IN RE COFFMAN

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Docket Number

No. 10-03610-FLK13.

Acts

Bankruptcy — Case Administration — Administrative Powers — Automatic Stay
Judiciary And Judicial Procedure — District Courts; Jurisdiction — Jurisdiction And Venue — Bankruptcy Cases And Proceedings
Judiciary And Judicial Procedure — Bankruptcy Judges — Organization Of Courts — Procedures

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Smart Summary

Factual and Procedural Background

Paul D. Coffman and Janet Sue Coffman filed a Chapter 13 bankruptcy petition on June 17, 2010. At filing, they owned a 1996 Chevrolet Tahoe purchased from creditor Sundance Auto under a Retail Installment Contract. The Chapter 13 plan filed by the debtors provided for retention of the Tahoe and payment of the secured debt owed to Sundance Auto. On June 20, 2010, Sundance Auto was sent notice of the bankruptcy and the Chapter 13 plan, which included advisement of the automatic stay prohibiting repossession of the debtors' property.

Shortly after receiving notice, Joel Elder, President of Sundance Auto, contacted Mr. Coffman about a repair bill and a late payment, threatening repossession fees unless the Tahoe was returned. Mr. Coffman, under this threat, delivered the Tahoe to Sundance Auto. Although Mr. Elder denied knowledge of the bankruptcy at that time, the court found otherwise based on the evidence and notice sent. Following this, the debtors' attorney demanded return of the vehicle, but Sundance Auto refused to return it.

The debtors filed a Motion for Contempt alleging Sundance Auto and Joel Elder willfully violated the automatic stay under 11 U.S.C. § 362. The court held a hearing on October 25, 2010, considering testimony and exhibits, to determine whether contempt sanctions were warranted.

Legal Issues Presented

Whether Joel Elder and Sundance Auto willfully violated the automatic stay under 11 U.S.C. § 362 by retaining possession of the debtors' vehicle after receiving notice of the bankruptcy.
Whether the debtors are entitled to actual damages, attorney fees, and costs as sanctions for the violation of the automatic stay under 11 U.S.C. § 362(h).

Arguments of the Parties

Debtors' Arguments

Sundance Auto and Joel Elder were properly notified of the bankruptcy and the automatic stay.
Despite notice and demand for return, Sundance Auto willfully retained possession of the Tahoe in violation of the stay.
The debtors suffered damages from the loss of possession of their vehicle and seek contempt sanctions including actual damages, attorney fees, and costs.

Joel Elder and Sundance Auto's Arguments

Joel Elder denied knowledge of the bankruptcy filing at the time he contacted Mr. Coffman and repossessed the vehicle.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
11 U.S.C. § 362	Automatic stay prohibiting creditor actions against debtor's property after bankruptcy filing	Found that Sundance Auto and Joel Elder willfully violated the automatic stay by retaining the vehicle after notice.
11 U.S.C. § 362(h)	Sanctions for willful violation of the automatic stay including actual damages, attorney fees, and costs	The court determined sanctions were appropriate but declined to award actual damages due to lack of evidence quantifying damages.
28 U.S.C. §§ 1334 and 157	Jurisdiction and core proceeding authority for bankruptcy matters	The court confirmed jurisdiction over the contempt proceeding as a core bankruptcy matter.

Court's Reasoning and Analysis

The court analyzed the timeline and evidence regarding notice of the bankruptcy and the automatic stay. It found that Sundance Auto and Joel Elder received actual notice of the bankruptcy and the stay prohibiting repossession of the debtors' vehicle. Despite this, they took possession of the vehicle and refused to return it upon demand, constituting a willful violation of 11 U.S.C. § 362. The court rejected Mr. Elder's denial of knowledge based on the evidence presented.

Regarding damages, the court acknowledged that the debtors suffered harm from loss of use of their vehicle for over 60 days. However, the debtors failed to provide sufficient evidence to quantify actual damages, so the court could not award monetary damages. The court determined that attorney fees and costs were appropriate sanctions under 11 U.S.C. § 362(h), but punitive damages were not warranted.

The court ordered immediate return of the vehicle to the debtors and allowed a timeframe for submission and objection to attorney fees and costs before entering final judgment.

Holding and Implications

The court held that Joel Elder and Sundance Auto willfully violated the automatic stay under 11 U.S.C. § 362 and granted the debtors' Motion for Contempt.

As a consequence, Sundance Auto and Joel Elder are ordered to immediately return possession of the 1996 Chevrolet Tahoe to the debtors. The debtors are permitted to file affidavits for attorney fees and costs related to the contempt motion, with an opportunity for objections before final judgment. No actual damages were awarded due to insufficient evidence, and no punitive damages were granted. This decision enforces the protections of the automatic stay in bankruptcy cases and underscores the court's authority to impose sanctions for willful violations, but it does not establish new legal precedent beyond the application of existing statutory provisions.

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In re: PAUL D. COFFMAN JANET SUE COFFMAN Debtors.

