JAMES J. ROBINSON, Bankrupty Judge.
Lisa Watson ("Watson") and the debtor, Nadine Evette Lanier ("Debtor"), are neighbors. Their homes are in a subdivision in St. Clair County, Alabama, and their residential lots share a common boundary line of approximately 200 feet. A creek or waterway that carries surface drainage runs behind both residences. The waterway flows first across the Debtor's lot and then continues across Watson's lot. The Debtor buried a 36-inch pipe in the waterway to carry the water across her lot. The pipe encroaches 7.16 feet beyond the property line before it empties into the open waterway that flows across Watson's lot. Apparently, the pipe increased the velocity of the water as it emptied onto Watson's property causing erosion and damaging her property.
On February 5, 2019, in an effort to discharge her liability to Watson, the Debtor filed a petition for relief under chapter 7 of the Bankruptcy Code (11 U.S.C. § 101, et seq. and herein, the "Code").
The Debtor contends the stay should not be lifted and that the damages and injunctive relief awarded to Watson by the Circuit Court were for a permanent trespass, as opposed to a continuous trespass, and, therefore, the doctrines of claim preclusion and res judicata bar Watson from pursuing additional damages or other remedies arising from the Debtor's encroachment on Watson's property. The Debtor argued that this bankruptcy court can and should resolve the disputes between the parties, and there is otherwise no legitimate reason to send the parties back to the Circuit Court where the Debtor will incur additional attorney's fees she cannot afford.
This court held a hearing on Watson's stay relief motion and thereafter the parties submitted briefs containing their arguments and authorities (Docs. 54, 55). The court considered the arguments of counsel made at the hearing and in their written submissions, the pleadings and matters of record in the case, and considered the relevant statutory and case law, and concludes that Watson's motion is due to be granted in part and denied in part pending adjudication of her § 523(a)(6) adversary proceeding. However, as discussed below, she is not restrained by the stay from pursuing postpetition claims for any continuous trespass.
The Circuit Court's Order found the Debtor "to be actively trespassing onto [Watson's] property," and that the "trespass include[d] a 36" water pipe, which encroaches 7.16 [feet ] onto [Watson's] property and a chain link fence, which also encroaches onto [Watson's] property."
The Debtor was required to remove the encroachments from Watson's property within sixty days. The Circuit Court also awarded Watson monetary damages of $32,418.77 and attorney's fees of $3,000.00.
Paragraph 3 of the Order itemized the award of damages as follows:
In paragraph 4 the Debtor was ordered "to remove the said Chain Link Fence and . . . to Remove the said 36["] water pipe, which encroaches onto [Watson's] Property within sixty (60) days of this Order."
Read literally, paragraph 5 would require the Debtor to remove the encroachments, including the 7.16 feet at the end of the pipe "in a manner that insures that water does not flow onto [Watson's] property . . . ." However, before the pipe was installed, water flowed across the Debtor's property onto Watson's property. It was the installation of the pipe that caused the water to damage Watson's property. Thus, removing the entire pipe or just the encroaching 7.16 feet won't stop the water from flowing from the Debtor's property onto Watson's property
The final itemization of damages in paragraph 3 of the Order, under the caption "Fountain," anticipated Watson would "connect to the existing 36" pipe and bring the line down to the bridge [and] [o]nce the line is installed we [i.e., Watson] will begin resetting the existing stones for the river bottom covering the new pipe" (emphasis added). If the entire length of pipe buried beneath the Debtor's property were removed, there would be no existing pipe left to which Watson's new pipe could connect. And paragraph 6 provides that "[The Debtor] shall insure that no part of said 36[inch] water pipe and fence will be located on the property of [Watson] after removal."
Thus, when paragraph 5 is considered within the context of the entire Order, it becomes obvious that the "removal" ordered in that paragraph is limited to the encroaching 7.16 feet of pipe and the fence, not the entire length of pipe that is buried across the Debtor's property. To harmonize paragraph 5 with the rest of the Order—and perhaps correct a scrivener's error that used a double negative—it would read as follows:
A critical question is whether the redress awarded to Watson in her Circuit Court lawsuit was for a permanent trespass or a continuous trespass. "If the injury is permanent, damages must be recovered for all time past, present and future. The measure of damages means the difference in the fair market value of the property before and after the trespass, based on the plaintiff's use of the property or adaptability of the property to a particular use prior to the trespass." Borland v. Sanders Lead Co., Inc., 369 So.2d 523, 531 (Ala. 1979). If the Circuit Court's award of damages and injunctive relief to Watson was for a permanent trespass, further claims would be barred by the doctrines of claim preclusion and res judicata. As the court stated in Devenish v. Phillips, 743 So.2d 492, 494-95 (Ala. Civ. App. 1999):
On the other hand, if the Order compensated Watson for a continuous trespass, she would be entitled to damages for additional harm, if any, caused by the Debtor's ongoing trespass occurring after the Circuit Court trial. "Damages for continuous trespass are limited to those which have occurred before and up to the trial. Subsequent damages flowing from a continuance of the trespass give a new cause of action." Ala. Code § 6-5-217 (1975). "Any damages for future loss must be recovered in a later action if and when a subsequent trespass occurs." Borland, 369 So. 2d at 531. "And where the trespass is a continuing one, and not of that class of permanent appropriations, to be assessed for all time at once, there may be successive actions for each continuance of the trespass." Louisville & Nashville R.R. Co. v. Higginbotham, 44 So. 872, 875 (Ala. 1907).
