Domenico v. Hooser et al

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
TIMOTHY ALAN DOMENICO
Debtor. 	No. 7-06-12430 SL
TIMOTHY ALAN DOMENICO,
Plaintiff,
v. 	Adv. No. 07-1147 S
ALEXIS NELL HOOSER and
TRAVIS HOOSER,
Defendants.
MEMORANDUM OPINION ON ABSTENTION
This matter is before the Court on Defendant’s Motion to
Dismiss which also seeks abstention (doc 4) and Plaintiff’s
objection thereto (doc 6). 	Defendants appear through their
attorney Michael Daniels. 	Until recently, Plaintiff was self-
represented. 	He is now represented by William F. Davis & Assoc.,
P.C. (Charles Hughson).
This adversary proceeding was filed by the Debtor when he
was self-represented. 	He alleges that Defendants intentionally
and willfully violated the automatic stay by evicting him from
his home post-petition and retaining his belongings. 	He seeks
damages for the willful violation of the automatic stay, payments
for his financial losses, payments for his minor son’s personal
property losses, compensation for loss of items of a personal
nature such as pictures and videos, and compensation for all
travel and other expenses involved in his prosecution of the
adversary proceeding.
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1Plaintiff also filed an amended complaint (doc 33), after
Defendants’ answer, without court approval. 	Until or unless
Plaintiff obtains permission to amend the complaint the Court
will not consider the amended complaint. 	Fed.R.Bankr.P.
7015(a)(2).
2To be clear, the Court does not take as true (or untrue)
the content of the statements and schedules and amendments
thereto, but only considers them for what they are, i.e.,
Plaintiff’s declaration about his assets, liabilities, etc.
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For the purpose of this Memorandum Opinion, the Court takes
as true all relevant non-conclusory allegations in Plaintiff’s
Complaint 1, and takes the exhibits attached to the Complaint as
true and correct copies of the original documents. 	The Court
also takes judicial notice of the docket in this adversary
proceeding and the accompanying main bankruptcy case. 	Finally,
the Court reviewed the Debtor’s statements and schedules and
amendments thereto in the main bankruptcy case. 2
FACTS
Creditors Travis Hooser and Nell “Sue” Hooser (“Defendants”)
have a lawsuit pending against Debtor in the 12 th Judicial
District Court, Otero County, New Mexico, captioned with case
number CV-06-54. 	From Debtor’s Statement of Financial Affairs
and Schedules B and D, it appears that the lawsuit involved a
real estate contract for the purchase of a mobile home and real
estate. 	As part of a settlement, Defendant had agreed to vacate
the property by December 30, 2006. 	Sometime in December Debtor
suffered an accident and was otherwise unable to move out by
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December 30, 2006. 	Thinking that a bankruptcy stay would prevent
his eviction from the property, he had his bankruptcy attorney
file a Chapter 7 petition on December 27, 2006. 	On January 4,
2007, Otero County Sheriff’s Deputies appeared at Debtor’s
residence and evicted him and did not allow him to take any
property with him. 	Despite demand, the Defendants then refused
to release the property. 	Debtor filed a pleading in the Otero
County civil case seeking an order that would require Defendants
to retain Debtor’s personal property until either the Otero
County Court or another court could rule on the disposition of
Debtor’s property. 	(Exhibit D-1 to the adversary proceeding.)
Debtor claimed all property exempt in his amended Schedule C
(doc 32). 	Trustee objected (doc 33). 	In a Stipulated Order
Regarding Trustee’s Objection to Amended Exemptions, all property
was allowed as exempt except the bulk of a personal injury claim.
(Doc 36). 	The first meeting of creditors was concluded on June
15, 2007. 	No other creditors or parties in interest objected to
Debtor’s amended exemptions. 	Debtor received his discharge on
June 25, 2007. 	Therefore, the only asset remaining in the
bankruptcy estate is the Trustee’s portion of the personal injury
claim. 	Debtor filed this adversary proceeding on October 15,
2007.
DISCUSSION
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3The Bankruptcy Abuse Prevention and Consumer Protection Act
of 2005 recodified Section 362(h) as Section 362(k)(1).
