In re Kim

554 B.R. 304, 2016 Bankr. LEXIS 2948, 2016 WL 4262404
CourtUnited States Bankruptcy Court, D. Massachusetts
DecidedAugust 11, 2016
DocketCase No. 14-14747-FJB
StatusPublished
Cited by1 cases

This text of 554 B.R. 304 (In re Kim) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Kim, 554 B.R. 304, 2016 Bankr. LEXIS 2948, 2016 WL 4262404 (Mass. 2016).

Opinion

MEMORANDUM OF DECISION

Frank J. Bailey, United States Bankruptcy Judge

I. Overview

There are three matters before the Court: (1) A motion filed by the -chapter 7 debtor, Sarah S. Kim (the “Debtor) to report contempt for creditor Lloyd Rosen-thal’s (the “Creditor”) violation of the automatic stay and for sanctions [Docket # 49], (2) the Court’s Order to Show Cause why the Debtor should not be sanctioned under Fed. R. Bankr.P. 9011 for making misrepresentations to the Court for the purpose of delaying these proceedings [Docket # 110], and (3) a motion by the Creditor to dismiss and for sanctions [Docket # 117]. After an evidentiary hearing, the Court now makes the following findings and rulings, and on the basis thereof, concludes that the Creditor violated the automatic stay, causing actual damages to the Debtor in the amount of $990. However, this Court having previously ordered the Debt- or to pay $990 to the Creditor and this obligation remaining unsatisfied, the Court will release both parties of all outstanding obligations to each other arising out of this Court’s orders.

II. Facts and Procedural History

The Debtor is an attorney admitted to the Massachusetts bar.1 The Debtor is the former owner of a condominium unit located at 166 Cottage Street, # 701, Chelsea, Massachusetts (the “Unit”).

The Debtor lost ownership of the Unit through a condominium lien foreclosure action. In March 2012, the Creditor purchased the Unit at a public auction. After purchasing the Unit, the Creditor, in an [306]*306attempt to turn a quick profit, contacted the Debtor and asked if she wished to repurchase the Unit. The Debtor, who has vehemently contested the legitimacy of what she has called a “sham foreclosure,” both declined to repurchase and refused to vacate the Unit. In October 2012, the Debtor was served with a notice to vacate.

In November 2012, the Creditor brought a summary process action in Chelsea District Court. The Debtor, representing herself in the summary process action, moved to dismiss the action, but that motion having been denied, answered and counterclaimed. After a trial, judgment entered in favor of the Creditor for possession and on the counterclaim. The Debtor filed an appeal from the judgment, and the Appellate Division of the District Court affirmed the judgment in September 2014. Subsequently, the Chelsea District Court issued an execution for possession of the Unit (the “Execution for Possession”). A levy on the Execution for Possession was scheduled for October 8, 2014. The Debt- or filed multiple requests for stays, both to the Chelsea District Court and to the Massachusetts Supreme Judicial Court, all of which were denied.

On October 8, 2014, the Debtor filed a petition for relief under chapter 13 of the Bankruptcy Code, commencing the present bankruptcy case. On the Debtor’s suggestion of bankruptcy, the constable who had been appointed to effectuate the levy on the Execution for Possession canceled the levy.

On October 15, 2014, the Creditor, represented by Attorney Jeffrey Turk (“Attorney Turk”), filed with this Court an expedited motion requesting an order “affirming] that no automatic stay exists as to the eviction of the Debtor” from the Unit on the basis that such eviction was subject to an exception from the automatic stay under 11 U.S.C. § 362(b)(22). In the alternative, the Creditor sought, through his motion, an order granting relief from the automatic stay to allow the Creditor to exercise his state law rights as to the Unit, including evicting the Debtor. The motion did not include an explicit request for relief from the fourteen day stay of any order granting relief from the automatic stay imposed by Fed. R. Bankr.P. 4001(a)(3). The Court granted expedited treatment and held a hearing on the Creditor’s motion on October 21,2014.

At the October 21, 2014 hearing, the Court rejected the Creditor’s argument that the automatic stay was not in effect as to the potential eviction under 11 U.S.C. § 362(b)(22). However, the Court found cause to allow the Creditor relief from the automatic stay and orally granted the Creditor relief to proceed with his state law remedies as to the Unit. Speaking to the Debtor, the Court stated:

There is no bankruptcy purpose in my continuing the stay on a case where the foreclosure has already occurred. And where you have made the decision to litigate with them in the state court, then that’s where you ought to be. All right?
The motion is allowed. I’ll allow relief from stay to proceed with the state court remedies and I can tell that you’ll know how to make yourself known in that venue very well. Allowed.2

The Court made no oral finding as to the fourteen day stay of its order imposed by Fed. R. Bankr.P. 4001(a)(3). Following the hearing, the Court issued a written order which was not entered on the Court’s docket until October 23, 2014, two days after the hearing. In the written order, the Court found cause for relief [307]*307from the automatic stay under 11 U.S.C. § 362(d)(1) and allowed the Creditor’s motion. The written order provided that, “[t]his order shall be effective immediately upon entry; the stay in Rule 4001(a)(3) shall not apply to this order.”

On October 21, 2014, after the hearing on the Creditor’s motion for relief from the automatic stay but prior to the entry of the Court’s written order on the docket, Attorney Turk sent the Execution for Possession to a constable and asked the constable to schedule a levy. Attorney Turk took this action within the scope of his representation of the Creditor. Later that day, the constable provided the Debtor with a 48 hour notice of a pending eviction.

On October 22, 2014, the Debtor filed motions with the Chelsea District Court to vacate or void the earlier judgment, to stay the Execution for Possession, to “recall” or “quash” the Execution for Possession, and to disqualify Attorney Turk. All of the Debtor’s motions were denied by the Chelsea District Court.

Several events occurred on October 23, 2014. At 3:01 P.M., the Debtor filed an emergency motion with this Court to stay the levy on the Execution for Possession while the Debtor sought an emergency review of the summary process judgment from the Massachusetts Land Court. At 3:31 P.M., the Court denied the Debtor’s request on the grounds that: (1) the request should have been addressed to either the court that issued the Execution for Possession or the court in which the appeal was pending, (2) under the Rooker-Feld-man doctrine, a federal court may not sit in appellate review of a state court judgment, and (3) even if this Court could have entertained the motion, it did not address the requirements for issuance of a stay pending appeal and had not been served on the opposing party.

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554 B.R. 304, 2016 Bankr. LEXIS 2948, 2016 WL 4262404, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kim-mab-2016.