JAMES K. COACHYS, Judge United States Bankruptcy Court.
This matter comes before the Court on the Debtor's Amended Emergency Motion to Enforce Automatic Stay and Motion for Order to Show Cause, filed against the Health and Hospital Corporation of Marion Count, Indiana (the "Corporation"). Following a hearing, the Court took the matter under advisement and now issues the following Order, wherein it finds that the Corporation has not violated the automatic stay with respect to the Debtor.
Facts and Procedural History
The Debtor commenced a case under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 101, et seq. (the "Code"), on September 22, 2000. The case was converted to one under Chapter 13 on November 9, 2000. Per his amended plan, the Debtor surrendered certain parcels of real estate, including those located at 1918, 2045, 2049, 2055 Houston Street, Marion County, Indiana (the "Parcels"), to the relevant secured creditors.
Notwithstanding his intended "surrender" of these Parcels, the Debtor apparently retained title to them. In August of 2001, the Corporation filed four complaints in Marion Superior Court, Environmental Division, seeking injunctive relief against the Debtor, as well as fines, based on the poor condition of the Parcels. According to the Corporation, the Parcels contained high weeds, rubbish and junk in violation of the Housing and Environmental Standards Ordinance, enacted by the Corporation pursuant to Indiana Code § 16-22-8-34. The Corporation asked that the Debtor be ordered to correct the violations and that he be charged fines for failing to abide by administrative orders issued to him by the Corporation in April and May of 2001.
Per this statute, the Corporation is authorized to enact and enforce ordinances dealing with matters of public health, disease and safety.
On October 18, 2001, the Debtor filed an Amended Emergency Motion to Enforce Automatic Stay and Motion for Order to Show Cause in this Court, which alleged that the Corporation had violated the automatic stay provided by § 362(a) of the Code. On that same day, the Court entered an Emergency Order directing the Corporation to cease all action against the Debtor until the matter could be fully heard. The Court also ordered the Corporation to appear on November 6, 2001, and show cause as to why it should not be held in contempt. Following the November 6th hearing, the Court took the matter under advisement and now holds that the Corporation did not violate the automatic stay when it brought its environmental actions against the Debtor.
Discussion and Decision
Section 362 of the Code provides in relevant part that:
(a) Except as provided in subsection (b) of this section, a petition . . . operates as a stay, applicable to all entities, of —
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;
(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property of the estate;
(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and
(8) the commencement or continuation of a proceeding before the United States Tax Court concerning the debtor.
In his motion, the Debtor alleges only generally that the Corporation violated the automatic stay in filing its complaints. However, it is not apparent to the Court which specific subsection of § 362(a) is implicated here. The Corporation's actions deal only with the Debtor's post-bankruptcy activities. While the Corporation has sought the imposition of fines, that request alone does not constitute action against property of the estate. Furthermore, the injunctive relief sought by the Corporation, i.e., that the Debtor be forced to clean up the Parcels, does not clearly constitute an "act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate," as prohibited under § 362(a)(6). Thus, the Court is not entirely sure that any provision of § 362(a) is implicated here.
However, even assuming that Code § 362(a) was violated, the Corporation's action are exempted from the automatic stay pursuant to § 362(b)(4). That section provides in relevant part that:
(b) The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay —
(4) under paragraph (1), (2), (3), or (6) of subsection (a) of this section, of the commencement or continuation of an action or proceeding by a governmental unit . . . to enforce such governmental unit's . . . police and regulatory power, including the enforcement of a judgment other than a money judgment, obtained in an action or proceeding by the governmental unit to enforce such governmental unit's or organization's police or regulatory power . . . .
In applying this exception, the Court must look to the purpose of the law that the government is attempting to enforce. If the purpose of the law is to promote public safety and welfare, see Universal Life Church, Inc. v. United States (In re Universal Life Church, Inc.), 128 F.3d 1294, 1297 (9th Cir. 1997), or to effectuate public policy, see NLRB v. Edward Cooper Painting, Inc., 804 F.2d 934, 942 (6th Cir. 1986), then the exception applies. However, if the purpose of the law relates to the protection of the government's pecuniary interest in the debtor's property, see Universal Life, 128 F.3d at 1297, or to adjudicate private rights, Edward Cooper, 804 F.2d at 942, then the exception is inapplicable.
Based on these distinctions, the Court must conclude that the § 362(b)(4) exception applies to the present case. The Corporation is seeking to enforce an ordinance that promotes public safety and welfare. There is no private or pecuniary interest at stake in the Corporation's actions, even with respect to the requested fines, which are designed to be both deter and punish violations of the ordinance. Accordingly, there is no question that the Corporation was not subject to the automatic stay when it commenced its actions against the Debtor. As such, the Corporation is free to pursue its pending actions against the Debtor. However, the Court cautions the Corporation that if it does recover a money judgment against the Debtor, then it must seek relief from the stay before attempting to collect it. See 11 U.S.C. § 362(b)(4).