A debtor's possessory interest in real property, including a tenancy at sufferance, is protected by the automatic stay under bankruptcy law.
A corporate debtor operating a radio station filed for Chapter 11 bankruptcy while in possession of premises and equipment owned by a creditor. The creditor attempted to evict the debtor by locking out station personnel. The bankruptcy court held the creditor in contempt and assessed damages under 11 U.S.C. § 362(h). The district court affirmed. On appeal, the Third Circuit addressed whether a tenancy at sufferance constitutes a protected property interest and whether the creditor’s actions were willful. The court held that a debtor’s possessory interest, even under a tenancy at sufferance, is protected by the automatic stay. It further held that a willful violation requires intentional conduct with knowledge of the stay, not specific intent to violate it. The court affirmed the district court’s judgment.
At page 329 Defining willfulness in automatic stay violations66 citing cases“although section 362(h) refers to an individual, the section has uniformly been held to be applicable to a corporate debtor.”
- Bankvest Capital Corp. v. Boston (In Re Bankvest Capital Corp.), 276 B.R. 12 (Bankr. D. Mass. 2002).published But see In re Atlantic Business and Community Corp., 901 F.2d 325, 329 (3d Cir.1990); Budget Service Co. v. Better Homes of Va., Inc., 804 F.2d 289 , 292 (4th Cir.1986).
- Rushton v. Bank of Utah (In re C.W. Mining Co.), 477 B.R. 176 (B.A.P. 10th Cir. 2012).published(Although Section 362(h) refers to an individual, the section has uniformly been held to be applicable to a corporate debtor.)
- Boltz-Rubinstein v. Bank of Am. (In re Boltz-Rubinstein), 596 B.R. 494 (Bankr. E.D. Pa. 2019).published“the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional”
- Odom v. Philadelphia Parking Auth. (In re Odom), 571 B.R. 687 (Bankr. E.D. Pa. 2017).published“the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional”
- Black Diamond Energy of Delaware, Inc., No. 22-21448, 2024 WL 4907104 (Bankr. W.D. Pa. Nov. 27, 2024).Bus. & Cmty. Corp., 901 F.2d at 329; Roberts v. Vara (In re Roberts), No. 21-20618-JAD, 2024 WL 2050561 , at *11 n.11 (Bankr. W.D.
- Scungio Borst & Assocs. LLC, No. 22-10609 (Bankr. E.D. Pa. Aug. 4, 2023).Cuffee, 901 F.2d at 329.
- Internal Revenue Serv. v. Murphy, 892 F.3d 29 (1st Cir. 2018).publishedBus. & Cmty. Corp., 901 F.2d at 329; see also Pinkstaff v. United States (In re Pinkstaff), 974 F.2d 113, 115 (9th Cir. 1992) ("As it is undisputed that the IRS acted with knowledge of the bankruptcy filing, it necessarily follows that the…
- North Cent. Pennsylvania Reg'l Plan. & Dev. Comm'n v. Eckert (In re Watson), 505 B.R. 634 (Bankr. M.D. Pa. 2014).publishedIn re Atlantic Business and Community Corp., 901 F.2d 325, 329 (3rd Cir.1990).
- In re Nixon, 419 B.R. 281 (Bankr. E.D. Pa. 2009).published Corp., 901 F.2d at 329; see also In re Johnson, 501 F.3d 1163, 1171-72 (10th Cir.2007).
- In re Panek, 402 B.R. 71 (Bankr. D. Mass. 2009).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir.1990).
Show 56 more citing cases
- In re Brooks, 414 B.R. 65 (Bankr. E.D. Pa. 2009).publishedThe Third Circuit has defined willful as "an intentional or deliberate act done with knowledge that the act is in violation of the stay” and stated that damages are appropriate “upon a finding that the defendant knew of the automatic stay…
- Spinner v. Cash in a Hurry, LLC (In Re Spinner), 398 B.R. 84 (Bankr. N.D. Ga. 2008).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir.1990).
- Pico Vidal v. Ruiz Alvarado, 377 B.R. 788 (D.P.R. 2007).published Neither Mrs. Vidal nor Appellant moved the Bankruptcy Court to lift the stay before seeking to evict the Debtors. “[C]ourts have recognized that a tenant’s possessory interest in property is included in the bankruptcy estate when the bankr…
- Johnson v. Smith (In Re Johnson), 501 F.3d 1163 (10th Cir. 2007).publishedBus. & Cmty. Corp. ), 901 F.2d 325, 329 (3d Cir.1990); Knaus v. Concordia Lumber Co. (In re Knaus), 889 F.2d 773, 775 (8th Cir.1989); Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir.1989).
