Geraldine Mund, United States Bankruptcy Judge.
Chase brings this motion for summary judgment. The sole remaining cause of action is for failure to turn over the vehicle that was repossessed prepetition, both under 11 U.S.C. § 542(a) and § 362. The motion was heard on October 20, 2015. In preparation for the hearing, the Court created a chronology and sent it out to the parties for their comments. At the hearing the Court went over the comments and created an agreed-to version of the chronology, which, with some later refinements
The chronology gives a general picture of the events upon which this complaint is based and also points out some disputed facts. It also creates an evidentiary base for determining this motion.
The Court finds that the facts set forth below in normal typeface are no longer in dispute, while facts in dispute and/or without evidentiary support are in italics:
Perry did not file this adversary proceeding until February 2010, some ten months after the car was sold. Therefore, the equitable doctrine of laches should bar his claim for violation of § 542. Further because the value to the bankruptcy estate is little or nothing, § 542 is not applicable. Perry scheduled the value of the car at $9,000 and the amount of the Chase claim at $9,000. Therefore the trustee really could not use, sell, or lease this car.
Chase then argues that it moved expeditiously for relief from stay, filing its motion just 27 days after the bankruptcy was filed. It had rights in the vehicle that were superior to those of Perry, who only had the right to redeem the car. In re Fitch, 217 B.R. 286 (Bankr.S.D.Cal.1998). Perry never tendered the funds to redeem and there is no showing that he was capable of doing so.
Fitch also held that the creditor could retain possession of the car pending the outcome of the motion for relief from stay. A creditor's refusal to immediately turn over the vehicle to the debtor is not a violation of the stay and thus not a violation of § 542.
Chase acted expeditiously to file its motion for relief from stay. Further, Chase was maintaining and continuing perfection of its possessory lien rights under the contract that it had with Perry and this cannot be a violation of the stay under § 362(b)(3).
On September 29 Perry filed his opposition, composed of four documents: an opposition to the motion (which is also in the form of a declaration), a request for judicial notice, a proposed statement of uncontroverted facts and conclusions of law, and a memorandum in support of a motion to strike the declaration of Attorney Jeff Allsop because it is not on personal knowledge and thus it is not admissible.
As a matter of law, the non-moving party need not put forth any evidence until the moving party has shown by admissible evidence that it would be entitled to judgment in its favor. Celotex v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The opposing party can use hearsay evidence if the out-of-court declarant could later present the evidence in a form that would be admissible at trial. J.F. Feeser, Inc, v. Serv-A-Portion, Inc., 909 F.2d 1524, 1542 (3d Cir.1990).
As to the timing of the redemption issue, the defendants did not serve Perry with any such redemption papers until he obtained them through the State Court discovery process.
As to when the adversary proceeding was filed, an adversary proceeding is not necessary for the Debtor to obtain damages for a stay violation. It can also be by motion as a contested matter under Fed. R. Bankr. P. 9014.
The only way that Chase could perfect its lien was through possession because the "rewrite agreement" did not become effective. Thus, Chase was required to return the car — although it could request adequate protection. But if the Debtor does not agree to the adequate protection, the burden is on the creditor to request a hearing, though the burden is on the Debtor to prove that the creditor's rights will be adequately protected. To avoid turnover of the car due to lack of adequate protection, the creditor can request an emergency hearing under § 362(f). Expeditors Int'l of Wash. v. Colortran (In re Colortran), 210 B.R. 823, 827-28 (9th Cir. BAP 1997), aff'd in part and vacated in part on other grounds, 165 F.3d 35 (9th Cir.1998).
Chase and Key had an affirmative duty to terminate possession of the vehicle when they learned of the bankruptcy case. Since this was exempt property, turnover to the Debtor was appropriate. Mwangi v. Wells Fargo Bank (In re Mwangi), 432 B.R. 812, 823 (9th Cir. BAP 2010). Perry had continuing rights in the car.
