Domenico v. Hooser et al

1That rule provides:
(continued...)
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 AFTER TRIAL
This matter came before the Court for trial on the merits of
Plaintiff’s complaint against Defendants for an alleged willful
violation of the automatic stay. 	Although Plaintiff was
represented by an attorney in his bankruptcy, he filed this
adversary proceeding pro se. 	He later hired William Davis to
represent him in the adversary, which Mr. Davis did until
withdrawing shortly after trial. 	Defendants have always been
represented by Michael Daniels. 	This is a core proceeding.
The Court has reviewed the testimony (both direct and cross)
of the Plaintiff, considered the Plaintiff’s exhibits entered
into evidence, taken judicial notice of the files in the
Bankruptcy Court and consulted applicable authorities. 	For the
reasons set forth below, the Court finds that it should grant
Defendants’ oral Motion for Judgment on Partial Findings pursuant
to Fed.R.Civ.P. 52(c) 1 made at the conclusion of Plaintiff’s
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1(...continued)
Judgment on Partial Findings. 	If a party has been
fully heard on an issue during a nonjury trial and the
court finds against the party on that issue, the court
may enter judgment against the party on a claim or
defense that, under the controlling law, can be
maintained or defeated only with a favorable finding on
that issue. 	The court may, however, decline to render
any judgment until the close of the evidence.
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case. 	This Memorandum Opinion constitutes the Court’s findings
of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).
FACTS
1. 	On August 31, 2005, Plaintiff filed a Chapter 13
bankruptcy in the District of New Mexico, case 13-05-17053. 	The
case was dismissed on January 3, 2006.
2. 	On November 30, 2006 a state court hearing resulted in a
stipulated order divesting Plaintiff of all interest in certain
real property and ordering that he vacate the premises by
midnight on December 31, 2006. 	During the month of December
Plaintiff attempted to find, but was unable to find, anyone that
could move several mobile homes and a large quantity of personal
possessions from the property. 	Also in December, Plaintiff was
involved in a bicycle accident when he was struck by a car and
suffered serious injuries. 	Plaintiff believed that a bankruptcy
automatic stay would stop an eviction. 	Therefore, Plaintiff
filed a Chapter 7 bankruptcy on December 27, 2006. 	At trial he
testified that he filed on this date specifically to stop the
eviction.
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2Apparently, ex-parte.
3At trial, Plaintiff testified that initially he lived with
his mother in Denver. 	Some time later, however, his mother had
his brother send him a notice under Colorado law giving him three
days to vacate those premises. 	He then testified that he spent
time at a homeless shelter.
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3. 	On January 4, 2007, Plaintiff was forcefully evicted from
his mobile home by four or five Otero County Sheriff’s Deputies
pursuant to an order by the 12 th Judicial District Court. 	One of
the Deputies took Plaintiff’s only key to the mobile home and
told him that if he returned he would be arrested.
4. 	Plaintiff then attempted to visit the state court judge 2
assigned to the state case in order to undo the eviction because
of his bankruptcy filing, but a Sheriff’s Deputy refused him
access.
5. 	Plaintiff was then homeless and did not have enough money
for a hotel room, so he sold two vehicles stored at a different
location, bought a bus ticket, and left for Denver, Colorado 3.
6. 	On January 22, 2007, Plaintiff filed a Motion in the state
court case seeking an order directing the Defendants to retain
his personal property. 	There is no evidence whether this motion
was ever acted upon. 	His bankruptcy attorney told him that the
state court judge would probably not consider it because he was
in bankruptcy.
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4In an earlier order, the Court ruled that Plaintiff had no
standing to pursue stay violations on behalf of his son, who was
not protected by the automatic stay, and over which this Court
had no jurisdiction. 	Doc 17.
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7. 	No motion was filed in the second bankruptcy case within 30
days of the petition requesting a continuation of the automatic
stay.
8. 	On January 29, 2007, Plaintiff wrote a letter to Defendants
suggesting they were in violation of the automatic stay and
concluding with “This communication is a legal demand to retain
my property until the Bankruptcy Court hears arguments, makes
determinations and orders the disposition of same.”