- In re Singer, 368 B.R. 435 (Bankr. E.D. Pa. 2007).published“an intentional or deliberate act done with knowledge that the act is in violation of the stay”
- Green Tree Servicing, LLC v. Taylor (Taylor), 369 B.R. 282 (S.D. W. Va. 2007).published Group, Inc. v. Kaneb, 196 F.3d 265, 268-269 (1st Cir.1999); In re Lansdale Family Restaurants, Inc., 977 F.2d 826, 829 (3d Cir.1992); In re Atlantic Business and Community Corp., 901 F.2d at 329; In re Bloom, 875 F.2d at 227 .
- In re Jester, 344 B.R. 331 (Bankr. E.D. Pa. 2006).published“an intentional or deliberate act done with knowledge that the act is in violation of the stay”
- In re Steward, 338 B.R. 654 (Bankr. D.N.J. 2006).publishedRather, the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant’s actions which violated the stay were intentional.” In re Atlantic Bus. and Cmty. Corp., 901 F.2d 325, 329 (3d Ci…
- Allen v. Wells Fargo Bank Minnesota, N.A., 334 B.R. 746 (D.D.C. 2005).publishedCorp., 901 F.2d 325, 329 (3d Cir.1990)).
- In re Schafer, 315 B.R. 765 (Bankr. D. Colo. 2004).publishedSee also, Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir.1989); In re Crysen/Montenay Energy Co., 902 F.2d 1098 (2d Cir.1990); In re Atlantic Bus. and Cmty. Corp., 901 F.2d 325, 329 (3rd Cir.1990); Budget Serv.
- In re Peregrine Sys., Inc., 314 B.R. 31 (Bankr. D. Del. 2004).publishedIn re University Medical Center, 973 F.2d 1065 , 1088 (3d Cir.1992), citing In re Atlantic Business and Community Corp., 901 F.2d 325, 329 (3d Cir.1990).
- Smith v. Homes Today, Inc. (In Re Smith), 296 B.R. 46 (Bankr. M.D. Ala. 2003).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir.1990).
- Montgomery Ward, LLC v. Wiseknit Factory, Ltd. (In Re Montgomery Ward, LLC), 292 B.R. 49 (Bankr. D. Del. 2003).publishedCorp.), 901 F.2d 325, 329 (3d Cir.1990). 8 As discussed above, Wiseknit’s pursuit of its contract claim violated the automatic stay.
- In re Gagliardi, 290 B.R. 808 (Bankr. D. Colo. 2003).published In re Atlantic Bus. & Cmty. Corp., 901 F.2d at 328. 24 .
- Diamond Indus. Corp. v. Alakrah (In Re Diamond Indus. Corp.), 265 B.R. 707 (D.V.I. 2003).publishedCuffee v. Atlantic Business and Community Development Corp. (In re Atlantic Business and Community Development Corp.), 901 F.2d 325, 329 (3d Cir.1990).
- In re Ocasio, 272 B.R. 815 (B.A.P. 1st Cir. 2002).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir.1990).
- Varela v. Ocasio (In re Ocasio), 272 B.R. 809 (B.A.P. 1st Cir. 2002).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir. 1990).
- Pardo v. Pacificare of Texas, Inc. (In Re APF Co.), 264 B.R. 344 (Bankr. D. Del. 2001).published(Although Section 362(h) refers to an individual, the section has uniformly been held to be applicable to a corporate debtor)
- Cherry v. Arendall (In Re Cherry), 247 B.R. 176 (Bankr. E.D. Va. 2000).publishedBusiness & Community Corp., 901 F.2d at 329; Crysen Montenay Energy Co. v. Esselen Assoc., Inc. (In re Crysen Montenay Energy Co.), 902 F.2d 1098, 1105 (2nd Cir.1990); Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir. 1989). 17 .
- Fleet Mortg. Grp., Inc. v. Kaneb, 196 F.3d 265 (1st Cir. 1999).publishedCorp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 329 (3d Cir.1990).
- Fleet Mortg. Grp. v. Kaneb, No. 98-9012 (1st Cir. Nov. 8, 1999).publishedCorp. (In re Atlantic <br>Business and Community Corp.), 901 F.2d 325, 329 (3d Cir. 1990). <br>In cases where the creditor received actual notice of the automatic <br>stay, courts must presume that the violation was deliberate.