The injunctive relief awarded by the Circuit Court requiring the removal of the encroachments from Watson's property supports a finding that the trespass was considered by that court as being continuous. "[O]ne remedy for a continuing trespass is a permanent injunction, which . . . could provide a removal of the encroachment." Devenish, 743 So. 2d at 494. "A structure maintained on another's property is a continuous trespass." Alabama Power Co. v. Gielle, 373 So.2d 851, 854 (Ala. Civ. App. 1979) (power pole); see also Gaitlin v. Joiner, 31 So.3d 126 (Ala. Civ. App. 2009) (boat dock and boat ramp). Clearly, the protruding 7.16 feet of pipe and fence encroaching on Watson's property are structures maintained on another's property and under Alabama law their ongoing presence on Watson's property constitutes a continuous trespass. Indeed, the Circuit Court's Order found that the Debtor was "actively trespassing" and ordered the removal of the encroachments. And the money damages—apparently based on evidence provided by Watson
A trespass that may be abated—a term more often applied in the context of a nuisance
Accordingly, the uncontroverted facts, including the findings in the Circuit Court's Order and the relief awarded to Watson thereby, confirm that the Debtor's trespass was and is a continuing one that entitles Watson to "a new [postpetition] cause of action." Ala. Code § 6-5-217 (1975).
In light of the Debtor's bankruptcy case, it is necessary to separate the consequences of the Debtor's trespass into three categories: First, with the exception of the injunctive relief requiring removal of the encroachments, enforcement of the Circuit Court's Order should continue to be stayed under Code § 362(a)(2), which prohibits "the enforcement . . . of a judgment obtained before the commencement of the case . . . ." The Debtor's liability under that Order may ultimately be discharged depending on the outcome of Watson's § 523(a)(6) adversary proceeding.
While the court and the parties have expended much time and effort on Watson's motion for stay relief, the case has moved forward and has now been discharged as of October 16, 2019 (the time having been extended to allow a reaffirmation agreement, which has now been filed).
The court cautions the parties that while the stay as to the Debtor terminates upon entry of the discharge according to Code § 362(c)(2), the stay continues in place as to property of the estate until such property is no longer property of the estate according to Code § 362(c)(1). In this case, with no formal abandonment by the trustee, estate property will continue as such until the case is closed, at which time administered assets that the trustee chooses not to pursue will be abandoned back to the Debtor, according to Code § 544. Therefore, while the stay will lift as to the Debtor upon entry of discharge, the stay will remain in effect as to estate property unless and until the property is either abandoned or the case is closed with the property having been administered. The case will not be closed until Watson's § 523(a)(6) adversary proceeding is concluded. The court reminds the parties that while the stay may not protect the Debtor post-discharge, the discharge injunction will immediately take its place. The court cautions the parties to maintain the status quo as to prepetition claims pending the outcome of the adversary proceeding, which is set for trial in December 2019.
Nonetheless, the ongoing encroachment of the 7.16 feet of pipe and the fence constitute a continuing trespass, and give Watson a valid postpetition claim, unrestricted by the stay or the discharge injunction to follow. Although Watson may again seek injunctive relief based on the postpetition, continuing trespass, it would be a waste of judicial resources to require Watson to file another lawsuit seeking the same injunctive relief awarded to her under paragraph 4 of the Circuit Court's Order, especially when her entitlement to such relief is so evident.
Second, inasmuch as the trespass is continuing, Watson was in all likelihood entitled to claim additional damages that occurred after the Circuit Court trial but before the Debtor filed her bankruptcy petition. Watson's pursuit of these second category of damages will continue to be stayed as to any recovery from property of the estate under Code § 362(a) even after entry of the discharge. And whether this second category of damages will be discharged as to the Debtor, like the first category, will depend on the outcome of Watson's adversary proceeding.
Again, recognizing the trespass is continuing, the third category of damages, if any, to which Watson may be entitled are those that accrued after the Debtor filed her bankruptcy case. Remember, Watson is not entitled to recover damages, whether for restoration or abatement, in a postpetition action for the harm to her property that was awarded in the Circuit Court's Order or that occurred in the hiatus between the Circuit Court trial and the bankruptcy petition date; those first and second category of damages will either be discharged or declared nondischargeable in Watson's adversary proceeding, but unless and until the latter occurs, and so long as the bankruptcy case remains open, an attempt to collect those damages from property of the estate will constitute a stay violation. From what this bankruptcy court has learned thus far from the record, separating prepetition and postpetition damages will be a difficult task because it appears most of the damage had already occurred when the Debtor filed her bankruptcy case.
Accordingly, it is hereby ORDERED that pursuant to Code § 362(d), Watson's motion (Doc. 38) to terminate the stay is GRANTED IN PART, as to both the Debtor and property of the estate, but only to the extent necessary for the enforcement of the injunctive relief ordered in paragraph 4 of the Circuit Court's Order that required removal of the encroachments within sixty (60) days and provided, further, that all other relief sought in Watson's motion (Doc. 38) is DENIED.
It is further ORDERED that should Watson elect to commence an action against the Debtor for additional harm, if any, to Watson's property that occurred postpetition, such action shall NOT attempt to enforce or collect against estate property the awards and relief provided in the Circuit Court's Order beyond the limited stay relief granted above.
So done and ordered.