9. 	On February 26, 2007, Miguel Garcia, attorney for
Defendants, responded to Plaintiff’s bankruptcy counsel that in
his opinion there was no automatic stay under 11 U.S.C.
§362(b)(22) because there was a pre-petition state court order 1)
terminating all Plaintiff’s interest in the property and 2)
directing Plaintiff to vacate the premises.
10. 	Debtor received a discharge on June 25, 2007.
11. 	On July 5, 2007, the Trustee filed a Notice of Abandonment
of five mobile homes and two vehicles.
12. 	On October 15, 2007, Plaintiff filed this adversary
complaint. 	He seeks damages for the claimed loss of valuable
personal possessions belonging to both him and his son 4. 	He also
seeks punitive damages for Ms. Hooser’s willful stay violations.
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The complaint contains several allegations based on hearsay
statements of Plaintiff's son and his son's mother. Neither were
called to testify. Therefore, these statements remain hearsay and
the allegations were not proved. 	In fact, the Court's impression
is that this entire case is based on hearsay. 	Plaintiff
witnessed the eviction as a participant. 	Thereafter he left for
Colorado and it appears that the entire adversary proceeding was
built on what he heard from third parties. 	Neither the pleadings
or the trial testimony indicate that he ever returned to
Alomogordo, New Mexico or dealt with the defendants directly.
13. 	In Defendant’s Second Motion to Dismiss, doc 12, they attach
a Transcript of Proceedings from the November 30, 2006 hearing in
the state court case. 	On page 2, Plaintiff states “Actually,
Your honor, I’m within days of filing [bankruptcy] and my
bankruptcy attorney convinced me not to do a Chapter 13, to do a
Chapter 7 and abandon the property.” 	On page 5, Plaintiff states
[O]ver a week ago, I offered to surrender the site-
built home, there’s two site-built homes, some trailers
and trailer spots — a trailer spot. 	And I offered to
surrender the keys to the homes -- ... over a week ago.
Um, by the end of today, the last item I have in one
house will be removed. 	So I’d say by the end of
business today, I’ll give them the keys to the houses.
And then they’ll have free access to the property.
14. 	In their answer, Defendants assert various affirmative
defenses, including waiver, laches and estoppel; proximate cause;
intervening third party (Otero County Deputies); and unclean
hands.
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5And, the Court notes that over the course of this
proceeding the claimed assets increased in both number and value.
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15. 	On March 17, 2009, Defendants filed a Notice of Delivery of
Personal Property, in which they state that they have returned
all items of personal property in their possession. 	Plaintiff
acknowledged this return by his filing a “Plaintiff/Debtor’s
Advisement to the Court of Value of Property Returned by
Defendant” on April 16, 2009, in which he places a value on the
items returned and suggests that the Court deduct $300 when
determining the dollar amount due Plaintiff from Defendants for
lost property.
15. 	Plaintiff offered no evidence that Travis Hooser had any
involvement in anything related to this case.
16. 	Plaintiff offered no evidence that anything happened to his
property between the filing of the petition and January 26, 2007.
17. 	To the date of trial, Plaintiff could not identify what
specific items of his property had been removed or dissipated.
Instead, all he presented into evidence was 7 pages of property
that he could remember he owned before the eviction 5. 	There were
no receipts or independent verifications that any of this
property was ever actually owned by Plaintiff. 	Plaintiff
provided no third party valuations of anything he claimed to have
owned. 	Despite an admonition by the state court judge to
videotape the property, see Doc 12-2, p. 6, there was no
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suggestion that this was done. 	Nothing was presented at trial
that suggested Plaintiff was qualified to place a reasonable
value on any property. 	Furthermore, as of the date of trial
Plaintiff had not even actually returned to the property to
determine what in fact was still there.
18. 	Plaintiff offered no evidence that Ms. Hooser actually
interfered with his property. 	Rather, Plaintiff is proceeding on
a theory that either because he 1) filed a motion in the state
court to direct the Hoosers to retain his property, or 2) he
filed bankruptcy, that Ms. Hooser had a strict liability to
preserve his assets, intact and indefinitely.
19. 	Plaintiff offered no evidence that the Hoosers agreed to
preserve or protect his property.
