In Re Crown Auto Dealerships, Inc.

187 B.R. 1009, 9 Fla. L. Weekly Fed. B 180, 1995 Bankr. LEXIS 1535, 1995 WL 628061
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedAugust 16, 1995
DocketBankruptcy 93-11864-8P1
StatusPublished
Cited by10 cases

This text of 187 B.R. 1009 (In Re Crown Auto Dealerships, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Crown Auto Dealerships, Inc., 187 B.R. 1009, 9 Fla. L. Weekly Fed. B 180, 1995 Bankr. LEXIS 1535, 1995 WL 628061 (Fla. 1995).

Opinion

*1012 ORDER ON OBJECTIONS TO CLAIMS

ALEXANDER L. PASKAY, Chief Judge.

THIS IS a Chapter 11 case filed by Crown Auto Dealerships, Inc., d/b/a Crown Daihat-su, d/b/a Crown Honda, d/b/a Crown Nissan, d/b/a Crown Suzuki, d/b/a Crown Ferrarri, d/b/a Crown Jaguar, d/b/a Crown Pontiac-GMC Truck (Crown). Crown filed its Voluntary Petition for Relief under Chapter 11 on November 12, 1993, and currently is operating its business as debtor-in-possession. Crown has filed a proposed Plan of Reorganization which is awaiting confirmation.

On April 6, 1994, John Beil, Betty Moll, John Bonanno, Raymond Brosan, Brian Moran, Anna Russell, and Randy R. & Maria C. Bell (collectively referred to as Claimants) filed their initial proofs of claim. These initial claims were not filed in any specific amount, and the claims stated only that they were based on the “fraudulent sale of previously stolen car[s] as new.” Crown subsequently filed a written objection to these claims on several grounds, including the ground that the claims are facially defective since no amount is shown on the proofs of claim. Crown combined its objection with a Motion and sought to liquidate or estimate the claims filed by the Claimants. Crown’s objection was considered in due course, and this Court entered an order sustaining the objection and disallowing the claims without prejudice to the Claimants’ right to file amended claims. The initial bar date was extended to October 17,1994, and on October 13, 1994, the Claimants filed their amended proofs of claim which were assigned the following claim numbers:

Claimant Claim No. Amount of Claim compensatory/punitive
BeU 126 $18,500 $500,000
Beil 127 $10,000 $500,000
Bonanno 128 $10,500 $500,000
Brosan 129 $11,500 $500,000
Moll 130 $10,000 $500,000
Moran 131 $19,985 $500,000
Russell 145 $16,800 $500,000

The attachment to all the amended proofs of claim indicate that the claim is based on a jury award in the state court ease and is based on a claim that the Claimants purchased an automobile which was sold to them as new' when in fact the automobile in question was stolen and recovered. It should be noted at the outset that Crown’s objection to the claim of Moll has been sustained and this claim was disallowed in toto during the trial.

In this connection it should be pointed out that none of these claimants, with the exception of Mr. and Mrs. Bell, have actually had their claims tried in the state court. Mr. and Mrs. Bell’s lawsuit, styled Randy R. Bell and Maria C. Bell v. Crown Pontiac, Inc., Case No. 86-14162-16, filed in the Sixth Judicial Circuit in and for Pinellas County, Florida, has been tried twice. In the first trial, the jury returned a verdict in favor of the Bells and awarded punitive damages to the Bells in the amount of $100,000. The judgment entered on this verdict was reversed on appeal, however, on the basis that the Bells had failed to prove that they had suffered actual damages. The case was tried by a jury for the second time in 1993, and the jury in this second trial awarded the Bells $500,000 in punitive damages. This jury verdict and the judgment entered on the verdict were subsequently set aside by the trial judge, however, based on substantial evidence of juror misconduct. It is without dispute that there is currently no valid jury verdict or judgment in existence either in favor of the Bells or in favor of any of the other claimants. The only claimant who actually filed a lawsuit other than Mr. and Mrs. Bell was Ms. Russell, and Ms. Russell’s action was stayed prior to trial by virtue of the intervening Chapter 11 case.

None of the amended claims are supported by any documentation other than a narrative setting forth the basis for the claim. Crown filed a renewed objection to the allowance of the amended claims based on the contentions that (1) none of the amended claims reflect that the Claimants suffered any actual damages; (2) the claims for punitive damages are unsupported; (3) punitive damages are not allowable under the Bankruptcy Code; and, (4) even if punitive damages are allowable, this record would not sustain a claim for that type of award sought by the Claimants against Crown.

At the pretrial conference on the renewed objection, the Court announced that it would bifurcate the trial and initially try only the issue of liability and actual damages, if any, suffered by these Claimants. The Court *1013 would then consider whether the imposition of punitive damages is appropriate under nonbankruptcy law only if actual damages were established during the first phase of the trial. In the pretrial order the Court also specified that, if it finds that punitive damages are appropriate under nonbankruptcy law, it will consider (1) whether principles of equity require subordination or total disal-lowance of the punitive damages claim; (2) whether the allowance of the punitive damages claim would impair the claims of any other creditors; and (3) if so, whether such impairment applies to all creditors or only some creditors or classes of creditors.

At the duly scheduled trial, which was limited to the issue of liability vel non of Crown for compensatory damages in accordance with the Pretrial Order, the following relevant facts were established.

AMENDED CLAIM #126 OF MR. AND MRS. BELL

Mr. and Mrs. Bell purchased a 1984 Trans Am Ricardo automobile from Crown on March 25, 1984. The purchase price for the vehicle was $18,500. The Bells paid $9,000 down, which amount included a used car allowance, and financed the balance of the purchase price through a bank loan. The vehicle had 3,500 miles on the odometer at the time that the Bells purchased it on March 25, 1984. The vehicle was sold to the Bells as a “new demonstrator,” a term used by Crown. (T-75). The Bells were told that the manager or president of Crown had driven the vehicle (T-71, Lines 6 and 8), and no agent or representative of Crown ever told them that the vehicle had been stolen prior to the purchase. (T-72, Line 23). Shortly after the purchase in 1984, the Bells experienced an engine overheating problem and demanded either a new car or their money back, but Crown refused. (T-79, Line 19-23). The Bells then continued to use the vehicle until 1986. At that time, the Bells had continued mechanical problems with the vehicle, and they learned that the vehicle had not been a demonstrator, but instead had been stolen from Crown’s premises between December 17 and December 20, 1983, and was not recovered until January 22, 1984. By 1986, the vehicle had 26,000 miles on the odometer. Crown recommended certain repairs on the vehicle, which Mrs. Bell refused and again demanded either a new car or the return of their money. An employee of Crown noted on the service order that the car was “unsafe to drive.” (T-81, 83, 91).

It appears that after the Bells refused to have the car repaired they stopped using the automobile and attempted to assert a claim under the “Lemon Law” against Crown and General Motors Corporation. This claim was unsuccessful for reasons not evident from the record.

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Bluebook (online)
187 B.R. 1009, 9 Fla. L. Weekly Fed. B 180, 1995 Bankr. LEXIS 1535, 1995 WL 628061, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-crown-auto-dealerships-inc-flmb-1995.