Colon v. Hart (In Re Colon)

114 B.R. 890, 23 Collier Bankr. Cas. 2d 1202, 1990 Bankr. LEXIS 1203, 20 Bankr. Ct. Dec. (CRR) 1036, 1990 WL 75789
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedJune 7, 1990
Docket19-11216
StatusPublished
Cited by21 cases

This text of 114 B.R. 890 (Colon v. Hart (In Re Colon)) 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
Colon v. Hart (In Re Colon), 114 B.R. 890, 23 Collier Bankr. Cas. 2d 1202, 1990 Bankr. LEXIS 1203, 20 Bankr. Ct. Dec. (CRR) 1036, 1990 WL 75789 (Pa. 1990).

Opinion

MEMORANDUM OPINION

BRUCE I. FOX, Bankruptcy Judge:

At issue before me is the scope of relief which may be afforded a debtor against governmental defendants who have been found to have “willfully” violated the bankruptcy automatic stay, 11 U.S.C. § 362(a). See generally In re Atlantic Business & Community Dev. Corp., 901 F.2d 325 (3d Cir.1990). Because the above two adversary proceedings have the same defendants, the same counsel, and similar issues, the debtors requested that they be consolidated for purposes of trial. The defendants did not oppose this consolidation. By memorandum opinion and order, reported at In re Colon, 102 B.R. 421 (Bankr.E.D.Pa.1989), I concluded that defendants Philadelphia Traffic Court and its Chief Clerk, Royal Hart, willfully violated the automatic stay as to debtor Colon by attempting to collect a prepetition traffic fine. 1 As to *892 debtor Fred Szostek, I concluded that these same defendants, along with the Commonwealth of Pennsylvania Department of Transportation and its Secretary, Howard Yerusalim, willfully violated the automatic stay by coercing the debtor into paying his prepetition traffic fine. See also In re Adams, 106 B.R. 811 (Bankr.D.N.J.1989).

In their complaints, the debtors sought injunctive and declaratory relief, damages and attorney’s fees. By earlier order, they were granted the injunctive relief they sought. Given the Supreme Court’s decision in Hoffman v. Connecticut Department of Income Maintenance, - U.S. -, 109 S.Ct. 2818, 106 L.Ed.2d 76 (1989), I requested supplemental memoranda, and then heard argument, on the question of the monetary relief that may be afforded against these various defendants. Plaintiff Szostek contends that while he is not entitled to recover compensatory damages from PennDot and Mr. Yerusalim — he believes defendants’ Eleventh Amendment immunity would prevent such relief — he is nonetheless not precluded from receiving an award of attorney’s fees from these defendants. As to defendants Philadelphia Traffic Court and Mr. Hart, debtors Colon and Szostek argue that a monetary recovery against them (along with attorney’s fees) is warranted. Among other issues, the debtors contend that these particular defendants are, respectively, a unit of a municipality and a municipal official and so are not entitled to Eleventh Amendment protection from compensatory damages. See Mt. Healthy City School District v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977) (Eleventh Amendment immunity does not extend to counties and municipal corporations).

PennDOT and Mr. Yerusalim counter by suggesting that even an award of attorney’s fees would violate their sovereign immunity and that Mr. Yerusalim also possesses official immunity from such an award. Philadelphia Traffic Court and Mr. Hart challenge the debtors’ assertion that they are municipal rather than state defendants; thus, they claim Eleventh Amendment immunity. They also assert judicial immunity, official immunity, and quasi-judicial immunity, and they argue that these various immunities preclude any order that involves payments to the debtors or their counsel.

I.

It has long been held that sovereign immunity is not a bar to the entry of in-junctive or declaratory relief, as such relief is prospective. Accord, e.g., Milliken v. Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977); Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). See also In re Will Rogers Jockey & Polo Club, Inc., 111 B.R. 948 (Bankr.N.D.Okla.1990). Recently, the Supreme Court addressed whether Eleventh Amendment immunity (or even judicial immunity) precludes an award of attorney’s fees against a defendant who has been found to violate federal law, and against whom in-junctive or declaratory relief has been entered. The Court has repeatedly concluded that attorney’s fees are in the nature of prospective relief and as such are not barred by these immunity doctrines. Missouri v. Jenkins, - U.S. -, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989); Pulliam v. Allen, 466 U.S. 522, 104 S.Ct. 1970, 80 L.Ed.2d 565 (1984); Hutto v. Finney, 437 U.S. 678, 98 S.Ct. 2565, 57 L.Ed.2d 522 (1978). Therefore, when governmental entities willfully violate the provisions of 11 U.S.C. § 362(a), attorney’s fees may be awarded by virtue of § 362(h), even though the creditor may be immune from damage awards. Accord In re Ellis, 66 B.R. 821, 822-23 n. 4 (N.D.Ill.1986); In re James, 112 B.R. 687 (Bankr.E.D.Pa.1990). See also, e.g., In re Rinehart, 76 B.R. 746 (Bankr.D.S.D.1987), aff' d, 88 B.R. 1014 (D.S.D.1988), aff'd in part, Small Business Administration v. Rinehart, 887 F.2d 165 (8th Cir.1989) (punitive damages but not attorney’s fees are barred by sovereign immunity); In re Conti, 42 B.R. 122 (Bankr.E.D.Va.1984) *893 (attorney’s fees awarded against IRS for violating automatic stay). Contra In re Woloschak Farms, 109 B.R. 736 (N.D.Ohio 1989); In re Academy Answering Service, Inc., 100 B.R. 327 (N.D.Ohio 1989). Therefore, I conclude that both debtors may obtain attorney’s fees for their successful litigation in this matter.

II.

Since the debtors make no claim for compensatory damages against PennDot or Mr. Yerusalim, I need only address the immunity claims of the Philadelphia Traffic Court and Mr. Hart, the clerk of that court. The debtors argue that Philadelphia Traffic Court is a municipal entity not entitled to assert sovereign immunity. As noted by a commentator:

Eleventh Amendment immunity does not extend, however, to municipalities, counties, and other units of local government that are not agencies, instrumentalities, or arms of the state.
It is not always easy to distinguish between state and local agencies at first glance. The courts will resolve the question by determining whether the agency is an “alter ego” of the state entitled to the protection of state immunity or a separate entity not so protected. The analysis most often turns on the fiscal independence of the agency and whether a judgment against it would be paid from state funds, on the manner in which the agency is treated under state law, and on the degree of autonomy the agency exercises with respect to the state.

1 Moore’s Federal Practice ¶ 0.60[2.-2], at 616-17 (2d ed. 1990) (footnotes omitted). Accord Greer v. Metropolitan Hosp., 235 Pa.Super.

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Bluebook (online)
114 B.R. 890, 23 Collier Bankr. Cas. 2d 1202, 1990 Bankr. LEXIS 1203, 20 Bankr. Ct. Dec. (CRR) 1036, 1990 WL 75789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colon-v-hart-in-re-colon-paeb-1990.