Opinion
Bankruptcy No. 12-21402-JAD Doc. No. 51
04-12-2013
In re: STEVEN E. MILLER, Debtor, STEVEN E. MILLER, Movant, v. PNC MORTGAGE, Respondent.
Chapter 13
MEMORANDUM OPINION
The matter before the Court is the Motion to Compel Compliance with Order and For Additional Sanctions (the "Motion")filed by the Debtor Steven E. Miller. The Motion seeks to have this Court compel compliance with a monetary judgment previously issued. For the reasons expressed below, the Court declines to enforce the monetary judgment in this manner and, accordingly, will deny the Motion.
I.
The Debtor filed a Motion to Enforce the Automatic Stay and for Sanctions on October 19, 2012 asserting that Respondent PNC Mortgage ("PNC") had violated the automatic stay by attempting to collect its mortgage and sending a Notice of Intention to Foreclose Mortgage to the Debtor. (See Doc. #39). After no response to the Motion to Enforce the Automatic Stay and for Sanctions was received, this Court entered an order by default (the "Default Order") dated November 16, 2012. (See Doc. #43). The Default Order provided that PNC was to pay $2,500.00 to the Chapter 13 Trustee on behalf of the Debtor as damages for its violation of the automatic stay. (Id. at ¶3). The Default Order further required PNC to pay $2,500.00 to counsel for the Debtor. (Id. at ¶4). In addition to the monetary judgment, the Default Order provided that in the event of failure of PNC to comply with the terms of the Default Order, additional sanctions could be imposed to the extent deemed appropriate by the Court upon the filing of an Affidavit of Default. (Id. at ¶6).
On January 10, 2013, an Affidavit of Default was filed asserting that PNC had not made the payments as ordered by the Court. On January 16, 2013, the Debtor filed the subject Motion seeking to compel compliance with the Default Order and seeking additional sanctions. The sanctions requested include an additional $1,000.00 each to the Debtor and counsel for the Debtor as well as the withholding of payment to PNC by the Chapter 13 Trustee until PNC is in compliance with the Court's orders.
The Motion to Compel was originally filed on January 14, 2013 and subsequently refiled on January 16, 2013 pursuant to a Corrective Entry entered by the Clerk's Office requiring the Motion be re-filed as a two-part motion. The Motion as re-filed was identical to the motion as originally filed.
At the hearing on the Motion, the Court raised its concerns regarding the remedy being sought in light of the nature of the Default Order. Counsel for the Debtor was provided the opportunity to brief the matter but declined. Accordingly, the Court now proceeds to decide the matter.
II.
The Debtor now seeks to force PNC to pay the amounts awarded including attorneys fees in the Default Order by way of imposing sanctions. The Default Order arose pursuant to a violation of the automatic stay. Pursuant to 11 U.S.C. §362(k)(1), actual damages, including costs and attorneys fees, may be awarded to an individual injured by any willful violation of the stay. Monetary damages were awarded by default for PNC's attempts to foreclose and its direct communication with the Debtor. There was no other relief afforded beyond monetary relief. The amount of damages was not contingent or variable in any way. The Default Order is properly characterized as a monetary judgment. See e.g., Patterson v. America's Voice, Inc. (In re America's Voice, Inc.), No. 99-02704, 00-0006, 2000 WL 33529764 (Bankr. D.D.C. Oct. 4, 2000). In effect, the Debtor is now seeking to have the Court determine that PNC is in contempt and to impose sanctions for its failure to pay pursuant to the Default Order. Such a remedy does not lie.
It is long and well settled that the appropriate manner in which to collect a monetary judgment is through a writ of execution proceeding. Federal Rule of Civil Procedure 69(a), made applicable through Federal Rules of Bankruptcy Procedure 7069 and 9014, provides in relevant part:
(1) Money Judgment; Applicable Procedure. A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution - and in proceedings supplementary to and in aid of judgment or execution - must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.Fed.R.Civ.P. 69(a)(1).
Generally contempt sanctions are not allowed to be to be used as a vehicle for enforcing collection of a monetary judgment. See e.g., Sanghvi v. Ali (In re Ali), Adv. No. 10-10012, 2011 WL 1655578, at *1 (Bankr. D.D.C. Ap. 29, 2011) citing Combs v. Ryan's Coal Co., 785 F.2d 970, 980 (11th Cir. 1986), cert. denied sub nom. Simmons v. Combs, 479 U.S. 853 (1986); see also In re Estate of Bonham, 817 A.2d 192, 195-96 (D.C. 2003) (use of contempt to collect counsel fee award not permitted); Aetna Cas. & Sur. Co. v. Markarian, 114 F.3d 346, 349 (1st Cir. 1997); Shuffler v. Heritage Bank, 720 F.2d 1141, 1147-48 (9th Cir.1983); Ardex Laboratories, Inc. v. Cooperider, 319 F. Supp. 2d 507, 509 (E.D. Pa. 2004) (writ of execution, not contempt, proper course for enforcing award of attorney's fees); Rockstone Capital, LLC v. Walker-Thomas Furniture Co., Inc., (In re Smith), Adv. No. 04-10457, 2007 WL 2429450, at *1 (Bankr. D.D.C. Aug. 23, 2007 ("the court deems sanctions to be inappropriate as that would constitute the utilization of contempt sanctions to collect a monetary obligation"); Patterson v. America's Voice, Inc. (In re America's Voice, Inc.), No. 99-02704, 00-0006, 2000 WL 33529764 (Bankr. D.D.C. Oct. 4, 2000).