Perry's exemption rights were automatic and he did not have to make a claim. It was the duty of the possessor to return the property — not of the Debtor to pursue its return. California Empl. Dev. Dep't v. Taxel (In re Del Mission), 98 F.3d 1147, 1151 (9th Cir.1996). Even if the creditor did not intend to violate the stay, once it knows of the stay, it bears the risk of all intentional acts that do violate the stay. Assoc. Credit Servs. v. Campion (In re Campion), 294 B.R. 313, 318 (9th Cir. BAP 2003). If it is a willful violation, the Debtor is entitled to recover actual and punitive damages as sanctions under § 362(k). Even if the defendant believes in good faith that it had a right to the property, this is not relevant to whether the act was willful. Johnston Envtl Corp. v. Knight (In re Goodman), 991 F.2d 613, 618 (9th Cir.1993).
Even though the defendants no longer have the property, § 542 requires them to turn over the value of the property.
Perry then goes on to make a technical argument about whether the answers to the amended complaint were late and thus he would be entitled to judgment against the defendants. This also deals with whether the defendants are allowed to seek discovery. [Note by the Court: I am not aware of any discovery pending at this time and thus there is no issue here to be dealt with. As to striking the answers, I do not believe that Mr. Perry's argument is well taken.]
All reasonable inferences must be construed in the light most favorable to the plaintiff. Mere conclusions and unsupported factual allegations are insufficient to support a summary judgment motion.
Chase has submitted a bogus title to the 2001 Nissan Pathfinder. Paper title was given by Chase to Perry. Chase violated TILA on April 2009 by failing to provide him with notice of the sale, transfer or assignment because they had surrendered title to him in August 2004 and thus they had no lien. In support of the motion for relief from stay [BK dkt. # 15], they show a request for paper title and assert that electronic title was sufficient. However, Chase had assigned Perry title before 15 U.S.C. § 1641(g) was enacted and thus an obligation existed for Chase to provide notice of title change to Perry and not just seek an Electronic Title.
This is not a reconsideration of the relief from stay motion and order. The value of the car to the bankruptcy estate is inconsequential and Perry does not address § 542(a) as to this. Perry valued the car at $9,000 and Chase states that he owed $8,100 on it.
As noted in Fitch, Chase had rights that were superior to Perry's right to possession and thus it was correct that Chase could keep the car pending the motion for relief from stay. Beyond that, Chase's possession of the car pending a ruling on the motion for relief from stay "constituted a maintaining and continuing perfection of CHASE's possessory lien rights under the contact" and that cannot be a violation of the automatic stay. 11 U.S.C. § 362(b)(3); Hayden v. Wells (In re Hayden), 308 B.R. 428 (9th Cir. BAP 2004); Boggan v. Hoff Ford (In re Boggan), 251 B.R. 95 (9th Cir. BAP 2000).
The cases cited by Perry are off point and distinguishable.
The motion to strike Allsop's declaration is without merit. It is made with personal knowledge and also falls under the business records exception.
As to the Rewrite Agreement, Perry ratified it by making some payments in the lesser amount as set forth in that agreement. The Rewrite Agreement also keeps the terms of the contract in force, including the security interest in the car.
[Note by the Court: Because Mr. Perry is not represented by counsel, the Court allowed this surreply over the objection of Chase.]
Chase never sought adequate protection and thus waived the right to create a possessory lien. It is the responsibility of the possessor to seek a court order to keep the car — it is not the responsibility of the debtor to pursue the possessor. Chase only had a bogus electronic title — Perry had the paper title to the car.
Since the violation of the stay was willful, Perry is entitled to sanctions. Once Chase had knowledge of the bankruptcy, it was deemed to also have knowledge of the automatic stay. But Perry must prove by clear and convincing evidence that Chase violated the stay.
Chase held onto the car because it did not really have a lien and if it had turned it over, it would have lost that lien. Chase made the Bankruptcy Court assume that it had a lien when it didn't. Chase should have asked the Court for adequate protection and the reason that it didn't was because it didn't have a lien. [Note by the Court: Mr. Perry then starts discussing the Trustee's right to sell property under § 363, which is not relevant to this situation.]
