In re Stringer

586 B.R. 435
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedMay 21, 2018
DocketCase No. 17–51730
StatusPublished
Cited by1 cases

This text of 586 B.R. 435 (In re Stringer) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Stringer, 586 B.R. 435 (Ohio 2018).

Opinion

C. Kathryn Preston, United States Bankruptcy Judge

The automatic stay is one of the most fundamental protections of the Bankruptcy *438Code. It provides debtors the breathing room they need for a fresh start and it protects the interests of other creditors by preventing a single creditor from "racing to the courthouse" and obtaining payments on its claim to the detriment of other creditors. In re Printup , 264 B.R. 169, 173 (Bankr. E.D. Tenn. 2001). Rarely has the Court seen such a blatant violation of the automatic stay as is presented in this case. The conduct of Sterling A. Williams and his attorney, Percy Squire, (collectively, the "Respondents") has resulted in serious injuries to debtor Vicki M. Stringer ("Debtor"), and therefore, sanctions in the form of attorneys' fees, costs, and punitive damages will be imposed.

This matter came on for trial before the Court on April 16, 2018, pursuant to the Order Setting Pretrial Hearing and Requiring Sterling Williams and His Attorney Percy Squire to Appear and Show Cause Why They Should Not be Held in Contempt for Willful Violation of Automatic Stay and/or Discharge Injunction (Doc. # 82) ("OTSC") entered on September 29, 2017. The OTSC was issued upon the Motion to Order Sterling Williams and his Attorney Percy Squire to Appear and Show Cause Why They Should Not Be Held in Contempt for Non-Compliance of the Automatic Stay (Doc. # 57) (the "Motion"), filed by Debtor on August 25, 2017. The Motion alleged that Respondents willfully violated the automatic stay when they initiated a garnishment against Debtor in an effort to collect a judgment with full knowledge that Debtor had filed a petition for relief under Chapter 7 of the Bankruptcy Code. Present at the hearing as trial counsel were James A. Coutinho and J. Matthew Fisher, representing Debtor, and Percy Squire representing himself and Sterling A. Williams. Upon the evidence presented, the Court makes the following findings of fact and conclusions of law.

JURISDICTION

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and General Order 05-02 entered by the District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This is a core proceeding. See 28 U.S.C. § 157(b)(2)(A) & (O) ; see also Amedisys, Inc. v. Nat'l Century Fin. Enters., Inc. (In re Nat'l Century Fin. Enters., Inc.) , 423 F.3d 567, 573 (6th Cir. 2005) (a motion to enforce the automatic stay is a core proceeding). An order awarding damages under § 362(k)(1) is a final order. Wicheff v. Baumgart (In re Wicheff) , 215 B.R. 839, 843 (6th Cir. BAP 1998). The Court has constitutional authority to enter a final order in this matter because a claim under § 362(k)(1) for an automatic stay violation "derives directly from the Bankruptcy Code" and "necessarily stems from the bankruptcy itself." WD Equipment v. Cowen (In re Cowen) , 849 F.3d 943, 948 (10th Cir. 2017) (internal quotation marks omitted).

FINDINGS OF FACT

Debtor is the successful author of multiple urban fiction novels. She wrote her first novel in 1998 and became a published author with Simon & Schuster, Inc. in 2003. She has written thirteen novels, twelve of which were published by Simon & Schuster. In 2000, Debtor formed Triple Crown Publications LLC. The company was involved in the publishing of other author's works, not Debtor's. The company was dissolved in 2010.

The typical publishing agreement between Debtor and Simon & Schuster entailed the following: Simon & Schuster would purchase the literary rights to Debtor's works and would edit, publish, and market the novels. Simon & Schuster *439would also give Debtor an advance, which would be repaid by Debtor through book sales. When the book sales exceeded the amount required to repay the advance, Debtor was entitled to the residual royalties. Debtor receives royalties twice a year from Simon & Schuster, based on the previous year's sales of her books. In one of the publishing agreements, dated May 16, 2011, Triple Crown Publications (not Triple Crown Publications LLC) was given as the "proprietor" of two of Debtor's novels: "Crackhead" and "Crackhead 2."1 Triple Crown Publications LLC had no ownership interest in the novels and was not entitled to any residual royalties resulting from sales of the novels. Debtor neither transferred nor assigned her intellectual property rights with respect to the novels to Triple Crown Publications LLC.

Debtor and Mr. Williams had been involved in business dealings that evidently did not end well. Mr. Williams sued Debtor, and on October 20, 2014, the Franklin County Court of Common Pleas found Debtor and Triple Crown Publications, LLC to be jointly and severally liable to Mr. Williams for fraudulent inducement and breach of contract in the amount of $71,960.80.

On March 23, 2017, Debtor filed her petition for relief under Chapter 7 of the Bankruptcy Code, Schedules, and Statement of Financial Affairs. On Debtor's petition, she stated that she had not used any business names or employee identification numbers in the last eight years. On Schedule I, Debtor stated that she receives $400 per month in "Royalties from book sales." Debtor receives residual royalties twice a year based on the previous year's sales of her books. Debtor divided her estimated royalties over a 12 month period for purposes of filling out her Schedule I. On Schedule A/B, Debtor stated that she has "Ownership/License/Rights to royalty income" from seven books and "Agent Rights" to five books. Debtor explained that the books in which she has "Agent Rights" are the books that she wrote under a pen name. These are the twelve books that were published by Simon & Schuster. Schedule A/B also disclosed that Debtor was entitled to "Royalty Income earned but unpaid" in the amount of $3,284.45, based on 2016 sales of Debtor's novels. These royalties are at the center of the controversy between Debtor and Respondents.

There is no dispute that Respondents received notice of Debtor's bankruptcy. On Schedule E/F and on her mailing matrix filed with the Court, Debtor listed "Net Worth," which is Mr. Williams' business, as a creditor in the amount of $70,136.92. The company's correct address was listed. Mr. Squire was expressly hired by Mr. Williams for the purpose of representing Williams, a judgment creditor, during Debtor's bankruptcy proceedings. Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
586 B.R. 435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-stringer-ohsb-2018.