The language of Fed.R.Civ.P.69(a), appears to contemplate exceptions to the general rule that a writ of execution is to be used to enforce a money judgment. Specifically, the rule provides that a writ of execution is to be used "unless the court directs otherwise." However, this clause is read narrowly. See Combs v. Ryan's Coal Co., Inc., 785 F.2d at 980. Means to collect a monetary judgment other than by writ of execution are "confined only to cases in which established principles warrant equitable relief, such as when execution would be an inadequate remedy." 13 MOORE'S FEDERAL PRACTICE, §69.02 (Matthew Bender 3d Ed.). See e.g., Laborers' Pension Fund v. Dirty Work Unlimited, Inc., 919 F.2d 491 (7th Cir. 1990)(applying Illinois law in finding contempt an appropriate means of enforcing turnover order). In the instant case, execution is not only an adequate remedy, but in fact is the specifically prescribed remedy since the Default Order is a monetary judgment.
Enforcement of a money judgment through imposition of sanctions is not authorized absent exceptional circumstances. 13 MOORE'S FEDERAL PRACTICE, §69.02 (Matthew Bender 3d Ed.). The Debtor has presented no exceptional circumstances that would warrant collection of the monetary judgment awarded in the Default Order through the imposition of sanctions. At the hearing on the Motion, the Debtor's only contention as to why a writ of execution was not the appropriate way to proceed was that a part of the Default Order provided for payment to be made to the estate. The nature of the payee of the monetary judgment does not create an exceptional circumstance that would warrant sanctions.
Federal Rules of Bankruptcy Procedure 7069 and 9014 dictate that the enforcement and collection of the Default Order obtained by the Debtor against PNC Mortgage is by way of execution on the judgment. While the Court in no way condones the action - or inaction - of PNC, it nevertheless finds that the Debtor's attempts to compel compliance with payment through sanctions (such as preventing PNC from receiving plan payments and additional counsel fees) are not warranted.
III.
As a final matter, the Court notes that it raised the issue of service of process on PNC at the hearing on the Motion. The issue of service continues to concern the Court; however, it need not be addressed today in light of the denial of the Motion. Since the hearing on this Motion, the Court observes that a proof of claim was filed on behalf of PNC Bank, National Association on March 7, 2013 regarding the mortgage that was the basis of the Motion to Enforce the Automatic Stay. (See Claim No. 6). Accordingly, the Court shall direct the Clerk to serve a copy of this Memorandum Opinion and accompanying Order of Court upon counsel for PNC Bank, National Association who filed the proof of claim.
The Court takes judicial notice of proofs of claim filed in this case pursuant to Fed.R.Evid. 201.
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Accordingly, for the reasons stated above, the Court will enter an order denying the Motion to Compel Compliance with Order and For Additional Sanctions.
_______________
JEFFERY A. DELLER
U.S. Bankruptcy Judge
case administrator to serve: Jason J. Mazzei, Esq.
Ronda J. Winnecour, Esq.
Office of the U.S. Trustee
PNC Mortgage
PNC Bank, National Association
c/o Vitti & Vitti Associates, P.C.
215 Fourth Avenue
Pittsburgh PA 15222
IN RE: STEVEN E. MILLER, Debtor,
STEVEN E. MILLER, Movant,
v.
PNC MORTGAGE, Respondent.
Bankruptcy No. 12-21402-JAD
Chapter 13
Doc. No. 51
ORDER OF COURT
AND NOW, this 12th day of April, 2013, for the reasons expressed in the Memorandum Opinion issued herewith, the Court ORDERS, ADJUDGES and DECREES
that the Motion to Compel Compliance with Order and For Additional Sanctions filed by the Debtor Steven E. Miller is hereby DENIED.
_______________
JEFFERY A. DELLER
U.S. Bankruptcy Judge
case administrator to serve: Jason J. Mazzei, Esq.
Ronda J. Winnecour, Esq.
Office of the U.S. Trustee
PNC Mortgage
PNC Bank, National Association
c/o Vitti & Vitti Associates, P.C.
215 Fourth Avenue
Pittsburgh PA 15222