Melissa L. Langenderfer

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re:
Melissa Langenderfer,
Debtor.
) 	Case No.: 10-31741
)
) 	Chapter 7
)
)
)
) 	Hon. Mary Ann Whipple
)
MEMORANDUM OF DECISION AND ORDER
DENYING MOTION FOR SANCTIONS FOR VIOLATION OF THE AUTOMATIC STAY
This proceeding is before the court on Debtor’s Motion for Sanctions for Violation of the Automatic
Stay (“Motion”) [Doc. # 27], and creditor Darby Court Condominium Owners’ Association’s (“Creditor”)
response [Doc. # 31]. In her Motion, Debtor alleges that Creditor violated the automatic stay by attempting
to collect a discharged debt.
The court has jurisdiction over this Chapter 7 case pursuant to 28 U.S.C. § 1334(a) as a case under
Title 11. It has been referred to this court by the district court under its general order of reference. 28
U.S.C. § 157(a); General Order 2012-7 of the United States District Court for the Northern District of Ohio.
Proceedings involving violation of the automatic stay are core proceedings that the court may hear and
determine under 28 U.S.C. § 157(b)(1) and (b)(2)(A). For the reasons that follow, Debtor’s Motion will be
denied.
the record of the United States Bankruptcy Court for the Northern District of Ohio.
of this court the document set forth below. This document has been entered electronically in
The court incorporates by reference in this paragraph and adopts as the findings and orders
Dated: April 23 2012
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FACTUAL BACKGROUND
The following facts are not in dispute. Debtor Melissa Langenderfer (“Debtor”) filed a Chapter 7
petition on March 20, 2010 [Doc. # 1]. At the time of the filing, Debtor owned a condominium unit at
Darby Court Condominiums, located at 3217 Glanzman Road, Toledo, Ohio. As a condominium owner,
she was required to pay condominium association fees in the amount of $155.00 a month to Creditor. See
Creditor Exs. 2, 3. She has made no such payments since May 2010.
Included in Debtor’s bankruptcy schedules is a non-priority unsecured debt owed to Creditor in the
amount of $603.00 for unpaid prepetition condominium fees. 	Creditor has not attempted to collect this
debt. Debtor received a Chapter 7 discharge on July 14, 2010 [Doc. # 21]. She remained the legal title
holder of her condominium unit until July 12, 2011, at which time the condominium unit was sold at a
sheriff’s sale. From June 2010 until July 2011, condominium association fees accrued in the amount of
$155.00 a month, plus $25 a month in late fees. Creditor filed suit against Debtor on June 8, 2011, in the
Toledo, Ohio Municipal Court to collect the association fees and related late charges that had accrued post-
petition. A default judgment was entered in favor of Creditor.
LAW AND ANALYSIS
Debtor contends that Creditor violated the automatic stay by attempting to collect a debt that was
discharged. For the following reasons, the Court disagrees.
A statutory automatic stay arises upon the filing of a bankruptcy petition. 11 U.S.C. § 362(a). To
enforce creditor compliance with the automatic stay, the Bankruptcy Code provides that “[a]n individual
injured by any willful violation of a stay provided by this section shall recover actual damages, including
costs and attorney’s fees, and, in appropriate circumstances, may recover punitive damages.” 11 U.S.C.
§ 362(k). In order to prevail on a § 362(k) claim, a plaintiff must prove by a preponderance of the evidence
that the stay imposed under § 362 was violated, that the violation was committed willfully and that plaintiff
was injured by the violation. In re Skeen, 248 B.R. 312, 316 (Bankr. E.D. Tenn. 2000).
Initially, the court notes that under § 362(c)(2)(C), the duration of the automatic stay extends only
until the earliest of the time the case is closed, the time the case is dismissed, or, if the case is an individual
debtor’s case under Chapter 7, the time a discharge is granted or denied. 11 U.S.C. § 362(c)(2)(C). In this
case, the automatic stay terminated by operation of the statute on July 14, 2010, the date Debtor’s discharge
was entered. Creditor did not violate the automatic stay by initiating collection activity on June 8, 2011,
since the automatic stay was no longer in place.