- Diviney v. Nationsbank of Texas (In Re Diviney), 225 B.R. 762 (B.A.P. 10th Cir. 1998).publishedCorp. (In re Atlantic Bus. and Community Corp.), 901 F.2d 325, 329 (3rd Cir.1990).
- In re Univ. Med. Ctr., 973 F.2d 1065 (3d Cir. 1992).published
- In re David Goodman, D/B/A S.F.D. Imports, Sendo Stores, Brass Disc., Debtor. Johnston Env't Corp., Successor to Int'l Packaging Corp., Plaintiff-Appellee-Cross-Appellant v. James E. Knight John A. Knight Mary Katherine Knight, Individually, & Trs. of the Katherine McClellan Knight Revocable Trust Uta June 2, 1987, Defendants- Appellants- Cross-Appellees. In Re David Goodman, D/B/A S.F.D. Imports, Sendo Stores, Brass Disc., Debtor. Johnston Env't Corp., Successor to Int'l Packaging Corp. Santa Ana Props. David Goodman v. James E. Knight John A. Knight Mary Katherine Knight, Individually, & Trs. of the Katherine McClellan Knight Revocable Trust Uta June 2, 1987, 991 F.2d 613 (9th Cir. 1993).published
- A & J Auto Sales, Inc. v. United States (In Re a & J Auto Sales, Inc.), 205 B.R. 676 (Bankr. D.N.H. 1996).published
- In re Manuel, 212 B.R. 517 (Bankr. E.D. Va. 1997).published
- Havelock v. Taxel (In Re Pace), 159 B.R. 890 (B.A.P. 9th Cir. 1993).published
- Moratzka v. Visa U.S.A. (In Re Calstar, Inc.), 159 B.R. 247 (Bankr. D. Minn. 1993).published
- Lucabaugh v. Internal Revenue Serv. (In Re Lucabaugh), 262 B.R. 900 (E.D. Pa. 2000).published
- Smith v. GTE North Inc. (In Re Smith), 170 B.R. 111 (Bankr. N.D. Ohio 1994).published
- Owen v. Treadway (In Re Owen), 169 B.R. 261 (Bankr. D. Me. 1994).published
- Flynn v. Internal Revenue Serv. (In Re Flynn), 169 B.R. 1007 (Bankr. S.D. Ga. 1994).published
- Elder-Beerman Stores Corp. v. Thomasville Furniture Indus. Inc. (In Re Elder-Beerman Stores Corp.), 197 B.R. 629 (Bankr. S.D. Ohio 1996).published
- Express Am., Inc. v. Pierce (In Re Express Am., Inc.), 132 B.R. 535 (Bankr. W.D. Pa. 1991).published
- In re Abacus Broad. Corp., 150 B.R. 925 (Bankr. W.D. Tex. 1993).published
- In re Rusnak, 184 B.R. 459 (Bankr. E.D. Pa. 1995).published
- United States v. Washington (In Re Washington), 184 B.R. 172 (S.D. Ga. 1995).published
- Taborski v. United States Internal Revenue Serv., 141 B.R. 959 (N.D. Ill. 1992).published
- Rosas v. Monroe Cnty. Tax Claim Bureau, 323 B.R. 893 (Bankr. M.D. Pa. 2004).published
- In re Bennett, 135 B.R. 72 (Bankr. S.D. Ohio 1992).published
- Meis-Nachtrab v. Griffin (In Re Meis-Nachtrab), 190 B.R. 302 (Bankr. N.D. Ohio 1995).published
- Putnam v. Rymes Heating Oils, Inc. (In Re Putnam), 167 B.R. 737 (Bankr. D.N.H. 1994).published
- Barnett Bank of Se. Georgia, N.A. v. Trust Co. Bank of Se. Georgia, N.A. (In Re Ring), 178 B.R. 570 (Bankr. S.D. Ga. 1995).published
- Bohm v. Howard (In Re Howard), 428 B.R. 335 (Bankr. W.D. Pa. 2010).published
- Off. Comm. of Unsecured Creditors of High Strength Steel, Inc. ex rel. Est. of High Strength Steel, Inc. v. Lozinski (In Re High Strength Steel, Inc.), 269 B.R. 560 (Bankr. D. Del. 2001).published
- Paradise Towing, Inc. v. CIT Grp./Sales Fin., Inc., 368 B.R. 569 (W.D. Tex. 2005).published
- In re Vill. Craftsman, Inc., 160 B.R. 740 (Bankr. D.N.J. 1993).published
- Davis v. Internal Revenue Serv., 136 B.R. 414 (E.D. Va. 1992).published
- Manlon, Inc. v. Sanitation Dist. No. 1 of Campbell & Kenton Counties (In Re Manlon, Inc.), 168 B.R. 594 (Bankr. E.D. Ky. 1994).published
- Johnston Env't Corp. v. Knight (In re Goodman), 153 F.2d 613 (9th Cir. 1993).published
- Washington v. Internal Revenue Serv. (In re Washington), 172 B.R. 415 (D. Ga. 1994).published
- Mother African Union Methodist Church v. Conf. of AUFCMP Church (In re Conf. of African Union First Colored Methodist Protestant Church), 184 B.R. 207 (Bankr. D. Del. 1995).published
- Univ. Med. Ctr. v. Sullivan (In re Univ. Med. Ctr.), 973 F.2d 1065 (3d Cir. 1992).published
- Johnston Env't Corp. v. Knight, 991 F.2d 613 (9th Cir. 1993).published
- In re Black Diamond Energy of Delaware, Inc. v. Wyoming Oil & Gas Conservation Comm'n, No. 2:25-cv-00145 (W.D. Pa. Dec. 31, 2025).
