- Docket No. 12-1632-bk (2nd Cir. May 8, 2013)
- AFFIRMED District Court and held that failing to deliver repossessed vehicle to the debtor promptly after receiving notice of pending petition constituted willful violation of the automatic stay under Chapter 13 of the Bankruptcy Code, and creditor is responsible for actual damages, costs, and attorney's fees.
- Procedural context:
- Appeal from order of United States District Court for the Northern District of New York (Suddaby, J) finding willful violation of the automatic stay and reversing order of United States Bankruptcy Court for the Northern District of New York (Littlefield, J), which had granted summary judgment in favor of the lender and declined to find such violation.
- In August 2006, the borrower and the lender entered into a loan agreement, under which the lender was granted a security interest in a pickup truck. In 2009, the borrower defaulted, and on January 10, 2010, the lender repossessed the truck. On January 14, 2010, the borrower commenced a voluntary Chapter 13 case and requested that the lender return the truck. The lender failed to do so, and accordingly, the borrower/debtor commenced a related adversary proceeding for turnover and alleging a willful violation of the automatic stay. On March 1, 2010, the Bankruptcy Court entered an order to show cause requiring the lender to provide a basis for not returning the truck, and after the hearing thereon, the lender returned the truck. The borrower/debtor subsequently sought damages related to his inability to use the truck from January 14th to March 5th, as well as fees and sanctions for a willful violation of the automatic stay, and the Bankruptcy Court granted the lender summary judgment with respect to those claims, finding that any violation of the automatic stay was not willful. On appeal, the District Court reversed, holding that lender was obligated under United States v. Whiting Pools, Inc., 462 U.S. 198 (1983) (a Chapter 11 case, the reasoning of which the court held should be equally applicable in Chapter 13), to return the truck upon learning of the borrower’s/debtor’s bankruptcy petition and that any failure to do so, with knowledge of the bankruptcy case, was willful.
- Circuit Judges Cabranes, Raggi, and Carney (Decision by Susan L. Carney).
In re Zachary Allen ; Tiara Donegan
Summarizing by Lars Fuller
3267 in the system
3 Being Processed