The automatic stay prohibits the creditor from retaining possession of repossessed property. And § 542(a) applies to repossessed property as well as other property in the hands of a creditor.
A motion for summary judgment is governed by Fed. R. Civ. P. 56 (incorporated in Fed. R. Bankr. P. 7056). Summary judgment is proper when the pleadings, discovery, and affidavits show that there is "no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those which may affect the outcome of the proceedings. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party moving for summary judgment bears the burden of identifying
The moving party can carry its initial burden by showing that the opposing party lacks sufficient evidence on an essential element so that the movant would prevail at trial. Fed. R. Civ. P. 56(c)(1)(B). Once the moving party has borne this, it is up to the opposing party to demonstrate that a genuine dispute exists as to a material fact. The facts must be viewed in the light most favorable to the party opposing the motion. Anderson, 477 U.S. at 249, 106 S.Ct. 2505; Masson v. New Yorker Magazine, 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991). However, mere allegations or denials do not defeat a moving party's allegations. See Gasaway v. Northwestern Mut. Life Ins. Co., 26 F.3d 957, 960 (9th Cir.1994).
Also the opposing party may not raise grounds that are not in issue under the pleadings. Wasco Prods, Inc. v. Southwall Techs, Inc., 435 F.3d 989, 991 (9th Cir. 2006).
Perry has argued repeatedly that Chase does not have an enforceable lien in the Vehicle, and thus the Court's relief from stay was based on Chase's "bogus" title to the Vehicle. In particular, Perry argues that Chase sent him the paper certificate of title, and thereby lost its title to the Vehicle. Chase argues that the paper title certificate merely released Chase Auto's ownership interest in the Vehicle. (Perry has submitted a copy of this paper title to the Court, but has not shown that he holds the original. What appears to be the back of this paper certificate of title does not have Chase, as the new lienholder, noted.) Thus, Perry argues this Court should reconsider the merits of the relief from stay order. While Perry is correct that Chase would not have been entitled to relief from the automatic stay if it did not have a valid lien on the Vehicle [see, e.g., In re Ducommun, 159 B.R. 919 (Bankr.D.Idaho 1993)], his argument fails for a number of reasons.
Perry never raised the argument in opposition to Chase's motion for relief from stay. [BK dkt. 14, 19.] (He did cite the DMV Account View print out from February 13, 2009, but used it to argue that Chase had violated the stay by ordering paper title.) By failing to raise this title argument at the time the relief from stay was litigated, Perry lost his opportunity to do so.
Even if Perry had made this argument in opposition to Chase's relief from stay motion, he would have lost. Chase undeniably had a lien on the Vehicle: Perry had granted a lien on the Vehicle to Chase under the Contract. That lien was enforceable against Perry irrespective of perfection.
Simon v. Chrysler Credit Corp. (In re Babaeian Transp. Co.), 206 B.R. 536, 540 (Bankr.C.D. Cal.1997).
The title certificate and "Electronic Title Request" affect perfection of Chase's lien in the Vehicle. California law provides that a security interest in a vehicle is perfected by deposit (either physically or electronically) of certificate of title endorsed to show the secured party as legal owner of the vehicle. Cal. Veh. Code § 6300, § 6301.
It is not clear from the record before this Court whether Chase perfected its
However, the issue of perfection is ultimately irrelevant. Had it not been perfected prior to bankruptcy, then Chase's lien could have been avoided by the Trustee pursuant to § 544(a). Babaeian Transp., 206 B.R. at 540 ("the trustee enjoys the status of a lien creditor, and thus his interest has priority over an unperfected security interest"). But the Trustee did not seek avoidance of Chase's lien under § 544(a). And this avoidance power is exercisable only by the Trustee, not by Perry. See Houston v. Eiler (In re Cohen), 305 B.R. 886 (9th Cir. BAP 2004); In re Britt, 385 B.R. 800, 2007 WL 4867921, at *7 (Table) (9th Cir. BAP 2007). In any event, the § 546(a) limitations period for bringing an avoidance action expired two years after the petition date.
