In re Walker

190 B.R. 362, 1995 Bankr. LEXIS 1878, 1995 WL 775393
CourtUnited States Bankruptcy Court, E.D. Missouri
DecidedDecember 28, 1995
DocketBankruptcy No. 95-45572-399
StatusPublished
Cited by1 cases

This text of 190 B.R. 362 (In re Walker) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Walker, 190 B.R. 362, 1995 Bankr. LEXIS 1878, 1995 WL 775393 (Mo. 1995).

Opinion

MEMORANDUM OPINION AND ORDER

BARRY S. SCHERMER, Bankruptcy Judge.

INTRODUCTION

The issue presented is the proper amount and the status of a claim to be allowed from a commercial lease between the debtors and their landlord creditor.

[363]*363JURISDICTION

This Court has jurisdiction over the subject matter of this proceeding pursuant to 28 U.S.C. §§ 151, 157, 1334 and Local Rule 29 of the United States District Court for the Eastern District of Missouri. This is a “core proceeding” which the Court may hear and enter appropriate judgements pursuant to 28 U.S.C. § 157(b)(2)(B).

STATEMENT OF FACTS

Leroy and Lynn Walker (the “Debtors”) voluntarily filed their Chapter 13 petition on September 18, 1995. The Debtors filed a Proof of Claim on behalf of New York Carpet World (“NYCW”) on October 12, 1995. The Debtors objected to the Proof of Claim on October 18, 1995 and NYCW filed a Response to Claim Objection and Replacement Proof of Claim on November 2,1995.

Subsequently, both parties agreed that NYCW has a claim against the estate of the Debtors. The dispute is in the amount and the status of that claim. To determine these issues, this Court must examine the landlord-tenant relationship between the parties according to Missouri law.

On June 14, 1991, the Debtors, doing business as Der Meister K-9 Services, subleased commercial property in St. Louis County, Missouri from NYCW. The five (5) year sublease was to expire on June 13, 1996. Because of defaults in rent payments by the Debtors in September through December of 1992, Debtors and NYCW executed a Sublease Modification Agreement (the “Modification Agreement”) on December 31, 1995. Under the Modification Agreement, the Debtors granted NYCW a second deed of trust on certain rental property (“6811 Et-zel”) and a security interest in all the Debt- or’s business assets. See Sublease Modification Agreement, para. 9. The liens granted under paragraph 9 of the Modification were properly perfected by NYCW.

Debtors defaulted on the payments required by the Modification Agreement, and NYCW sued the Debtors in the Circuit Court of St. Louis County. The parties settled their dispute and the Debtors signed a Consent Judgement on March 22, 1994. Under the Consent Judgement, the Walkers agreed to pay NYCW $61,277.73 plus $150.89 per day for each day they remained in possession of the property. The Debtors remained on the property for forty two (42) days after the signing of the Consent Judgement. Debtors admit they are liable for $67,615.111, but object to the remainder of NYCW’s claim.

NYCWs argument is concisely presented in four parts. It argues entitlement to: 1) interest on the judgement under both the terms of the agreement and Missouri law, 2) attorneys fees and costs1 under the terms of the Consent Judgement, 3) unpaid rent from the date the Debtors vacated the premises until the date the Debtors filed their Chapter 13 petition, and 4) a secured status of $10,-158.922 of its claim based upon the valuation of the rental property in which it holds a second deed of trust.

DISCUSSION

I. Interest on Judgement

NYCW claims interest to the date Debtors filed their bankruptcy petition of $9,086.363 which represents the interest at the statutory rate of 9.00% on the $67,708.11 Consent Judgement. NYCW claims it is entitled to this interest under Missouri Revised Statute § 408.040.14 and under paragraph 8 [364]*364of the Modification Agreement. The Court agrees.

The judgement has not been satisfied by “payment, accord or sale of property” as required by Missouri law. Additionally, paragraph 8 of the Modification Agreement expressly provides for “interest ... at the prevailing statutory rate (9%) from the date such payments were originally due under the [original] Sublease.” Accordingly, the interest component of NYCW’s claim will be allowed as submitted by NYCW in the amount of $9,086.36.

II. Attorney’s Fees and Costs

NYCW further argues that it is entitled to attorneys’ fees and costs from March 22,1994 to September 18,1995 in the amount of $8,355.50. NYCW states that the Consent Judgement provides for the payment of attorney’s fees and costs. Again, the Court agrees.

The Consent Judgement clearly states together with costs of the proceedings to enforce this judgement.” The Court concludes that the attempts to enforce the Consent Judgement and the filing of a proof of claim are costs of enforcing the judgement. Accordingly, Debtors have until Thursday, January 11, 1996 to file their specific objections as to the reasonableness of these attorneys fees and costs5. If an objection is timely filed, a hearing may be held and a determination shall be made as to the reasonableness of such fees and costs. In the event no objection is received by that date, attorneys fees and costs in the amount of $8,355.50 shall be allowed.

III. Unpaid Rent after the Consent Judgement

The largest, disputed portion of NYCW’s claim is $74,692.04 which represents sixteen and one half months rent from the entry of the Consent Judgement to the time the Debtors .filed their Chapter 13 petition. At the November 22,1995 hearing, the Debtors claimed that the doctrine of res judicata precluded NYCW from claiming the balance of the rent due under the lease.

NYCW argued at the hearing and in its brief that under Missouri law, res judicata does not bar a landlord from filing subsequent suits for rent or from collecting unpaid rent for the time both before and after a tenant vacates property.

NYCW relies upon the ease of Hurwitz v. Kohm, 594 S.W.2d 643 (Mo.Ct.App.1980) (“Hurwitz II”) as establishing the proposition that res judicata does not bar a landlord from filing subsequent suits for rent or from collecting unpaid rent for the time both before and after a tenant vacates the property.

In Hurwitz II, a landlord also sued a tenant for the remaining obligations under a commercial lease after the entry of judgement for unpaid rent and after the tenant vacated the premises. 594 S.W.2d 643 at 644. The trial court awarded rent on the remainder of the lease, and the tenant appealed arguing that the theory of res judicata bars a plaintiffs relitigation of “an issue which was or could have been litigated in the first suit.” 594 S.W.2d 643 at 645. The court held that the availability to the lessors of suing for anticipatory breach of lease did not preclude lessors from bringing successive suits against a defaulting lessee for installments as they become due, despite the contention that res judicata prevented relit-igation of that issue. Id. The court based its holding on the fact that anticipatory repudiation (i.e.

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Bluebook (online)
190 B.R. 362, 1995 Bankr. LEXIS 1878, 1995 WL 775393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-walker-moeb-1995.