CLEGG v. COLUMBUS SOUTHERN OHIO ELECTRIC COMPANY, (S.D.Ohio 1978)

SIDMAN, Bankruptcy Judge

A creditor, having made a demand for payment of electric services prior to the commencement of the Chapter XIII proceedings was acting within the scope of its lawful authority under State law, and without the motive of undermining the automatic stay provisions of Bankruptcy Rule 13-401. Thus, despite the effect of the stay, summary judgment was granted requiring the debtor to pay a security deposit with respect to the creditor's post-filing service account. See Rule 13-401 at ¶ 20,971.

The issue to be decided by this Court was whether a public utility could rightfully demand a security deposit from a Chapter XIII debtor.

The total obligation owed to the creditor as of the debtor's filing his Chapter XIII petition was $93.50. Sometime after this filing, the debtors made a $20 payment which was applied to the creditor's post-petition account.

Pursuant to the provisions of Bankruptcy Rule 13-401, the court issued an automatic stay of the commencement or continuation of any actions against the debtors. The creditors thereafter filed a proof of claim for the sum owing at the time of the filing of the petition.

Citing, In Security Investment Properties, Inc., 559 F.2d 1321 (5th Cir. 1977), the Court found that the appropriate test is whether the demand is aimed at reasonably securing future services or whether it is essentially to undermine the automatic stay. In this case, the demand made by the creditor was properly within the scope of its lawful authority under Ohio law, was not prohibited by either the automatic stay provisions of Rule 13-401, previous orders of the Court, or otherwise by law. Consequently, the court granted the creditor's motion for summary judgment.