In sum, all that is necessary for this Court to conclude that Chase had a valid lien in the Vehicle is the Contract itself. That Contract granted Chase a security interest in the Vehicle enforceable against Perry. If Chase had failed to perfect that security interest, then the Trustee could have sought to avoid the lien, but the Trustee did not do so (and Perry cannot do so). In the absence of avoidance, any lack of perfection is irrelevant and the lien remained enforceable as to Perry.
Perry has repeatedly asked the Court to reconsider the merits of its order granting Chase relief from the automatic stay to sell the Vehicle. It is not clear how the Court could even reconsider a six-year-old order or what would be the effect, if any, of overturning a stay relief order years after the relevant collateral has been sold. In any event, it should be noted that overturning the Court's order granting Chase relief from the automatic stay would not help Perry. Perry's failure to redeem the Vehicle 30 days after the first § 341(a) meeting (which was on March 16, 2009), resulted in the automatic stay terminating with respect to the Vehicle on or about April 15, 2009 — pursuant to § 362(h) and § 521(a)(2). Section 521(a)(2) provides that:
11 U.S.C. § 521(a)(2). Section 362(h) provides that the failure to either (i) file a timely notice of intention or (ii) timely take the action specified in that notice of intention results in the stay terminating with respect to such property. Perry filed a timely notice of intention to redeem the Vehicle — it was filed with his petition. But he failed to redeem the Vehicle within 30 days after the first scheduled § 341(a) meeting (on March 16, 2009): when Perry did not redeem the Vehicle by April 15, 2009, the automatic stay terminated under § 521(a)(2)(B) and § 362(h). The Vehicle was sold on April 30, 2009, so, whether Chase was relieved of the stay due to the granting of its motion for relief from the stay or whether the stay terminated due to Perry's failure to timely redeem the Vehicle, no stay existed at the time of sale. The issue that remains is whether Chase's ongoing possession of the Vehicle after the petition was filed was a violation of the stay.
Section 362(a)(3) bars any "act ... to exercise control over the property of the estate," as a violation of the automatic stay. 11 U.S.C. § 362(a)(3). The Ninth Circuit has held that knowing retention of estate property does violate § 362(a)(3):
California Emp. Dev. Dept. v. Taxel (In re Del Mission Ltd.), 98 F.3d 1147, 1151 (9th Cir.1996). However, direct control over estate property is a prerequisite to a finding that § 362(a)(3) has been violated. Chugach Timber Corp. v. N. Stevedoring & Handling Corp. (In re Chugach Forest Products, Inc.), 23 F.3d 241, 244 (9th Cir. 1994).
In the case of Farnsworth v. Castro (In re Castro), 2009 WL 7809012 (9th Cir. BAP 2009), the creditor repossessed two cars owned by the debtors. The day before the cars were to be auctioned, the debtors filed a voluntary chapter 7 petition. The creditor was made aware of the bankruptcy on the date of the petition filing. Thereafter, less than one week after the petition filing, debtors' counsel demanded return of the vehicles and debtors filed their Schedules B and C. Creditor failed to return the vehicles to the debtors and debtors then filed an adversary proceeding against the creditor. The bankruptcy court ultimately ruled that creditor's failure to return the vehicles to the debtors within a reasonable time after the petition date constituted a willful violation of the stay. Creditor appealed the bankruptcy court's decision. On appeal, the 9th Circuit Bankruptcy Appellate Panel stated:
Castro, 2009 WL 7809012, at *4.
While it is clear in Castro that the creditor had a duty to turn over the cars to the debtors, it is worthy to note that the Bankruptcy Appellate Panel included a "reasonable" element to the analysis, i.e., that the creditor must return the property to the debtor within a reasonable time after notice of the bankruptcy filing. Id. at *5-6.
What constitutes a reasonable period of time for turnover of estate property? There is no bright line rule which defines a reasonable period of time. Based upon a review of case law, it appears a reasonable length of time depends upon the facts of the case. Gouveia v. IRS (In re Quality Health Care), 215 B.R. 543, 555 (Bankr. N.D.Ind.1997)(The "reasonable period of time" is unique to each case and must be determined on a case-by-case basis.)