DECISION RE: CONTEMPT

FRANK KURTZ, Bankruptcy Judge

This matter having come on for hearing on October 25, 2010 before Bankruptcy Judge Frank L. Kurtz upon the Order to Show Cause issued by the Court on October 13, 2010. The show cause order required Joel Elder, President of Joel Elder Sundance Auto Sales, Inc., to appear before this court to show cause why Joel Elder and Joel Elder Sundance Auto Sales, Inc. (hereinafter referred as Sundance Auto), should not be held in contempt for actions taken in violation of the 11 U.S.C. § 362 automatic stay. Mr. Elder appeared as ordered and he was represented by George Hansen. Debtors Paul and Janet Coffman appeared and they were represented by attorney Robert Reynolds. At the hearing the court heard and considered the evidence of witnesses Paul Coffman, Donna Elder, Bobby Elder, and Joel Elder. The court considered all exhibits submitted by the parties that were admitted as evidence.

Based upon the evidence heard and considered by the court, the court makes the following finds of fact:

1) Paul D. Coffman and Janet Sue Coffman filed a petition for relief under chapter 13 of Title 11 on June 17, 2010.

2) At the time the petition was filed, the debtors owned a 1996 Chevrolet Tahoe, which they purchased from creditor Sundance Auto, according to the terms and conditions set forth in debtors' Exhibit 5, a Retail Installment Contract.

3) On the petition date, the debtors filed a chapter 13 plan, which provided, in part, for the retention of the Chevrolet Tahoe and the payment of the debt secured by the Tahoe automobile and owed to creditor Sundance Auto.

4) On June 20th a notice of the chapter 13 bankruptcy and a copy of the chapter 13 plan was sent to creditor Sundance Auto at 505 South First Street, Yakima, WA 98901-3205.

5) The notice sent to creditor Sundance Auto advised the creditor about actions prohibited by the stay, including repossessing the debtors' property.

6) Shortly after creditor Sundance Auto received actual notice of the Coffmans' bankruptcy, Joel Elder contacted Mr. Coffman about a repair bill and about a late payment for the Tahoe automobile. He threatened Mr. Coffman with a repossession fee, unless Mr. Coffman returned the Tahoe. As a result of this conversation, Mr. Coffman delivered the Tahoe to creditor Sundance Auto.

7) Mr. Elder denies he knew about the Coffmans' bankruptcy filing at the time he contacted Mr. Coffman but based upon the mailing of the bankruptcy notice to creditor Sundance Auto and based upon the testimony of Mr. Coffman, the Court does not accept this testimony and specifically finds he acted with knowledge of the bankruptcy.

8) Thereafter Mr. Elder and creditor Sundance Auto was contacted by attorney Robert Reynolds, who represented the Coffmans in their chapter 13 bankruptcy case. On the Coffmans' behalf, Mr. Reynolds demanded that the Tahoe automobile be returned to the Coffmans.

9) Despite this request, creditor Sundance Auto continued to retain possession of the Tahoe automobile.

10) Creditor Sundance Auto and its President Joel Elder willfully violated the automatic stay of 11 U.S.C. § 362.

11) For more than 60 days, the debtors have been denied possession and use of the Tahoe automobile. The debtors have been damaged by the violation of the automatic stay but they have failed to provide the court with evidence upon which the court could base its damage award.

Based upon the Court's finding, the Court enters the following conclusions of law:

1) This court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 1334 and 157.

2) The debtors' Motion for Contempt for Violation of Stay is a core proceeding under 28 U.S.C. § 157(b).

3) The debtors have satisfied their burden of proof that Joel Elder and Joel Elder Sundance Auto's violation of the automatic stay was willful and that actual damages, attorney fees and costs are appropriate as sanctions under section 362(h), but not punitive damages. Although the court has found that there was damages, the court cannot make an award of actual damages because the court cannot speculate as to the amount of damages.

Now therefore, IT IS ORDERED a separate order will be entered granting the debtors' Motion for Contempt against Joel Elder and Sundance Auto; Joel Elder and Sundance Auto shall immediately restore possession of the Tahoe automobile to the debtors; the debtors and their attorney will be granted 10 days to file an affidavit of attorney fees and costs incurred in relation to the debtors' Motion for Contempt, together with contemporaneous time records; Joel Elder and Sundance Auto will be granted 10 days thereafter in which to file any objections to the reasonableness of the fees and costs requested; and if no timely objections are filed with the Court, the Court will enter judgment in accordance with this decision.

Done this 12th day of November, 2010

Notice Recipients

District/Off: 0980-2 User: barbrat Date Created: 11/12/2010 Case: 10-03610-FLK13 Form ID: pdf002 Total: 2 Recipients of Notice of Electronic Filing: aty Robert J Reynolds reynoldsrobertrj@qwestoffice.net TOTAL: 1 Recipients submitted to the BNC (Bankruptcy Noticing Center): cr Joel Elder's Sundance Auto Sales 505 South 1st St Yakima, WA 98901 TOTAL: 1