20. 	Plaintiff offered no evidence that the Hoosers were
contractually bound to preserve or protect his property.
21. 	Plaintiff offered no evidence that the Hoosers had a duty to
preserve or protect his property.
22. 	Plaintiff offered no evidence that Ms. Hooser ever called
the state court judge.
23. 	Plaintiff offered no evidence that Ms. Hooser was acting in
concert with the Sheriff’s Deputies or that she had any control
over their actions.
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24. 	Plaintiff offered no evidence that any of his property was
under the control of the Otero County Sheriff’s Department or the
Alamogordo Police Department.
25. 	Plaintiff has not proved damages with any certainty.
26. 	The Court finds that Plaintiff never had the money to
retrieve his personal property and, even if he did, he had no
place to store it. 	The Court also finds that, as a result of the
bicycle accident, Plaintiff was not in the physical shape to move
the property himself. 	In fact, the Court finds that Plaintiff
wanted Defendants to store his property, as evidenced by the
state court motion and the January 29, 2007 letter demanding that
Defendants retain his property.
CONCLUSIONS OF LAW
At the start of trial, Defendants’ attorney stated that
there was some confusion about what was to be tried. 	The
February 20, 2008 Order Resulting from First Final Pretrial
Conference, doc 17, states “the claim for relief for violation of
the automatic stay is dismissed based on §362(b)(22).” 	It also
ordered “that Defendants are subject to any §542 liability they
may have for property in the possession of the Otero County
Sheriff’s Department or the Alamogordo Police Department which
either of those two departments is holding for Defendants; this
does not apply to any property which either of those two
departments obtained or created for their own law enforcement
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6See 11 U.S.C. § 362(b)(22).
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purposes.” 	On September 12, 2008, the Court entered an Order
Denying Second Motion to Dismiss Adversary Proceeding. 	Among
other things, it states “the complaint facially states a cause of
action for violation of the automatic stay. 	See, e.g., United
People’s Federal Credit Union v. Yates (In re Yates), 332 B.R. 1,
4 (10 th Cir. B.A.P. 2005)(retention of property after bankruptcy
is an “exercise of control” in violation of the automatic stay).
To clarify, the February 20, 2008 Order dismissed all claims
relating to the eviction 6 of the Plaintiff only. 	It did not
dismiss any claims (whether under § 542 or 362) relating to
Plaintiff’s property that was left behind. 	The Yates case cited
in the Order describes the interplay of § 542 and § 362: “By
requiring a creditor to turn over property of the estate upon the
filing of a bankruptcy petition, § 542(a) prevents the continued
exercise of control over property of estate-a violation of the
automatic stay. 	Thus, § 542(a) works to avoid what § 362(a)
forbids-the retention of property of the estate after filing.”
332 B.R. at 4. 	Therefore, what was left for trial were all
claims, either relating to turnover or automatic stay violations
with respect to Plaintiff’s property.
At the close of Plaintiff’s case, Defendants moved for
Judgment under Rule 52(c) on two grounds. 	First, they argue that
Plaintiff lacks standing under § 542 to assert any claim at all,
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but even if Plaintiff had standing he failed to show his right to
relief. 	Second, they argue that the evidence shows that
Plaintiff had abandoned the property and is guilty of laches.
The Court took the motion under advisement.
The standards for a Rule 52(c) dismissal are set out
concisely in Oklahoma v. Tyson Foods, Inc., 2010 WL 653032 at * 2
(N.D. Okla. 2010):
Rule 52(c) authorizes a court to enter judgment on
an issue during a nonjury trial if a party has been
fully heard and the court finds against the party on
that issue. 	Rule 52(c) “authorizes the court to enter
judgment at any time that it can appropriately make a
dispositive finding of fact on the evidence.”
Fed.R.Civ.P. 52 Advisory Committee Notes to 1991
Amendment; Charles A. Wright & Arthur Miller, 9 Fed.
Prac. & Proc. Civ. §§ 2371, 2573.1 (3d ed. 2008). 	In
granting a motion under Rule 52(c), the court is not
limited in its evaluation of the nonmovant's case as it
would be on a motion for judgment as a matter of law.