In Castro, the bankruptcy court established the date for a reasonable time to return the vehicles as the date the Castros claimed an exemption in the vehicles.
Here, it is undisputed that Key repossessed the car on February 6, 2009. On February 11, 2009, Perry filed his chapter 7 bankruptcy case. Chase was listed on the creditor matrix and was given notice of the bankruptcy through the Bankruptcy Noticing Center. Perry also sent a notice of bankruptcy directly to Chase on February 12, 2009. No later than February 13, 2009, Chase became aware of the bankruptcy. But Chase failed to return the car. Chase waited until March 10, 2009, close to thirty days from receipt of the notice of the bankruptcy filing, before it filed a motion for relief from the automatic stay.
The Court finds that it is at least probable that Chase violated the automatic stay under § 362(a)(3). Chase had notice of the Perry bankruptcy no more than 48 hours after the petition filing; Chase had possession of the vehicle; and Chase never returned the car. Instead of promptly filing a motion for relief from the automatic stay upon notice of the bankruptcy filing, Chase dragged its feet — all the while still retaining full custody of the car. Moreover, Chase did not file its motion for
The record before the Court only demonstrates that Chase may have had communication delays between its various departments in seeking proof of title and copies of documents. There is no indication that Chase believed that Perry would be a flight risk once he obtained the car or that he would conceal it. There were only two payments in arrears. This was not a new car, had low value, and a relatively small amount was owed. Perry was a long-term customer as he had been in dealing with Chase for at least five years and apparently more. There is no indication that Chase was following advice of counsel as to delaying the turnover of the car.
There were no discussions with the Debtor of possible adequate protection. Once the motion was prepared, there was no request for a hearing on shortened notice. The motion calendar held on April 9 was the first one at which the motion for relief from stay could be set on regular motion, but there were several calendar dates available in the interim for hearing on shortened notice and Chase did not seek to shorten notice.
Section 522(l) provides the mechanism for claiming an exemption:
11 U.S.C. § 522(l). The Bankruptcy Rules further provide that: "A debtor shall list the property claimed as exempt under § 522 of the Code on the schedule of assets required to be filed by Rule 1007." Fed. R. Bankr. P. 4003(a). Perry failed to list the Vehicle on Schedule C. Thus, he never formally claimed an exemption in the Vehicle.
However, Perry did file a statement of intent (Official Bankruptcy Form 8) indicating his intent to redeem the Vehicle and stating the Vehicle "is claimed as exempt." This statement of Intent was filed with Perry's chapter 7 petition, schedules, and statement of financial affairs.
A claim of exemption must enable trustees and creditors "to determine precisely whether a listed asset is validly exempt simply by reading a debtor's schedules." Seror v. Kahan (In re Kahan), 28 F.3d 79, 82 (9th Cir.1994); Hyman v. Plotkin (In re Hyman), 967 F.2d 1316, 1319 n. 6 (9th Cir.1992); Moldo v. Clark (In re Clark), 266 B.R. 163, 168, (9th Cir. BAP 2001); see also Schwab v. Reilly, 560 U.S. 770, 791, 130 S.Ct. 2652, 177 L.Ed.2d 234 (2010) (limiting exemptions to "those plainly expressed"); Barroso-Herrans v. Lugo-Mender (In re Barroso-Herrans), 524 F.3d 341, 344 (1st Cir.2008)("To start, we ask how a reasonable trustee would have understood the filings under the circumstances.")
Although ambiguities must be resolved against the Debtor, in this case it would have been clear to any reasonable trustee or creditor reading the petition package that Perry was claiming an exemption of his interest in the Vehicle.