Furthermore, Debtor’s argument that the post-petition condominium fees were discharged is without
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merit. 	According to Debtor, the condominium fees are a pre-petition debt that are dischargeable under
§ 523(a)(16). 11 U.S.C. § 523(a)(16). The Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 ("BAPCPA") amended § 523(a)(16), substantially narrowing the ability to discharge condominium
fees. In re Barr, 457 B.R. 733, 737 (Bankr. N.D. Ill. 2011). The amended version of § 523(a)(16) was
intended "to broaden the protection accorded to community associations with respect to fees or assessments
arising from the debtor's interest in a condominium. . . ." H.R. REP. NO. 109-31, at 68 (2005), reprinted
in 2005 U.S.C.C.A.N. 88, 154. 1 It provides an exception to discharge
for a fee or assessment that becomes due and payable after the order for relief to a
membership association with respect to the debtor's interest in a unit that has condominium
ownership . . . for as long as the debtor or the trustee has a legal, equitable, or possessory
ownership interest in such unit . . ., but nothing in this paragraph shall except from discharge
the debt of a debtor for membership association fee or assessment for a period arising before
entry of the order for relief in a pending or subsequent bankruptcy case.
11 U.S.C. § 523(a)(16). Thus, under the amended version of § 523(a)(16), condominium association fees
that accrue post-petition while a debtor has a legal ownership interest in a condominium unit are excepted
from discharge. The case Debtor relies upon in support of her argument, In re Lamb, 171 B.R. 52 (Bankr.
N.D. Ohio 1994), is persuasively distinguishable as a pre-BAPCPA case. 	Pre-BAPCPA, § 523(a)(16)
provided that a post-petition condominium fee or assessment was excepted from discharge only if the debtor
physically occupied the unit or rented the unit to a tenant and received payments from the tenant. 11 U.S.C.
§ 523(a)(16) (2004).
In this case, Debtor retained legal title in her condominium unit until July 12, 2011, the date of the
sheriff’s sale. Although Debtor argues in her motion that she surrendered all interests in the condominium
by abandoning or moving out of the property, she only “surrendered” her possessory interest. She continued
to have a legal ownership interest in her condominium unit until it was sold at the sheriff’s sale. Under the
amended version of the statute, post-petition condominium association fees that accrued while she still had
1As other courts have noted, in enacting this amendment and constricting the scope of the discharge of condominium
owners, Congress did not foresee the coming economic storm and the real estate foreclosure crisis, or the toll this new provision
would take on the fresh start of many individuals like Debtor. In re: Spencer, 457 B.R. 601, 612 ( E.D. Mich. 2011); Pigg v. BAC
Home Loans Servicing( In Re Pigg), 453 B.R. 728, 733-34 (Bankr. M.D. Tenn. 2011). But the court notes that homeowners are
often similarly impacted with an inability to shed obligations for the ongoing maintenance and upkeep of free standing homes that
they can no longer afford but cannot get out from under due to delays in the foreclosure process or the refusal of secured
creditors to take title. The legal non-dischargeability anchor for title holders of free standing residences is often criminal nuisance
statutes in effect in many municipalities and local jurisdictions, including Toledo, Ohio. Moreover, actions of a governmental
unit to enforce its police and regulatory power and the commencement or continuation of a criminal action or proceeding against
a debtor involving real property nuisances are excepted from the automatic stay in the first instance. 11 U.S.C. § 362(b)(1), (4).
The modern financial lesson that these laws teach is rent, don’t buy real property as a place to live.
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legal title to the property are not dischargeable. 11 U.S.C. § 523(a)(16). The fact that Debtor may have
intended to surrender the condominium unit or the fact that she actually vacated the premises does not alter
her status as the holder of legal title to the condominium unit. In re: Ames, 447 B.R. 680, 683 (Bankr. D.
Mass. 2011); see also In re Burgueno, 451 B.R. 1, 4 (Bankr. D. Az. 2011)(Chapter 11 individual debtor);
In re: Spencer, 457 B.R. 601, 611-13 ( E.D. Mich. 2011)(discussing concept of “surrender” under both state
law and bankruptcy law in context of Chapter 13 debtor). Therefore, under § 523(a)(16), the post-petition
condominium fees and assessments arising while Debtor remained the legal title owner of the unit were
excepted from her Chapter 7 discharge and Creditor was entitled after termination of the automatic stay to
collect them from Debtor.
THEREFORE, for the foregoing reasons, good cause appearing,
IT IS ORDERED that Debtor’s Motion for Sanctions for Violation of the Automatic Stay [Doc.
#27] be, and hereby is, DENIED.
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