- Jove Eng'g, Inc. v. Internal Revenue Serv., 92 F.3d 1539 (11th Cir. 1996).published
At page 328 Possessory interest in real property under automatic stay30 citing casesa possessory interest in real property [including a tenancy at sufferance] is within the ambit of the estate in bankruptcy under Section 541, and thus the protection of the automatic stay of Section 362.
- Farmers Bank & Trust Co. v. Wells (In re Wells), 536 B.R. 264 (Bankr. E.D. Ark. 2015).published(a possessory interest in real property is within the ambit of the estate in bankruptcy under Section -541, and thus the protection of the automatic stay of Section 362)
- St. Clair v. Beneficial Mortg. Co. (In Re St. Clair), 251 B.R. 660 (D.N.J. 2000).published (The language of Section 362 makes clear that mere possession of property at the time of filing is sufficient to invoke the protections of the automatic stay.)
- Shane Michael Myers, No. 21-40016 (Bankr. W.D. Ky. Nov. 19, 2021).(a possessory interest in real property is within the ambit of the estate in bankruptcy under Section 541, and this the protection of the automatic stay of Section 362)
- Oya v. Wells Fargo Bank N.A., No. 3:18-cv-01999 (S.D. Cal. Sept. 19, 2019).“we agree with 9 the district court that the actions taken by cuffee violated the automatic stay provisions of 10 section 362(a)(3) of the bankruptcy code.”
- Majestic Star Casino, LLC v. Barden Dev., Inc., 716 F.3d 736 (3d Cir. 2013).published “we hold that a debtor's possession of a tenancy at sufferance creates a property interest as defined under section 541, and is protected by section 362....”
- In re Walker, 171 B.R. 197 (Bankr. E.D. Pa. 1994).published([A] possessory interest in real property is within the ambit *209 of the estate in bankruptcy under Section 541, and thus the protection of the automatic stay of Section 362.)
- Belarminio Peralta v., 48 F.4th 178 (3d Cir. 2022).published Id. at 328.
- In re Castle Serv., LLC, 560 B.R. 587 (Bankr. D. Utah 2016).published(a possessory interest in real property [including a tenancy at sufferance] is within the ambit of the estate in bankruptcy under Section 541, and thus the protection of the automatic stay of Section 362.)
- Buncher Co. v. Flabeg Solar US Corp. (In re Flabeg Solar US Corp.), 499 B.R. 475 (Bankr. W.D. Pa. 2013).published Clearly, “[t]he scope of the automatic stay is undeniably broad.” See Cuffee v. Atlantic Business and Community Development Corp. (In re Atlantic Business and Community Corp.), 901 F.2d 325, 327 (3d Cir.1990).
- In re Lehigh Valley Props., Inc., 482 B.R. 127 (Bankr. E.D. Pa. 2012).publishedBus. and Cmty. Corp.), 901 F.2d 325, 328 (3d Cir.1990); see also In re Dunlop, 378 B.R. 85, 91 (Bankr.E.D.Pa.2007). .
