In re Ohakpo, 494 B.R. 269

Prior to the Chapter 7 filing, state court officers Lotycz and Jones seized two automobiles from Simeon Ohakpo to satisfy a pre-petition judgment in favor of RBS Citizens, N.A.
The state court order directed seizure for payment of the judgment and costs, but the cars remained in the officers’ possession when the bankruptcy case was filed.
The debtors opposed sanctions against the officers for stay violations; the officers sought relief under § 543(c) as custodians with entitlement to fees and costs.
The Court determined that Lotycz was a custodian under § 101(11)(C) and authorized to enforce a lien to pay the RBS judgment, while Jones was not.
The automobiles were ultimately delivered to the Chapter 7 Trustee, not to the Debtors, and post-seizure costs were incurred for towing and storage.
The court awarded Lotycz $32.00 in fees and $2,039.50 in costs under § 543(c)(2), but denied non-dischargeable treatment and administrative expense status under § 503(b)(3)(E).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Lotycz and Jones custodians under § 101(11)(C)?	Lotycz is custodian; Jones is custodian.	Only Lotycz was appointed to seize; Jones was not.	Lotycz is custodian; Jones is not.
Does seizure to enforce a lien against property qualify as custodian purposes under § 101(11)(C)?	Seizure to enforce a lien on Ohakpo’s property to pay the RBS judgment satisfies custodian criteria.	Custodian must benefit all creditors when enforcing a lien.	Enforcement of a lien suffices; benefit to all creditors is not required.
What relief may a custodian obtain under § 543(c)(2)?	Custodian is entitled to compensation and costs.	Costs/fees must be supported by Michigan statutes and must fall under § 543(c)(2) and possibly § 503(b)(3)(E).	Award of $2,039.50 costs and $32.00 fee under § 543(c)(2); no extra compensation beyond Michigan limits.
Should the § 543(c)(2) award be treated as a non-dischargeable judgment or as an administrative expense?	Should be non-dischargeable or priority administrative expense.	There is no personal liability to Debtors; no non-dischargeable judgment; may be administrative expense only if benefit shown.	Not non-dischargeable; not allowable as administrative expense absent proven benefit to the estate.

Skinner v. First Union National Bank, 213 B.R. 335 (Bankr.W.D. Tenn. 1997) (custodian analysis supports lien-enforcement as custodial purpose)
In re Taylor’s of St. Petersburg, Inc., 110 B.R. 593 (Bankr.M.D. Fla. 1990) (possession prepetition may not qualify as custodian unless for all creditors)
In re Sanders, 551 F.3d 397 (6th Cir. 2008) (rule of last antecedent in statutory interpretation for § 101(11)(C))
United States Leather, Inc. v. Mitchell Mfg. Grp., Inc., 276 F.3d 782 (6th Cir. 2002) (execution lien concepts support possessory lien interpretation)
In re Ann Arbor Mach. Co., 278 F. 749 (E.D. Mich. 1922) (early articulation of execution lien concepts)
Williams v. Banana Distrib. Co., 59 F.2d 645 (6th Cir. 1932) (priority among creditors and execution liens in Michigan context)