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This adversary proceeding is one to recover compensatory and
punitive damages for violation of the automatic stay. 	The
relevant statute is 11 U.S.C. § 362(k)(1) 3, which provides in
part: “[A]n individual injured by any willful violation of a stay
provided by this section shall recover actual damages, including
costs and attorneys’ fees and, in appropriate circumstances, may
recover punitive damages.” 	A proceeding to prosecute a violation
of the automatic stay is a “core” proceeding within the meaning
of 28 U.S.C. § 157(b). 	Budget Service Co. v. Better Homes of
Virginia, Inc. (In re Better Homes of Virginia, Inc.), 804 F.2d
289, 292 (4 th Cir. 1986). 	See also MBNA America Bank, N.A. v.
Hill (In re Hill), 436 F.3d 104, 108-09 (2 nd Cir. 2006):
In this case, Hill's claim under § 362(h) of the
Bankruptcy Code is properly characterized as a “core”
bankruptcy proceeding. 	Claims that clearly invoke
substantive rights created by federal bankruptcy law
necessarily arise under Title 11 and are deemed core
proceedings. 	Banque Nationale de Paris v. Murad ( In
re Housecraft Indus. USA, Inc.), 310 F.3d 64, 70 (2d
Cir. 2002). 	So too are proceedings that, by their
nature, could arise only in the context of a bankruptcy
case. 	Wood v. Wood (In re Wood), 825 F.2d 90, 96-97
(5th Cir. 1987). 	Actions brought under 11 U.S.C. §
362(h) are therefore core proceedings because they
derive directly from the Bankruptcy Code and can be
brought only in the context of a bankruptcy case.
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4The Motion to Dismiss also seeks dismissal under
Fed.R.Civ.P. 12(b)(6) because 11 U.S.C. § 362(b)(22) excepts
Defendants’ actions from the stay. 	The Court orally denied this
part of the Motion to Dismiss at the initial pretrial conference,
citing Ward v. Edwards, 2007 WL 3046133 (N.D. Ill. 2007) and In
re Baird, 2006 WL 3922527 (Bankr. E.D. Tenn. 2006). 	The
automatic stay was not implicated in Debtor’s eviction, but was
implicated in Defendants’ retention of Debtor’s property.
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Defendant’s Motion to Dismiss also 4 asks the Court to
abstain from this adversary proceeding. 	There are two types of
abstention, mandatory and permissive. 	Both are codified at 28
U.S.C. § 1334© which provides:
(1) Except with respect to a case under chapter 15 of
title 11, nothing in this section prevents a district
court in the interest of justice, or in the interest of
comity with State courts or respect for State law, from
abstaining from hearing a particular proceeding arising
under title 11 or arising in or related to a case under
title 11.
(2) Upon timely motion of a party in a proceeding based
upon a State law claim or State law cause of action,
related to a case under title 11 but not arising under
title 11 or arising in a case under title 11, with
respect to which an action could not have been
commenced in a court of the United States absent
jurisdiction under this section, the district court
shall abstain from hearing such proceeding if an action
is commenced, and can be timely adjudicated, in a State
forum of appropriate jurisdiction.
Section 1334(c)(2) discusses mandatory abstention, where the
Court must abstain if the matter is a non-core proceeding.
Because this adversary is a core proceeding, mandatory abstention
does not apply.
Section 1334(c)(1) allows for permissive abstention from
both core and non-core proceedings when abstention serves the
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interest of justice, judicial economy, or respect for state law.
However, as a general rule federal courts rarely should abstain
from exercising the jurisdiction given them.
Abstention from the exercise of federal jurisdiction is
the exception, not the rule. 	“The doctrine of
abstention, under which a District Court may decline to
exercise or postpone the exercise of its jurisdiction,
is an extraordinary and narrow exception to the duty of
a District Court to adjudicate a controversy properly
before it. 	Abdication of the obligation to decide
cases can be justified under this doctrine only in the
exceptional circumstances where the order to the
parties to repair to the state court would clearly
serve an important countervailing interest.”
Colorado River Water Conservation Dist. v. United States, 424
U.S. 800, 813 (1976)(quoting County of Allegheny v. Frank Mashuda
Co., 360 U.S. 185, 188-89 (1959)).
The Court finds that this case does not call for permissive
abstention. 	It is based entirely on bankruptcy law and is a core
proceeding. 	No state law issues are involved. 	The Bankruptcy
Court can try the matter as easily as the state court, and,
indeed, has the case set for trial in the near future.
The Court will enter an Order denying the Motion to Dismiss.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	September 12, 2008
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Copies to:
William F. Davis
6709 Academy NE, Suite A
Albuquerque, NM 87109
Michael K Daniels
PO Box 1640
Albuquerque, NM 87103-1640
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