Show 20 more citing cases
- Moore v. Complete Cash Holdings, LLC (In Re Moore), 448 B.R. 93 (Bankr. N.D. Ga. 2011).published E.g., Convenient Food Mart No. 144, Inc. v. Convenient Industries of America, Inc. (In re Convenient Food Mart No. 144, Inc.), 968 F.2d 592 (6th Cir.1992); In re Atlantic Business and Community Corporation, 901 F.2d 325, 328 (3d Cir.1990);…
- Kline v. Tiedemann (In Re Kline), 424 B.R. 516 (Bankr. D.N.M. 2010).publishedSee also Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 , 354 (5th Cir.2008); Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210 (9th Cir. 2002); In re Crysen/Montenay Energy Co., 902 F.2d 1098, 1104-05 (2nd Cir.1990); In re Atlantic…
- Pico Vidal v. Ruiz Alvarado, 377 B.R. 788 (D.P.R. 2007).published Neither Mrs. Vidal nor Appellant moved the Bankruptcy Court to lift the stay before seeking to evict the Debtors. “[C]ourts have recognized that a tenant’s possessory interest in property is included in the bankruptcy estate when the bankr…
- In re Williams, 371 B.R. 102 (Bankr. E.D. Pa. 2007).published(a debtor’s bare possessory interest in real property is property of the estate under 11 U.S.C. § 541 and is thus protected from being taken under 362(a)(3))
- Theresa McAdam v. Raymond Lorden, No. 04-CV-472-PB (D.N.H. Sept. 26, 2005).publishedIn re Atlantic Bus, and Cmty. Corp., 901 F.2d 325, 328 (3d Cir. 1990); In re 48th St.
- In re Peterson, 297 B.R. 467 (Bankr. W.D.N.C. 2003).published See, Budget Service Co. v. Better Homes of Virginia, Inc., 804 F.2d 289, 292-93 (4th Cir.1986); In re Atlantic Business and Community Corp., 901 F.2d 325, 328 (3rd Cir.1990); In re Hamrick, 175 B.R. at 893 ; In re Shealy, 90 B.R. 176, 179…
- In re Gagliardi, 290 B.R. 808 (Bankr. D. Colo. 2003).published In re Atlantic Bus. & Cmty. Corp., 901 F.2d at 328. 24 .
- Spookyworld, Inc. v. Town of Berlin, 346 F.3d 1 (1st Cir. 2003).published
- In re Convenient Food Mart No. 144, Inc., Debtor. Convenient Food Mart No. 144, Inc. Robert F. Ristaneo v. Convenient Indus. of Am., Inc., 968 F.2d 592 (6th Cir. 1992).published
- Joseph R. Solfanelli Natalie G. Solfanelli v. Corestates Bank N.A., 203 F.3d 197 (3d Cir. 2000).published
- Colon v. Hart (In Re Colon), 114 B.R. 890 (Bankr. E.D. Pa. 1990).published
- Matter of Delex Mgmt., 155 B.R. 161 (Bankr. W.D. Mich. 1993).published
- McMahon Books, Inc. v. New Castle Assocs. (In Re McMahon Books, Inc.), 173 B.R. 868 (Bankr. D. Del. 1994).published
- Hamrick v. United States ex rel. Def. Fin. & Acct. Serv. (In Re Hamrick), 175 B.R. 890 (W.D.N.C. 1994).published
- Fed. Nat'l Mortg. Ass'n v. Fitzgerald (In Re Fitzgerald), 237 B.R. 252 (Bankr. D. Conn. 1999).published
- In re Dunlop, 378 B.R. 85 (Bankr. E.D. Pa. 2007).published
- James Franklin Cook, Jr., No. 20-63764 (Bankr. N.D. Ga. May 11, 2020).
- In re Belmonte, 240 B.R. 843 (Bankr. E.D. Pa. 1999).published
- Bankers Trust Co. v. Grove (In Re Grove), 208 B.R. 845 (Bankr. W.D. Pa. 1997).published
- In re Ariel Barel v., No. 21-1849 (3d Cir. Sept. 21, 2021).unpublished
At page 327 Defining the scope of property of the estate10 citing casesobserving that “the legislative history [of § 541] relates that the intended scope of this section is broad,” and holding that “a possessory interest in real property is within the ambit of the estate in bankruptcy under Section 541, and thus the protection of the automatic stay of Section 362.
- St. Clair v. Beneficial Mortg. Co. (In Re St. Clair), 251 B.R. 660 (D.N.J. 2000).published Accord Atlantic Business, 901 F.2d at 328 (“The language of Section 362 makes clear that mere possession of property at the time of filing is sufficient to invoke the protections of the automatic stay.”).
