Kevin Thomas Watkins

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------ X
: 	Chapter 7
KEVIN THOMAS WATKINS, 	: 	Case No. 17-12918 (SMB)
:
Debtor. 	:
------------------------------------------------X
MEMORANDUM DECISION GRANTING
RELIEF FROM THE AUTOMATIC STAY
A P P E A R A N C E S:
MILLER & MAGGUILLI
Attorneys for Movant
14 Corporate Woods Boulevard
Albany, New York 12211
Lawrence P. Magguilli, Esq.
Of Counsel
KEVIN THOMAS WATKINS
Debtor Pro Se
244 Fifth Avenue, Suite 2950
New York, New York 10001
STUART M. BERNSTEIN
United States Bankruptcy Judge:
American Honda Finance Corporation (“Honda”) has moved for relief from the
automatic stay (the “Motion”) to enforce its security interest in the debtor’s 2014 Honda
Civic (the “Vehicle”). The debtor opposes the Motion, arguing in the main that it is
procedurally defective and that he does not owe Honda any money. For the reasons that
follow, the Motion is granted.
BACKGROUND
On or about August 2, 2014, the debtor entered into a Retail Installment Contract
(the “Contract”) with Plaza Motors of Brooklyn dba Plaza Honda to purchase the
Vehicle. The debtor financed $27,676.29 of the purchase price, and agreed to make
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 1 of 6

2
seventy-two payments of $432.31 each, or a total payment of $31,126.32. The latter
amount included a finance charge of $3,450.03. The loan was secured by a lien on the
Vehicle. The seller immediately assigned the Contract to Honda, and records
maintained by the New York State Department of Motor Vehicles demonstrate that
Honda perfected its lien.
The debtor made his last payment on or about August 19, 2017, and after the
debtor commenced this case on October 19, 2017, Honda moved for relief from the
automatic stay. According to the Motion, the payoff balance on the Vehicle was
$14,555.24, and the approximate replacement value of the Vehicle was $9,850.00. The
debtor’s initial schedules were consistent with Honda’s estimate of the amount of the
debt and the value of the Vehicle. According to Schedule D, the debtor owed $14,427 to
Honda, and the Vehicle was worth $9,631.00. (ECF Doc. # 10, at 24 of 56.) 1
In opposition to the Motion, the debtor first identified certain alleged procedural
irregularities. He argued that the loan papers were illegible and his account number
was blacked out, the affidavit of Reinaldo Torres, sworn to November 16, 2017, which
Honda submitted in support of the Motion, was not properly notarized, Honda failed to
submit a memorandum of law or appropriate legal authority as required by Local
Bankruptcy Rule 9013-1(a), and to the extent legal arguments were included in the
Motion, they were not signed by an attorney and violated Federal Bankruptcy Rule 9011.
(Opposition to Vacate Motion, dated Dec. 6, 2017, at ¶ 2 (ECF Doc. # 15).)
1 	The pagination “_ of _” refers to the page numbers imprinted at the top of each page by the
CM/ECF system.
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 2 of 6

3
Notwithstanding the value he listed in his schedules, he also contended that the Vehicle
was worth less than $4,000.00. (Id. at ¶ 4.)
The debtor appeared on the return date and argued further that there was no
outstanding balance due on the loan. The Court adjourned the matter to afford the
debtor the opportunity to submit evidence regarding these payments. The debtor
subsequently submitted further opposition that, among other things, argued that Honda
had miscalculated the amount due from him. He apparently maintained that the
amount Honda asserted he owed failed to account for reductions to which he was
entitled in the amount $2,200.00 based on the cancellation of the Toyota Continuous
Care and $10,619 based on the trade-in of his 2009 vehicle. 2 	In addition, he had paid
Honda a total of $15,239.16. 	In other words, he had paid or was entitled to a credit in
the aggregate amount of $28,058.16, and owed nothing. (See Further Opposition to
Vacate Motion, dated Jan. 4, 2018, at ¶¶ 18, 19 (“Further Opposition”) (ECF Doc. # 21).)
However, the debtor simultaneously filed amended schedules, (ECF Doc. #22), and
admitted in amended Schedule D that he owed Honda $14,427.00 secured by collateral
(i.e., the Vehicle) worth $4000.00. 3 (Id. at 13 of 31.) Notably, the debtor did not
dispute Honda’s contention that he had not made a payment since August 2017.
2 	The trade-in is accounted for in the Contract. The debtor received a trade-in allowance in the sum
of $10,619.66, but owed Wells Fargo that amount in connection with the trade-in. In other words, the
trade-in extinguished the debtor’s debt to Wells Fargo which was secured by the vehicle he traded-in, but
Wells Fargo rather than Honda got the benefit of the value of the trade-in.
3 	The debtor contended that he did not have accurate payment records, and Honda had denied him
access to the record of his account. (Further Opposition at ¶ 17.) However, he made his payments
electronically, (id.), and failed to explain why his own bank statements did not reflect the debits resulting
from the electronic payments. He also questioned the accrual of certain late charges and repossession
fees, but failed to show that the amounts at issue were material to the resolution of the Motion.
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 3 of 6

