Bank could pursue turnover; towing custodian status debated. | Turnover remedy possible, but not pursued against Jensen Towing. | Turnover may be available; court declines sanctions, notes remedies. |
Key Cases Cited
- Thompson v. GMAC, LLC, 566 F.3d 699 (7th Cir. 2009) (knowing retention of estate property violates stay in Chapter 13)
- In re Bucchino, 439 B.R. 761 (Bankr.D.N.M. 2010) (standing to pursue stay violations varies by trustee)
- Boggan v. Hoff Ford, Inc. (In re Boggan), 251 B.R. 95 (9th Cir.BAP 2000) (post-petition possession necessary to perfect lien does not violate stay)
- Westman v. Andersohn (In re Westman), 300 B.R. 338 (Bankr.D.Minn. 2003) (creditor liable for stay violation when judgment creditor controls property)
- In re Skinner, 213 B.R. 335 (Bankr.W.D.Tenn. 1997) (custodian holding estate property may be turned over; requires compensation)