However, Perry, as a chapter 7 debtor, lacks standing to bring an action under § 542(a). Section 542(a) provides that:
11 U.S.C. § 542(a). The references to property the debtor "may exempt" or "of inconsequential value ... to the estate," are puzzling in the context of this case, where it is the chapter 7 debtor who is seeking turnover from a creditor. They do make sense in the context where § 542(a) is more typically used in chapter 7 — a chapter 7 trustee seeking turnover of non-exempt property from the debtor. See, e.g., In re Burgio, 441 B.R. 218, 220 (Bankr.W.D.N.Y.2010).
Accordingly, some courts have held that a chapter 7 debtor cannot seek turnover under § 542(a). See, e.g., Titan Real Estate Ventures v. MJCC Realty Ltd. P'ship (In re Flanagan), 415 B.R. 29, 36 (D.Conn. 2009); Caffey v. Jag Autocare (In re Caffey), 2014 WL 3888318, at *4 (Bankr. N.D.Ohio Aug. 8, 2014). Other courts have allowed chapter 7 debtors to compel turnover from creditors under § 542(a). See, e.g., In re Velichko, 473 B.R. 64, 68 (Bankr.S.D.N.Y.2012).
The Ninth Circuit Bankruptcy Appellate Panel recently held that chapter 7 debtors lack standing under § 542(a). Collect Access v. Hernandez (In re Hernandez), 483 B.R. 713, 725 (9th Cir. BAP 2012). However, the B.A.P. nonetheless did allow the chapter 7 debtors to recover damages against creditors refusing to turnover property to the debtor — as a violation of § 362(a)(3), which bars any "act ... to exercise control over the property of the estate." Hernandez, 483 B.R. at 726; see also Castro, 2009 WL 7809012, at *4-5.
Thus, until last year, the Court would have concluded that Perry had standing to bring an action against Chase for violation of § 362(a)(3). However, the
Mwangi v. Wells Fargo Bank (In re Mwangi), 764 F.3d 1168, 1170-71 (9th Cir. 2014).
Mwangi truly leaves the chapter 7 debtor's interests in assets unprotected by § 362(a)(3). If a creditor fails to turn over the debtor's property, the debtor cannot bring actions under § 362(a)(3) prior to the debtor's exemption in the assets being perfected, because such actions may only be brought by the trustee. After the exemption revests the property in the debtor, the debtor cannot bring a § 362(a)(3) action because the asset is then no longer property of the estate.
The facts and the analysis in this case are slightly different than Mwangi, although Perry still lacks standing under § 362(a)(3). Mwangi distinguished between the deposit accounts in that case, which were themselves exempt, and property such as the Vehicle, in which the debtor's "interest" in the asset was exempt under the state exemption law. In the former case, the asset revests in the debtor as soon as the 30-day period for objecting to exemptions has passed without objection; in the latter case (under Schwab v. Reilly, 560 U.S. 770, 130 S.Ct. 2652, 177 L.Ed.2d 234 (2010), and Gebhart v. Gaughan (In re Gebhart), 621 F.3d 1206 (9th Cir.2010)) the asset remains estate property until it is administered or abandoned, or the case is closed.
Thus, in this case, because the Vehicle remained in the estate and only an interest revested in Perry, the Vehicle remained protected by § 362(a)(3) even after Perry's exemption vested. However, with only an interest in the Vehicle exempted, Perry continued to lack the right to possess or control the Vehicle. See, e.g., Zavala v. Wells Fargo Bank (In re Zavala), 444 B.R. 181, 189 (Bankr.E.D.Cal.2011); see also Schwab v. Reilly, 560 U.S. 770, 792, 130 S.Ct. 2652, 177 L.Ed.2d 234 (2010)("title to the asset will remain with the estate pursuant to § 541, and the debtor will be guaranteed a payment in the dollar amount of the exemption"). It is the right to possess or control that gives the right to assert damages under § 362(a)(3). Mwangi, 764 F.3d at 1177. So Perry never obtained the right to assert damages for a violation of § 362(a)(3).
Applying Mwangi to these facts appears inequitable, to this Court at least. Mwangi involved the right to money, which will almost always be administered by the chapter 7 trustee and which is subject to an extreme risk of dissipation in the debtor's hands. On the other hand, a debtor may use a "hard" asset like a car without inevitably destroying value and such use may be integral to the debtor's continued employment.
