FRANK ALLEY, Bankruptcy Judge
Plaintiffs filed an adversary proceeding seeking damages from an agency of the State of Oregon for willful violation of the automatic stay. 11 U.S.C. § 362(h). The State has filed a motion for summary judgment. Fed R. Bankr. P. 7056. After reviewing the record and considering the arguments of the parties, I conclude that the material facts are undisputed, and that the State is entitled to prevail as a matter of law.
I. FACTS
Plaintiffs are the debtors in an underlying Chapter 13 case filed on June 12, 2002. An order confirming the plan (Doc. # 7) was entered on August 29, 2002. The order provides that creditors are to receive payment of 100% of their claims.
The Court takes judicial notice of the papers filed in the Chapter 13 case. Fed.R.Evid. 201.
The State of Oregon, acting through the Department of Human Services, filed a proof of claim (#1) on June 20, 2002, in the amount of $654.00. The account described in the claim was in the name of Victoria Davids, although an attached report identified Colin Davids as an "other liable adult." Priority treatment was not sought.
After the plan was confirmed, the Trustee began to make pro rata monthly payments to creditors with allowed claims, including the State. Upon receipt of each payment from the Trustee, the State followed its standard procedure by issuing a document entitled "Overpayment Statement of Account" which acknowledged receipt of the payment and that it had been credited to the Plaintiffs' account. The statement went on to say that "Your next payment is due [four weeks later]. Please detach the form below and return with your payment in the enclosed envelope, to ensure proper credit to your account." A copy of one of the statements is set out in the appendix to this opinion, with Social Security and account numbers redacted.
The statements were mailed to the Debtors. In its supporting affidavit, the State notes that its "somewhat cumbersome" computer system did not permit substitution of the Trustee for the Debtors. There is, however, a field ordinarily used in bankruptcy cases which prevents any statement from being issued. In this case, state personnel failed to enter the bankruptcy notation. As a result of the oversight, the statements were generated and mailed after each payment as if the bankruptcy case had not been commenced.
Plaintiffs allege that the issuance and delivery of the statements constitutes a willful violation of the automatic stay, and seek damages for actual economic loss, and emotional distress.
Plaintiffs conceded at oral argument that their claim for punitive damages was not supported by the facts of this case.
II. DISCUSSION A. Summary Judgment
Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, admissions, and affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56, made applicable by F.R.Bankr.P. 7056. The movant has the burden of establishing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The primary inquiry is whether the evidence presents a sufficient disagreement to require a trial, or whether it is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).
A party opposing a properly supported motion for summary judgment must present affirmative evidence of a disputed material fact from which a factfinder might return a verdict in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). Bankruptcy Rule 7056, which incorporates Federal Rule of Civil Procedure 56(e), provides that the nonmoving party may not rest upon mere allegations or denials in the pleadings, but must respond with specific facts showing there is a genuine issue of material fact for trial. Absent such response, summary judgment shall be granted if appropriate. See Celotex Corp. v. Catrett, 477 U.S. 317, 326-27 (1986). B. Automatic Stay
Code § 362(a) provides:
Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of —
* * *
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;
The purpose of this provision is to allow breathing room to a debtor seeking to reorganize, and to enable bankruptcy courts to oversee the process. While the language of § 362(a)(6) seems absolute, it is well established that the Code does not operate to deny creditors the opportunity to make their claims known, or to take noncoercive action to preserve their rights. See, e.g.,Morgan Guaranty Trust Company of New York v. American Savings and Loan Association 804 F.2d 1487 (9th Cir. 1986) (presentment of notes not barred by automatic stay); Brown v. Pennsylvania State Employees Credit Union, 851 F.2d 81 (3d Cir. 1988) (Letter from Credit Union advising of its policies re: members who file bankruptcy petitions); LTV Corporation v. Gulf States Steel, Inc. Of Alabama, 969 F.2d 1050 (Notice of breach to indemnitor); In re Sixteen to One Mining Corp., 9 B.R. 636 (Bankr. D. Nev. 1981) (Notice of breach of lease, without attempt to recover property); Sears, Roebuck Co. V. Duke, 1995 WL 15172 (N.D. Ill 1995) and cases collected therein (written communication offering to enter into reaffirmation agreement).
In Morgan the Court of Appeals considered the whole of § 362, and noted that
the activities that are specifically prohibited all involve attempts to confiscate the debtor's property or require the debtor to act affirmatively to protect its interests. Presentment and other requests for payment unaccompanied by coercion or harassment do not appear to fall within the prohibitions of section 362(a).
Morgan Guaranty Trust Company of New York v. American Savings and Loan Association,
804 F.2d at 1490.
In this case, the only acts complained of are the delivery to Victoria Davids of three statements. Plaintiffs did not file any affidavits supporting their position, and their Statement of Material Facts does not take issue with any matter asserted by the Defendant. There is no extrinsic evidence of any harassment or coercion. Instead, Plaintiffs argue that the statement is inherently coercive.
It was revealed at oral argument that the State's computers, like the sorcerer's apprentice's brooms, are continuing their work, and that statements are still being mailed to the plaintiffs. It is worth noting that the outcome of this case is based on the content of the communication, and not the state's inability to control its electronic servants. See In re Campion, 294 B.R. 313 (BAP 9th Cir. 2003) ("We perceive no difference as a practical matter between a computer program that does not perform tasks accurately and a clerical employee who does not perform tasks accurately.")
The statements themselves have three functions: (1) to acknowledge receipt of a payment; (2) to inform of the remaining balance; and (3) to provide for future payment in a manner that ensures proper credit to the account. Had they been mailed to the Trustee, they would have been entirely unremarkable. The effect of delivery of the statements to the Debtors is simply to advise them that a portion of their Chapter 13 plan payments are being sent by the Trustee to the State as their plan requires, and that they are receiving due credit for payment. The part of the statement suggesting further payment is not a demand so much as an instruction to be used in the event a payment is volunteered. There is nothing about the statements which can reasonably be construed as coercive, threatening, or demanding. There is no attempt to seize assets from the Debtors or the estate, or to force the Debtors to take any action. All that the statements do is confirm that actions already taken voluntarily by the Debtors continue to be effective.
Plaintiffs have the burden of proving that the delivery of the statements was a violation of the automatic stay. TransSouth Fin. Corp. v. Sharon (In re Sharon), 234 B.R. 676, 687 (BAP 6th Cir. 1999) (When damages are sought under § 362(h) for violation of the automatic stay, the party seeking damages bears the burden of proof). The record now before the court is uncontested, and does not meet that burden. At worst, the delivery of the statements is no more than "a request for payment unaccompanied by coercion or harassment." More likely, it is not even an "act to collect, assess or recover a claim," but an acknowledgment of the Debtors' voluntary payment through the plan. I find, as a matter of law, that issuance and delivery of the account statements was not prohibited by § 362, and that the State is entitled to judgment in its favor. In light of the foregoing, I express no opinion with respect to the nature or amount of damages sought by Debtors.
The foregoing constitutes the Court's findings of fact and conclusions of law. Counsel for the State shall lodge a form of judgment consistent with this opinion, awarding costs to the State.