Opinion
C/A No. 17-00041-EG Adv. Pro. No. 22-80050-EG
2023-03-07
IN RE, Michael Joseph BROSKY and Kelly Lee Brosky, Debtor(s). Michael Joseph Brosky, Kelly Lee Brosky, Plaintiff(s), v. JP Morgan Chase Bank, N.A., Defendant(s).
Ann Urquhart Bell, Ann U. Bell, Attorney at Law, Charleston, SC, for Plaintiffs.
Ann Urquhart Bell, Ann U. Bell, Attorney at Law, Charleston, SC, for Plaintiffs.
ORDER GRANTING DEFAULT JUDGMENT AND MOTION AND REQUEST FOR DAMAGES
Elisabetta G. M. Gasparini, United States Bankruptcy Judge
THIS MATTER came before the Court for a hearing on March 2, 2023, on the Affidavit of Default and Request for Default Judgment and Motion and Request for Damages ("Motion for Damages") filed by Michael Joseph Brosky and Kelly Lee Brosky ("Plaintiffs" or "Debtors") on January 30, 2023. The hearing was attended by counsel for the Plaintiffs, Ann Urquhart Bell ("Plaintiffs’ Counsel"). No other parties, including JP Morgan Chase Bank, N.A. ("Defendant"), appeared at the hearing.
ECF Nos. 5 & 6.
FINDINGS OF FACT
On December 13, 2022, the Plaintiffs filed a complaint initiating the above adversary proceeding. In the complaint, Plaintiffs allege that the Defendant had a claim against the Debtors secured by one of their vehicles. Despite receiving notice of the Plaintiffs’ discharge and being paid the full value of its claim (plus interest) through the Debtors’ chapter 13 plan, the Defendant failed to provide the Plaintiffs the title to the vehicle as satisfied, as required by the confirmed plan. Specifically, the confirmed plan provides "secured creditors paid the full secured claim provided for by this plan shall timely satisfy any liens in the manner required by applicable law or order of this Court." Plaintiffs’ Counsel sent two letters to the Defendant requesting the satisfied title after the Debtors’ own failed attempts to no avail. At the hearing, Plaintiffs’ Counsel introduced, and the Court admitted into evidence, an exhibit showing that the Defendant received the second such letter on November 23, 2022. The complaint asserts the Defendant's actions constitute a violation of the discharge injunction pursuant to 11 U.S.C. § 524.
C/A No. 17-00041-EG, ECF No. 67.
On December 14, 2022, a summons was issued on the Defendant, providing a deadline to respond to the complaint of January 13, 2023. On December 20, 2022, the Plaintiffs filed a Certificate of Service attesting to serving the Defendant by mailing the summons and complaint to Jamie Dimon, Chief Executive Officer, c/o JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, NY 10172 ("Park Avenue Address") by certified mail, return receipt requested, on December 20, 2022. At the hearing, Plaintiffs’ Counsel introduced, and the Court admitted into evidence, an exhibit showing that the summons and complaint were received by the Defendant on December 24, 2022. On January 25, 2023, the Plaintiffs filed an Affidavit of Default attesting to the lack of any response by the Defendant and requesting entry of a default judgment.
ECF No. 2.
ECF No. 3.
ECF No. 5.
On January 30, 2023, the Plaintiffs filed the Motion for Damages, in which the Plaintiffs stated that following the filing of the adversary proceeding, the Defendant provided them with the title to the vehicle, as they had been requesting for months. In the Motion for Damages, the Plaintiffs request attorney fees and costs in connection with this action in the amount of $4,340.00—for a total of 12.4 hours billed by Plaintiff's Counsel at $350.00 per hour. The Defendant was served with the Motion by first class mail at the Park Avenue Address but did not file a response. On February 2, 2023, with no responses having been filed or other appearances made by the Defendant, the Clerk's Office entered an Entry of Default as to the Defendant.
ECF No. 7.
