532 B.R. 449
Bankr. E.D.N.Y.2015Background
- Debtor Jean S. Jean-Francois (a pastor) owned/occupied a mixed-use building at 3502 Church Avenue used partly for church services; mortgage went into foreclosure and Church Avenue Partners purchased the loan.
- Foreclosure sale occurred August 15, 2013; Debtor filed a Chapter 13 petition that day (filed at 2:09 p.m.).
- Church Avenue learned of the bankruptcy by at least September 3, 2013; on September 16, 2013 Church Avenue executed a warrant of eviction and evicted the Debtor (changing locks and removing property is disputed).
- The Debtor’s wife alleges she was physically assaulted by movers/agents of Church Avenue during the eviction and sought medical treatment.
- Church Avenue moved to annul the stay as to the foreclosure sale (granted in part); it never sought relief authorizing the eviction.
- Debtor moved for sanctions under 11 U.S.C. § 362(k); the bankruptcy court held a trial and found a willful stay violation and awarded punitive damages but denied actual damages for lack of proof of lost personal-property value.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether obtaining possession/evicting the Debtor after petition violated the automatic stay | Jean‑Francois: eviction after petition (and continuing exclusion) violated § 362 | Church Ave.: Building not estate property; eviction targeted the Church, not debtor | Eviction and denying access after learning of petition were willful stay violations |
| Whether willfulness/requisite intent existed for § 362(k) relief | Debtor: Church Ave. knew of the petition and proceeded anyway | Church Ave.: acted inadvertently or against the Church, not the Debtor | Willful violation established; specific intent not required—general intent to act causing violation suffices |
| Entitlement to actual damages for lost personal property | Debtor: personal and church items removed and not returned; seeks actual damages | Church Ave.: returned property and items belonged to Church, not Debtor; Debtor failed to list items in schedules | Actual damages denied—Debtor failed to prove ownership, existence, and value by preponderance of the evidence |
| Entitlement and amount of punitive damages under § 362(k) | Debtor: eviction was egregious and involved physical assault, warranting punitive damages | Church Ave.: disputes facts and contends conduct not malicious | Court awarded punitive damages ($50,000) because conduct was egregious, involved physical assault, and deterrence required |
Key Cases Cited
- Crysen/Montenay Energy Co. v. Schoenberg, 902 F.2d 1098 (2d Cir.) (deliberate acts taken while knowing a stay exists justify actual damages)
- 48th St. Steakhouse, Inc. v. Rockefeller Ctr. Props., 835 F.2d 427 (2d Cir.) (debtor’s possessory interest, even without legal title, is protected by the automatic stay)
- In re Salov, 510 B.R. 720 (Bankr. S.D.N.Y.) (creditors violated stay by post‑petition eviction steps; possessory interest triggers stay protection)
- In re Butler, 14 B.R. 532 (S.D.N.Y.) (eviction proceeding is a judicial proceeding under § 362(a)(1) and enforcement of a judgment under § 362(a)(2))
- Vasbinder v. Scott, 976 F.2d 118 (2d Cir.) (punitive damages must be reasonable, with deterrence and punishment objectives)