Unlike money, a car typically remains in the chapter 7 debtor's possession and is almost never administered by the trustee:
Castro, 2009 WL 7809012, at *8. Thus, requiring a chapter 7 debtor to have a perfected exemption in a vehicle in order to assert a right to damages is inconsistent with both existing practice and the rationale of Mwangi. This requirement will simply enable creditors to delay return of vehicles — vehicles which are typically essential to the debtor — without any benefit to the estate.
Holding that the Debtor's exempt property — once revested in the Debtor — is not protected by § 362(a)(3) simply gives creditors free rein to take and seize the debtor's property, which is deeply inconsistent with bankruptcy policy and practice. Mwangi states that debtors could sue for breach of contract to recover exempt property seized by a creditor. This, of course, places the burden of action on the debtor and will cause substantial delay in return of the assets, certainly impairing the debtor's fresh start.
Nonetheless, this Court is bound by Mwangi and thus must hold that Perry lacks standing to bring an action under § 362(a)(3) against Chase for retaining the Vehicle. The Court is frustrated by this conclusion, because Chase probably violated § 362(a)(3), and did so to an individual who had been paying on this Vehicle for approximately eight years, was a long-standing customer of Chase, was only two payments behind, and had been subjected to previous accounting errors by Chase.
As noted above, Chase's delays would have created a triable issue of fact. The Court has considered encouraging Perry to appeal this ruling on the (somewhat slim) possibility that the Ninth Circuit might limit Mwangi and not apply it to this context. (Due to Perry's numerous prior appeals, which were all either dismissed or ended in a ruling against Perry, this Court has suggested to the appellate courts that Perry be declared a vexatious litigant. However, this appeal would differ as it falls under urging a change in the law.) The Court is reluctant to do so, because even if Perry were able to recover for a violation of § 362(a)(3), the actual damages awarded for such a violation are generally quite low. See, e.g., TranSouth Fin. Corp. v. Sharon (In re Sharon), 234 B.R. 676, 687 (6th Cir. BAP 1999)(attorney's fees of $2,122.50); Stephens v. Guaranteed Auto (In re Stephens), 495 B.R. 608, 615 (Bankr.N.D.Ga.2013)(actual damages of $1,559 and attorney's fees of $4,325); Mitchell v. BankIllinois, 316 B.R. 891, 904 (S.D.Tex.2004) ($8,520.97 in actual damages, including attorney's fees, plus appellate attorney fees and costs); Will v. Ford Motor Credit Corp. (In re Will), 303 B.R. 357, 369 (Bankr.N.D.Ill.2003)($524 in compensatory damages for cabs, buses and lost personal property in car, plus costs and attorney's fees); In re Cepero, 226 B.R. 595, 601 (Bankr.S.D.Ohio 1998)(actual damages of $1,832.40); In re Zaber, 223 B.R. 102 (Bankr.N.D.Tex.1998)($180 in car
Punitive damages, typically relatively modest in amount, have been awarded, but only for egregious violations. Stephens, 495 B.R. 608 ($17,890 in punitive damages where creditor sold car without seeking relief from the stay); Will, 303 B.R. 357 ($2,000 in punitive damages); Cepero, 226 B.R. at 601 ($12,000 in punitives for egregious violation — post-petition sale of vehicle despite numerous notices of bankruptcy).
Finally, in Castro the Ninth Circuit B.A.P. held that a chapter 7 debtor is not entitled to stay violation damages arising during the period prior to the exemption being perfected and the right to possess the asset revesting in the chapter 7 debtor. 2009 WL 7809012, at *9. Thus, Perry would not be entitled to any damages relating to at least the first 30 days of this case. For these reasons, even a successful appeal may not yield a monetarily meaningful recovery.
As set forth above, Perry lacks the standing to bring an action for damages for Chase's (probable) violation of § 362(a)(3) and § 542(a). Summary judgment will be granted in full to Chase.