9C Fed. Prac. & Proc. Civ. § 2573.1; Rego v. ARC Water
Treatment Co. of Penn., 181 F.3d 396, 400 (3d Cir.
1999). Rather, under Rule 52(c), the trial court may
weigh the evidence, resolve disputed issues of fact,
“and decide for itself in which party's favor the
preponderance of the evidence lies.” 9C Fed. Prac. &
Proc. Civ. § 2573.1; see also Roth v. American Hosp.
Supply Corp., 965 F.2d 862, 865 & n. 2 (10th Cir. 1992)
(applying the former Rule 41(b), the precursor to Rule
52(c)); Feldman v. Pioneer Petroleum, Inc., 813 F.2d
296, 299 & n. 4 (10th Cir.1987); Woods v. North Am.
Rockwell Corp. 480 F.2d 644, 645-46 (10th Cir. 1973);
Johnson v. Olathe Dist. Schools Unified School Dist.,
316 F.Supp.2d 960, 962 (D. Kan. 2003). In so doing, the
court is not required to consider the evidence in the
light most favorable to the plaintiff, but may weigh
the evidence to determine whether or not the plaintiff
has demonstrated a factual and legal right to relief.
See Blankenship v. Herzfeld, 661 F.2d 840, 845 (10th
Cir. 1981); Tatum v. United States, 2007 WL 756695, at
* 1 n. 1 (E.D. Okla. Mar.6, 2007).
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Debtor’s complaint seeks relief for the post-petition loss
of his personal property. 	“A pro se litigant's pleadings are to
be construed liberally and held to a less stringent standard than
formal pleadings drafted by lawyers.” 	Hall v. Bellmon, 935 F.2d
1106, 1110 (10 th Cir. 1991). 	“We believe that this rule means
that if the court can reasonably read the pleadings to state a
valid claim on which the plaintiff could prevail, it should do so
despite the plaintiff's failure to cite proper legal authority,
his confusion of various legal theories, his poor syntax and
sentence construction, or his unfamiliarity with pleading
requirements.” 	Id. 	Applying this standard, the Court finds that
the complaint states a claim.
Section 542(a) provides in part:
[A]n entity, other than a custodian, in possession,
custody, or control, during the case, of property that
the trustee may use, sell, or lease under section 363
of this title, or that the debtor may exempt under
section 522 of this title, shall deliver to the
trustee, and account for, such property or the value of
such property, unless such property is of
inconsequential value or benefit to the estate.
“A turnover action is not an action to recover damages for the
taking of estate property but an action to recover possession of
property belonging to the estate at the time of the filing. It
invokes the court's most basic equitable powers to gather and
manage property of the estate.” 	Braunstein v. McCabe, 571 F.3d
108, 122 (1 st Cir. 2009). 	However, a refusal to turn over
property is a violation of the automatic stay. 	Yates, 332 B.R.
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at 4. 	See also In re Jackson, 251 B.R. 597, 601 (Bankr. D. Utah
2000)(Section 542 provides the right to the return of estate
property, while § 362(h) [now codified as 362(k)] provides the
remedy for the failure to do so.); Mountaineer Coal Co., Inc. v.
Liberty Mutual Ins. Co. (In re Mountaineer Coal Co, Inc.), 247
B.R. 633, 642 (Bankr. W.D. Va. 2000)(“Collier on Bankruptcy
asserts that a violation of § 542 should be deemed a violation of
the automatic stay under § 363(a)(3) as being an exercise of
control over property of the estate.”); Abrams v. Southwest
Leasing and Rental Inc. (In re Abrams), 127 B.R. 239, 242-43 (9 th
Cir. BAP 1991)(Section 542 provides the right to the return of
estate property, while § 362(h) [now codified as 362(k)] provides
the remedy for the failure to do so. 	And, noting that support
for this right/remedy concept is also found in the fact that the
Code expresses no remedy for a violation of § 542.) 	Therefore,
to the extent Plaintiff seeks damages, the relief must be under
362(k). 	Section 362(k)(1) states, in part: “an 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.”
