571 B.R. 687
Bankr. E.D. Pa.2017Background
- Debtor filed a Chapter 13 petition on December 22, 2015; plan later confirmed.
- Debtor’s schedules listed City/Traffic Court (addresses); bankruptcy notices were mailed by the court and debtor’s counsel served a notice of continued §341 meeting on April 13, 2016.
- PPA impounded Debtor’s vehicle on June 10, 2016 and retained it for six days; PPA released the car on June 16, 2016.
- Parties agree PPA impounded the car postpetition, PPA received oral notice and released the car on June 16, 2016; dispute centers on whether PPA had notice earlier.
- Debtor seeks damages under 11 U.S.C. § 362(k) for an alleged willful stay violation; PPA raises immunity defenses under Pennsylvania’s PSTCA and §106 of the Bankruptcy Code and moves for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PPA is immune from §362(k) damages under Pennsylvania’s PSTCA | PSTCA cannot shield PPA from a federal Bankruptcy Code remedy | PSTCA provides state-law immunity that bars damages | PSTCA cannot trump federal law; Supremacy Clause/Katz mean PSTCA doesn’t bar §362(k) claims |
| Whether Eleventh Amendment or §106(a) bars suit | Katz/Constitutional supremacy permit bankruptcy remedies against governmental units | PPA contends sovereign-immunity principles (and §106) limit liability | Eleventh Amendment not applicable to local PPA; Katz defeats sovereign immunity defense; §106(a)(3) limits punitive damages only |
| Scope of §106(a)(4) — does it incorporate state immunity when enforcing money judgments | Debtor: §106(a)(4) does not incorporate state immunity to defeat monetary awards | PPA: §106(a)(4) requires enforcement be consistent with nonbankruptcy law (i.e., PSTCA) | §106(a)(4) does not shield PPA from liability; it governs post-judgment collection procedures, not immunity from a §362(k) award |
| Whether PPA willfully violated the automatic stay (knowledge timing) | Debtor: PPA had notice before or during retention (written April notice; multiple verbal notices June 11–14; counsel called June 13) | PPA: Denies receiving prior notice; credibly asserts first internal record search and receipt on June 16 | Material factual dispute exists about when PPA received notice; summary judgment denied on liability (credibility/evidence to be resolved at trial) |
Key Cases Cited
- In re Lansaw, 853 F.3d 657 (3d Cir.) (willfulness requires knowledge of bankruptcy filing; acts must be intentional)
- In re Atlantic Bus. & Cmty. Corp., 901 F.2d 325 (3d Cir.) (knowledge of stay and intentional acts constitute stay violation)
- Central Va. Cmty. Coll. v. Katz, 546 U.S. 356 (Supreme Court) (bankruptcy in rem jurisdiction can abrogate state sovereign immunity in bankruptcy matters)
- In re Diaz, 647 F.3d 1073 (11th Cir.) (automatic-stay enforcement actions facilitate bankruptcy in rem jurisdiction)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court) (summary judgment framework and burdens)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court) (definition of genuine issue of material fact on summary judgment)
- In re Sacred Heart Hosp. of Norristown, 133 F.3d 237 (3d Cir.) (prior holding on §106(a) and state immunity discussed)