4
DISCUSSION
On a motion for relief from the automatic stay, the party requesting the relief has
the burden of proof on the issue of the debtor’s equity in the property, and the party
opposing relief has the burden of proof on all other issues. 11 U.S.C. §362(g). But even
when the non-movant has the ultimate burden of proof, the movant must still make a
prima facie showing that it is entitled to the relief it seeks. In re Elmira Litho, Inc., 174
B.R. 892, 902 (Bankr. S.D.N.Y. 1994).
Initially, the Court rejects the debtor’s procedural challenges. In response to
these arguments, Honda filed the Affirmation [of Lawrence P. Magguilli] in Response
to Opposition to Vacate Motion, dated Dec. 22, 2017. (ECF Doc. # 17.) The Affirmation
attached a more legible copy of the Contract (properly redacted in accordance with
Federal Bankruptcy Rule 9037), an updated statement of the debtor’s account (not
showing any payments after August 19, 2017) and a copy of the original, duly notarized
affidavit of Reinaldo Torres, dated November 16, 2017. In addition, Honda submitted a
memorandum of law. (ECF Doc. # 18) and (ECF Doc. # 17-1.)
Federal Bankruptcy Rule 1001 states that the rules “shall be construed,
administered and employed by the court and the parties to secure the just, speedy, and
inexpensive determination of every case and proceeding.” 	The procedural errors
identified by the debtor are harmless, and did not prevent the debtor from opposing the
Motion. Requiring Honda to re-serve the motion, while the debtor continues to use the
Vehicle without paying for it, is neither just, speedy, nor inexpensive. In addition, the
original and supplemental oppositions filed by the debtor did not contain either actual
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 4 of 6

5
or conformed signatures. (See ECF Doc. ## 15, 21.) Under the debtor’s theory, his
opposing papers should be stricken.
Turning to the merits, Honda has made a prima facie showing that it lacks
adequate protection, and the debtor has failed to carry his ultimate burden of
persuasion under 11 U.S.C. § 362(d)(1). A secured creditor lacks adequate protection if
the value of its collateral is declining or threatening to decline as a result of the stay.
Elmira Litho, 174 B.R. at 902. Honda demonstrated that its claim is secured by the
Vehicle, and that the debtor continues to possess and presumably use the vehicle but
has not made any payments since August 2017. I infer that the value of the Vehicle has
declined or threatens to decline in value since the filing of the petition, and without any
corresponding payments, the value of Honda’s secured claim has diminished. The
debtor has not come forward with any evidence to controvert these facts.
Honda also demonstrated that it is entitled to relief from the automatic stay
under Bankruptcy Code §362(d)(2). A secured creditor is entitled to relief from the
automatic stay under that provision if the debtor lacks equity in the property, and the
property is not necessary to an effective reorganization. Despite his apparent
contention that he has overpaid Honda (based in part on a $10,619.66 trade-in credit
that extinguished his debt to Wells Fargo and provided no benefit to Honda), the
debtor’s own amended schedules demonstrate that Honda’s claim exceeds the value of
its collateral by more than $10,000.00. Hence, the debtor lacks equity in the Vehicle.
In addition, as this is a chapter 7 case, there will be no reorganization.
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 5 of 6

6
Accordingly, the Motion is granted, and the court will sign the order submitted by
Honda with any necessary changes deemed appropriate by the court. The Court has
considered the debtor’s remaining arguments, and concludes that they lack merit.
Dated: New York, New York
January 9, 2018
/s/ Stuart M. Bernstein
STUART M. BERNSTEIN
United States Bankruptcy Judge
17-12918-smb Doc 23 Filed 01/10/18 Entered 01/10/18 07:26:01 Main Document
Pg 6 of 6