Allen v. Philadelphia Electric Co. (In Re Allen)

69 B.R. 867, 16 Collier Bankr. Cas. 2d 527, 1987 Bankr. LEXIS 139
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedFebruary 10, 1987
Docket19-10779
StatusPublished
Cited by10 cases

This text of 69 B.R. 867 (Allen v. Philadelphia Electric Co. (In Re Allen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Philadelphia Electric Co. (In Re Allen), 69 B.R. 867, 16 Collier Bankr. Cas. 2d 527, 1987 Bankr. LEXIS 139 (Pa. 1987).

Opinion

OPINION

DAVID A. SCHOLL, Bankruptcy Judge.

This adversarial proceeding, arising in a factual setting containing several unique aspects, presents, at its core, a rather straightforward issue of the inter-relationship between two (2) Code sections, 11 U.S.C. § 348, pertaining to the effect of the conversion of a case from one chapter to another, and 11 U.S.C. § 366, pertaining to the rights and obligations of Debtors seeking to retain utility service after filing bankruptcy. We hold that the phrase “after the date of the order for relief” in 11 U.S.C. § 366(b), pertinent to when adequate assurance of payments may be required to retain service, refers to the date that a bankruptcy petition is originally filed, and not to the date of conversion if the case is ultimately converted. This being so, the articulated policy of the utility company here to request a new, full additional assurance of payment from a customer at the time of conversion without court sanction is contrary to 11 U.S.C. § 366(b), and cannot be permitted to be applied to any debtor, including the Debtor here. Therefore, we must grant the Debtor her requested relief declaring that the Defendant cannot demand a second measure of adequate assurance of payment to retain service upon the conversion of her bankruptcy case from a proceeding under Chapter 13 of Title 11, U.S.Code, to one under Chapter 7, and order the utility company to continue to provide service to her without requiring the Debtor to make such a payment.

The Debtor, identifying herself as “Emma Allen, Social Security No. 191-38-0236, 1517 Noblet Avenue, Sharon Hill, Delaware County, PA 19079,” commenced this bankruptcy case under Chapter 13 of title 11, U.S.Code, on December 9, 1985.

On April 24, 1986, the Standing Chapter 13 Trustee, James J. O’Connell, Esquire, filed a Motion to Dismiss the case on the grounds that the Debtor had failed to appear at the meeting required by 11 U.S.C. § 341, scheduled to be held the previous day, and because she had failed to make payments per her Plan. On May 20, 1986, this Motion was granted, and her case was dismissed by Order of our precedessor, the Honorable William A. King, Jr.

On July 17, 1986, a Motion to vacate the dismissal Order and reinstate the case was filed and, on August 12, 1986, this Motion was granted by Order of Chief Judge Emil F. Goldhaber, stating that “the Order of May 20, 1986, dismissing the ... matter is hereby vacated.”

On September 24, 1986, the Debtor filed a Praecipe to convert this case from a proceeding pursuant to Chapter 13 to one pursuant to Chapter 7. Per 11 U.S.C. § 1307(a), which provides that a debtor has a non-waivable right to effect such a conversion at any time, this Court, on September 25, 1986, ordered the matter converted. *869 Ultimately, Defendant LEO F. DOYLE, ESQUIRE, who has not appeared in the proceeding, was named as Interim Trustee.

On November 14, 1986, the Debtor initiated this adversarial proceeding, filing, at the same time, a Motion for an expedited hearing and a request, in the nature of a temporary restraining order, directing that Defendant, PHILADELPHIA ELECTRIC CO. (hereinafter referred to as “PECO”), refrain from terminating her electric and gas service until a hearing could be scheduled in the proceeding. Upon the representation by the Debtor’s counsel that such an Order was unopposed on an interim basis, we entered an Order on November 14, 1986, granting this relief and scheduling a hearing on the matter on November 25, 1986.

On this latter date, a hearing was indeed conducted. On November 26, 1986, we entered an Order, revised to correct erroneous wording in one paragraph on December 1, 1986, which allowed PECO to supplement the record by adding thereto a copy of the Debtor’s Application for a Low Assistance Home Energy Assistance Payment (hereinafter referred to as “LIHEAP”) “crisis assistance” payment, and requesting the parties to file Briefs on or before December 19, 1986 (the Debtor), and January 9, 1987 (PECO).

Because testimony was adduced on November 25, 1986, from James T. Wyatt, PECO’s Credit Supervisor, and Michael Donahue, Esquire, co-counsel for the Debt- or, and several factual findings are pertinent to the disposition of the case, we are rendering our Opinion in the form of Findings of Fact, Conclusions of Law, and Discussion, per Bankruptcy Rule 7052 and Federal Rule of Civil Procedure 52(a).

FINDINGS OF FACT

1.On March 7, 1985, PECO opened an account in the name of “Emalue Allen, 1517 Noblet Avenue, Sharon Hill, PA 19079.” 1

2. As of the date that the Debtor filed her bankruptcy case, on December 9, 1985, PECO’s records revealed that “Emalue Allen” had a delinquency balance of $1,552.69.

3. On December 10, 1985, Mr. Donahue directed a letter to PECO’s Chester office on behalf of the Debtor, enclosing a timestamped copy of the first page of the bankruptcy petition, setting forth the Debtor’s name and address and requesting that PECO make no further attempts to collect pre-petition debts; that service be restored if it had been terminated; and that Ms. Allen be billed for all future usage.

4. The Debtor was receiving electric and gas service from PECO at the time of receipt of the letter.

5. Upon receipt of other letters similar to the foregoing relating to other bankruptcy debtors, the policy of PECO is to “final out” the old account, open a new account with a new number, and advise the customer-debtor of the sum required to constitute adequate assurance of payment, per 11 U.S.C. § 366(b), which is usually one-sixth the average annual bill of the customer-Debtor (approximately two (2) months’ annualized usage).

6. In this instance, because PECO had no account in the name of “Emma Allen,” although it did have an account in the name of “Emalue Allen” at the same address, it took no action.

7. There was no communication from PECO to either the Debtor or her counsel indicating that no “Emma Allen” account had been located, nor was there any inquiry from the Debtor or her counsel as to whether “Emma Allen” and “Emalue Allen,” residing at the same address, were *870 the same person, or what the relationship of any such two (2) persons was.

8. On the other hand, neither Mr. Donahue, nor the Debtor, who received a copy of it, followed up the letter of December 10, 1985, to determine why no sum for adequate assurance of payment has been provided to the Debtor by PECO.

9. On May 14, 1986, the Debtor’s utility service was terminated.

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Bluebook (online)
69 B.R. 867, 16 Collier Bankr. Cas. 2d 527, 1987 Bankr. LEXIS 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-philadelphia-electric-co-in-re-allen-paeb-1987.