On February 3, 2023, to afford the Defendant an opportunity to respond to Plaintiffs’ request for attorney fees and costs, the Court entered an order requiring the Defendant to file any response to the Affidavit of Default and Request for Default Judgment and Motion and Request for Damages by February 23, 2023, scheduling a hearing for March 2, 2023, and requiring Plaintiffs’ Counsel to file with the Court and serve on the Defendant a sworn affidavit outlining the actual attorney fees and costs incurred. The Defendant was served with this order. On February 27, 2023, Plaintiffs’ Counsel filed a sworn affidavit requesting total fees and costs of $4,953.58, which includes four hours she anticipated spending to bring this matter to a conclusion. At the March 2, 2023, hearing, Plaintiff's Counsel stated that after the filing of the affidavit, she spent about 45 minutes to one hour preparing for the hearing and spent time traveling to the Court. The Defendant was served by first class mail with the sworn affidavit at the Park Avenue Address. As of the date of this order, the Defendant has made no appearance in this proceeding.
ECF No. 8.
ECF No. 10, entered Feb. 5, 2023.
ECF No. 11.
ECF No. 12.
CONCLUSIONS OF LAW
The issue currently before the Court is not whether the Defendant should return the title to the Debtors’ vehicle—that was already done after the adversary proceeding was filed. The issue that remains is what damages should be awarded. This situation is similar to one which recently arose in In re Seaver , 640 B.R. 555 (Bankr. D.S.C. 2022). In that case, a creditor held a lien on the debtor's vehicle, and was required by the debtor's confirmed Chapter 13 plan to timely satisfy its lien at the earliest of the time required by applicable state law, order of the Court, or thirty (30) days from the entry of the discharge order. Id. at 556-57. Despite the debtor completing plan payments and receiving a discharge and subsequently requesting herself and through counsel for the creditor to provide her a satisfied title to the vehicle, the creditor failed to do so, and the debtor filed a motion for contempt. Id. at 557. Finding that the creditor's violation of the terms of the confirmed plan warranted finding it in civil contempt, the Court ordered the creditor to satisfy its lien on the vehicle, forward the title to the vehicle to debtor's counsel, and pay debtor's attorney fees incurred in prosecuting the Motion for Contempt. Id. at 558.
"Under federal law, the standard for making a civil contempt finding ‘is generally an objective one,’ and civil contempt ‘should not be resorted to where there is a fair ground of doubt as to the wrongfulness of the defendant's conduct.’ " Id. at 557 (quoting Taggart v. Lorenzen , ––– U.S. ––––, 139 S. Ct. 1795, 1801-02, 204 L.Ed.2d 129 (2019) ). "The Supreme Court concluded that this standard applied to bankruptcy cases when enforcing the terms of a discharge order." Id. (citing Taggart , 139 S. Ct. at 1801-02, 204 L.Ed.2d 129 ). "Although the Fourth Circuit has not expressly applied the [ Taggart ] standard in the context of a Chapter 13 case...a civil contempt finding in a Chapter 13 case for non-compliance with a confirmed Chapter 13 plan requires an objective finding that there is no fair ground of doubt as to the wrongfulness of the defendant's violation of the confirmed plan." Id. (citing In re Polvorosa , 621 B.R. 1, 9-10 (Bankr. D. Nev. 2020) ). Through default, a defendant is found to have admitted the well-pleaded factual allegations of the plaintiff's complaint. Ryan v. Homecomings Fin. Network , 253 F.3d 778, 780 (4th Cir. 2001) (citations omitted).
In this case, the uncontested factual allegations of the Plaintiffs’ complaint, coupled with the fact that Plaintiffs had to submit several written requests to the Defendant and incur the expense of filing this adversary proceeding before Defendant finally turned over the satisfied title as required by the confirmed plan, establish that there is no fair ground of doubt as to the wrongfulness of the Defendant's violation of the confirmed plan. The terms of the Debtors’ confirmed plan expressly provided that Defendant shall timely satisfy its lien upon being paid the full value of its claim. The plan, as modified, and the order confirming it were properly served on the Defendant; accordingly, under these circumstances, the Court will find the Defendant in civil contempt and assess it the Plaintiffs’ attorney fees and costs in prosecuting this action. However, as discussed at the March 2, 2023, hearing, such fees will be reduced by one hour—or $350.00—to $4,603.58.
C/A No. 17-00041-EG, ECF Nos. 67 & 74.
IT IS, THEREFORE, ORDERED, THAT, within fourteen (14) days after service of this Order, Defendant JP Morgan Chase Bank, N.A. shall tender to Plaintiffs’ Counsel, Ann Urquhart Bell, P.O. Box 80013, Charleston, SC 29416, a payment in the amount of $4,603.58.
IT IS FURTHER ORDERED THAT the Court will proceed with closing this case after thirty (30) days after entry of this Order, unless further relief is sought from the Court before then.