Nacinovich v. Holiday City at Berkeley Shareholders Corporation
13-01074
Bankr. D.N.J.May 31, 2013Background
- Debtors filed a Chapter 7 petition; Holiday City was listed as a creditor for unpaid assessments on non-residential property in an age-restricted community.
- Trustee abandoned the property on October 27, 2012; debtors received a discharge on November 30, 2012.
- Plaintiff received a Holiday City billing statement for $2,290 on November 21, 2012, alleging an in-person collection after discharge.
- Holiday City claimed it only updated a ledger reflecting unpaid balances and that it was a secured creditor with a lien recorded in 2009 for $570.
- Court found Holiday City’s Declaration of Covenants and Restrictions creates a continuing lien and that the lien supports pursuing the full amount on the property after abandonment.
- Court concluded the remittance of the billing statement was not a violation of the automatic stay because the lien supports the full amount and was valid when the statement was sent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sending a billing statement constitutes a stay-violating collection | Nacinovich argues it was an in-persona collection attempt after discharge | Holiday City says it merely updated an unpaid balance ledger | Yes, it constitutes a collection attempt, but resolved by lien analysis. |
| Whether Holiday City’s lien supports the full amount claimed in the billing statement | Lien limited to $570, so excess is unsecured | Declaration creates a continuing lien for full unpaid assessments plus interest | Yes, the lien covers the full amount claimed and supports the billing amount. |
| Whether automatic stay was violated given abandonment and lien status | Stay applies to post-petition collection | Lien valid; abandonment ends trustee’s involvement; can collect in rem | Not violated; lien enforcement after abandonment permissible. |
Key Cases Cited
- Highland Lakes Country Club & Community Ass'n v. Franzino, 186 N.J. 99 (N.J. 2006) (affirms HOA covenants; common-interest developments)
- Sbraga v. Cape May Harbor Village & Yacht Club Ass'n, Inc., 421 N.J. Super. 56 (App. Div. 2011) (courts treat HOA covenants as controlling in lien context)
- Leisuretowne Ass'n v. McCarthy, 193 N.J. Super. 494 (App. Div. 1984) (recording declarations creates enforceable liens)
- Rittenhouse Park Community Ass'n v. Katznelson, 223 N.J. Super. 595 (Ch. Div. 1987) (notice and lien implications for covenants)
- Mulligan v. Panther Valley Property Owners Ass'n, 337 N.J. Super. 293 (App. Div. 2001) (later-adopted covenants guidance; original terms favored)