In re Kallabat

482 B.R. 563, 2012 WL 2879341, 2012 Bankr. LEXIS 3199
CourtUnited States Bankruptcy Court, E.D. Michigan
DecidedJuly 13, 2012
DocketNo. 12-53744
StatusPublished
Cited by1 cases

This text of 482 B.R. 563 (In re Kallabat) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Kallabat, 482 B.R. 563, 2012 WL 2879341, 2012 Bankr. LEXIS 3199 (Mich. 2012).

Opinion

Opinion Granting In Part Debtor’s Motion For Willful Violation Of The Automatic Stay

PHILLIP J. SHEFFERLY, Bankruptcy Judge.

Introduction

This opinion deals with an individual debtor’s motion seeking damages for a willful violation of the automatic stay under § 362(k) of the Bankruptcy Code. For the reasons set forth in this opinion, the Court grants the motion in part and finds that there was a willful violation of the automatic stay under § 362(k).

Jurisdiction

This is a proceeding arising under title 11, over which the Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(a) and 157(a).

Facts

The following facts are not disputed.

Bill A. Kallabat is the Debtor in this Chapter 7 bankruptcy case. The Debtor is a pro se defendant in a divorce case pending in the Oakland County Circuit Court, case no. 2011-787798-DM (“Divorce Case”). The Debtor’s wife, Nagham Kal-labat (“Mrs. Kallabat”), is represented by Victor & Victor, PLLC (‘Victor”) in the Divorce Case. The Divorce Case was scheduled for trial on June 5, 2012. One day prior to the trial, the Debtor filed this Chapter 7 case. Upon filing the Chapter 7 petition, the Debtor’s bankruptcy attorney telephoned Victor’s office and left a message and a voice mail informing Victor that [567]*567the Debtor had filed this Chapter 7 case. In addition, the Debtor’s bankruptcy attorney also sent an email on June 4, 2012 with a copy of a notice issued by the Bankruptcy Court showing that the Debtor had filed the Chapter 7 bankruptcy petition. Later that day, Victor left a telephone message with the Debtor’s bankruptcy attorney acknowledging receipt of the email with a copy of the Debtor’s notice of bankruptcy case. On the evening of June 4, 2012, the Debtor’s bankruptcy attorney spoke with an attorney at Victor, who informed the Debtor’s bankruptcy attorney that despite the bankruptcy case, he intended to proceed with the trial of the Divorce Case the following day.

On June 5, 2012, the Debtor’s bankruptcy attorney traveled to the Oakland County Circuit Court at 8:30 a.m. to file with that court a copy of notice of the Debtor’s bankruptcy case. The Debtor’s bankruptcy attorney then delivered a time-stamped copy of the bankruptcy notice to the chambers of the Honorable Cheryl A. Matthews, the Oakland County Circuit Court Judge presiding over the Divorce Case. At 9:34 a.m. on June 5, 2012, the Divorce Case was called. The Debtor’s bankruptcy attorney appeared and informed Judge Matthews on the record of the Debtor’s bankruptcy filing. Victor told Judge Matthews that it wished to proceed with the Divorce Case. Judge Matthews indicated that the Divorce Case should go forward notwithstanding the Debtor’s Chapter 7 bankruptcy case. Judge Matthews acknowledged the automatic stay of § 362 of the Bankruptcy Code, but explained that, “although pursuant to 11 U.S.C. § 362(b), the — certain matters in a divorce case are stayed, certainly, I’m still able to do certain things, including divorce the parties, and I intend to do that....” (Divorce Case Tr. June 5, 2012, 7:14-18.)

Judge Matthews then inquired of Victor whether there was any joint property or any joint debts of the parties to the Divorce Case. Victor explained that the parties did not have any joint property, but they did have a joint debt. Victor informed Judge Matthews that , there was a credit card that the Debtor had fraudulently opened in Mrs. Kallabat’s name at Comerica and requested that Judge Matthews require the Debtor to pay the credit card balance of $4,000.00 because of the Debtor’s fraud. Judge Matthews asked whether Victor’s request violated the automatic stay:

THE COURT: Are you asking to attribute that to him? Does that violate the stay?
MR. VICTOR: It does not violate the stay considering the fact that the debt is either going to be the same or discharged. Thus, awarding it to him would not be prejudicial to him because, at the very worst, he’ll owe what he already owes, nothing more. Best for him is that it’s discharged. Either way, my client should bear no liability for it.

(Tr. 8:22-25 to 9:1-5.)

The Debtor requested that the trial of the Divorce Case not go forward. Judge Matthews stated that she could not divide up any joint property because of the Debt- or’s bankruptcy case, but that she would go forward with the trial of the Divorce Case.

THE COURT: Well, that’s property. I can’t split it up today. I can’t split it up.
THE COURT: I’m going to divorce you and award spousal support and child support, if any, and I can order custody. I can’t — I just can’t split a property or a debt; that’s the only thing I can’t do [568]*568because you filed for bankruptcy yesterday.

(Tr. 20:19-20; 21:1-5.)

Judge Matthews then held the trial of the Divorce Case. Mrs. Kallabat testified first. Then the Debtor testified. At the conclusion of the trial, Victor and the Debtor each made a closing argument. Victor requested that the Court dissolve the marriage, make provision for custody of the children, and order the Debtor to pay support. In addition, Victor made two other requests. First, it requested that Judge Matthews hold the Debtor responsible for the Comerica credit card debt of $4,000.00 because, Victor claimed, the credit card account was opened by the Debtor in the name of Mrs. Kallabat without her permission and was therefore fraudulent. Second, Victor requested that Judge Matthews award the marital home to Mrs. Kallabat free and clear of any interest by the Debtor.

MR. VICTOR: Then there was the issue of the credit card that my client was out of the country, for which when Mr. Kal-labat applied for, that will be part of the bankruptcy proceedings, but in the event that the debt is not discharged at the disposition of the bankruptcy proceeding, we would ask that the Court make Mr. Kallabat solely liable for that debt, being that he is the only beneficiary of the expenditures from same.
I believe that the testimony further shows that the home that is deeded and financed solely by the Plaintiff [Mrs. Kallabat] should be awarded to her free and clear. Mr. Kallabat testified that he intends to move out into an apartment anyway.

(Tr. 76:3-15.)

At the conclusion of the trial, Judge Matthews made certain findings and rendered her decision. Judge Matthews dissolved the marriage, awarded custody of the children, and awarded support to Mrs. Kallabat. Judge Matthews also noted that because of the Debtor’s Chapter 7 bankruptcy case, she could not adjudicate property interests of the parties to the Divorce Case.

THE COURT: There are certain things that I cannot decide as I already placed on the record based on the bankruptcy. So I’m going to set a review date for a time after the bankruptcy, which was filed only yesterday. And, therefore, there’s a stay, but that’s only as to property. And property would include the items in the marital home and the house.

(Tr. 91:14-19.)

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Kiley
595 B.R. 595 (D. Utah, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
482 B.R. 563, 2012 WL 2879341, 2012 Bankr. LEXIS 3199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kallabat-mieb-2012.