Changes to the Bankruptcy Code in 2005 have limited the
protections of the automatic stay to some extent. 	For example,
section 362(c)(3) states:
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[I]f a single or joint case is filed by or against
debtor who is an individual in a case under chapter 7,
11, or 13, and if a single or joint case of the debtor
was pending within the preceding 1-year period but was
dismissed, other than a case refiled under a chapter
other than chapter 7 after dismissal under section
707(b)--
(A) the stay under subsection (a) with respect to any
action taken with respect to a debt or property
securing such debt or with respect to any lease shall
terminate with respect to the debtor on the 30th day
after the filing of the later case;
(B) on the motion of a party in interest for
continuation of the automatic stay and upon notice and
a hearing, the court may extend the stay in particular
cases as to any or all creditors (subject to such
conditions or limitations as the court may then impose)
after notice and a hearing completed before the
expiration of the 30-day period only if the party in
interest demonstrates that the filing of the later case
is in good faith as to the creditors to be stayed[.]
This subsection applies to the Plaintiff in this case. 	His prior
Chapter 13 bankruptcy was dismissed on January 3, 2006. 	He filed
this case on December 27, 2006, which is within one year of
January 3, 2006. 	He did not file a motion to continue the stay
under section 362(c)(3)(B). 	“Section 362(c)(3)(A) is self-
executing and serves to terminate the stay ‘on the 30 th day after
the filing of the later case.’” In re Tubman, 364 B.R. 574, 579
(Bankr. D. Md. 2007)(quoting 11 U.S.C. § 362(c)(3)(A).)
Therefore, the automatic stay expired in Plaintiff’s bankruptcy
case on January 26, 2007.
A movant has the burden of proof with regard to showing that
there was a violation of the automatic stay, that the violation
was willful, that the willful violation caused the movants to
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suffer harm and incur damages, and then to show what relief is
appropriate. 	In re Dunn, 202 B.R. 530, 531 (Bankr. D. N.H.
1996).
Plaintiff did not establish that Defendant took actions in
violation of the automatic stay before January 27, 2007. 	In
fact, Plaintiff did not establish that any actions took place
before January 27, 2007. 	He therefore failed in his burden of
proof to show that there was a violation of the automatic stay.
His complaint should be dismissed.
A debtor seeking damages for a willful violation of the
automatic has the burden of proving actual damages with
reasonable certainty. 	In re Gagliardi, 290 B.R. 808, 819 (Bankr.
D. Colo. 2003)(citing Doe v. United States, 976 F.2d 1071, 1085
(7 th Cir. 1992), cert. denied, 510 U.S. 812 (1993) and Matter of
Nat’l Marine Sales & Leasing, Inc., 79 B.R. 442 (Bankr. W.D. Mo.
1987). 	See also In re Sumpter, 171 B.R. 835, 844 (Bankr. N.D.
Ill. 1994):
Actual damages for purposes of section 362(h) [now
362(k)(1)] should only be awarded if there is evidence
supporting the award of a definite amount which may not
be predicated upon mere speculation. 	Once a party has
proven that he has been damaged, he needs to show the
amount of damages with reasonable certainty. ... [A]
damage award cannot be based on mere speculation, guess
or conjecture.
(footnote omitted)(also citing Doe, 976 F.2d at 1085, In re
Alberto, 119 B.R. 985, 995 (Bankr. N.D. Ill. 1990), and Adams
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Page -15-
Apple Dist. Co. v. Papeleras Reunidas, S.A., 773 F.2d 925, 930
(7 th Cir. 1985).)
Plaintiff did not establish his damages with any reasonable
certainty. 	Furthermore, the proof at trial did not suggest that
his damages were caused by the Defendants; rather, they were
caused either by Plaintiff’s inability to move the personal
property, or by the threats made by the Sheriff’s Deputies that
caused him to not return to the property. 	The complaint should
therefore be dismissed.
Because the Court finds that Plaintiff has failed to prove
his case on the merits, the Court need not address Defendants’
other defenses. 	The Court will enter an Order granting
Defendants’ oral Motion to Dismiss made at the end of Plaintiff’s
case.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	April 14, 2010
Copies to:
Timothy Alan Domenico
PO Box 87
Englewood, CO 80151
Michael K Daniels
PO Box 1640
Albuquerque, NM 87103-1640
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