- Toy Quest Ltd. v. ASI, Inc., No. 1:18-cv-02923 (D.N.J. July 18, 2019). (observing that “the legislative history [of § 541] relates that the intended scope of this section is broad,” and holding that “a possessory interest in real property is within the ambit of the estate in bankruptcy unde…)
- Buncher Co. v. Flabeg Solar US Corp. (In re Flabeg Solar US Corp.), 499 B.R. 475 (Bankr. W.D. Pa. 2013).published “[t]he scope of the automatic stay is undeniably broad”
- McCool v. Beneficial (In Re McCool), 446 B.R. 819 (Bankr. N.D. Ohio 2010).publishedId; In re Atlantic Business and Community Corp., 901 F.2d 325, 327 (3rd Cir.1990).
- In re Krystal Cadillac Oldsmobile GMC Truck, Inc., Debtor. Krystal Cadillac Oldsmobile GMC Truck, Inc. Lawrence v. Young v. Gen. Motors Corp., Krystal Cadillac Oldsmobile GMC Truck, Inc., in 97-7117. In Re Krystal Cadillac Oldsmobile GMC Truck, Inc., Debtor. Krystal Cadillac Oldsmobile GMC Truck, Inc. Lawrence v. Young v. Gen. Motors Corp., Lawrence v. Young, In, 142 F.3d 631 (3d Cir. 1998).published
- Univ. Med. Ctr. v. Sullivan, 125 B.R. 121 (E.D. Pa. 1991).published
- In re Briggs, 143 B.R. 438 (Bankr. E.D. Mich. 1992).published
- Nigro v. Oxford Dev. Co. (In Re M.J. Shoearama, Inc.), 137 B.R. 182 (Bankr. W.D. Pa. 1992).published
- Soliman v. Spencer (In Re Spencer), 115 B.R. 471 (D. Del. 1990).published
- Krystal Cadillac Oldsmobile GMC Truck, Inc. v. Gen. Motors Corp. (In Re Krystal Cadillac Oldsmobile GMC Truck, Inc.), 142 F.3d 631 (3d Cir. 1998).
the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional
- Boltz-Rubinstein v. Bank of Am. (In re Boltz-Rubinstein), 596 B.R. 494 (Bankr. E.D. Pa. 2019).published(the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional)
- Odom v. Philadelphia Parking Auth. (In re Odom), 571 B.R. 687 (Bankr. E.D. Pa. 2017).published(the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant’s actions which violated the stay were intentional)
At page 325 OPINION OF THE COURT COWEN, Circuit Judge. Appellant, James E. Cuffee (“Cuffee”), appeals from an order of the district court which affirmed a determination of…1 citing case
- Jahn v. Bacon (In re East Tech Co.), 528 B.R. 743 (Bankr. E.D. Tenn. 2015).publishedThe court joined the Second and Third Circuit Courts of Appeals “in holding that a tenancy at sufferance is a possessory interest in real property within the scope of the estate in bankruptcy under section 541.” Id. (relying on In re 48th…
v.
ATLANTIC BUSINESS AND COMMUNITY DEVELOPMENT CORPORATION, a Corporation of the State of New Jersey. Appeal of James E. CUFFEE
OPINION OF THE COURT
COWEN, Circuit Judge.Appellant, James E. Cuffee (“Cuffee”), appeals from an order of the district court which affirmed a determination of the bankruptcy court that he violated the automatic stay provision of 11 U.S.C. § 362(a)(3) (1988), held him in contempt, and assessed punitive and compensatory damages under Section 362(h). The district court held that appellee’s tenancy at sufferance created a property interest protected by Section 362 of the Bankruptcy Code. The district court also held that Cuffee’s actions in regard to damages under Section 362(h) were properly assessed for willful violation of the automatic stay. We agree with these conclusions and will affirm the decision of the district court. We have jurisdiction pursuant to 28 U.S.C. § 1291 (1982).
I.
On May 15, 1986, the debtor-appellee, Atlantic Business Community Development Corporation (“ABCD”) filed a petition in bankruptcy under Chapter 11 of the Bankruptcy Code. Following ABCD’s filing of its petition in bankruptcy, it continued to operate a radio station in Atlantic City, New Jersey, known as WUSS-AM. Cuffee was the owner of the building, studio equipment, office furnishings and record albums used by ABCD in its business. ABCD originally entered into possession of the premises and equipment with Cuffee’s permission. ABCD’s trustee in bankruptcy appointed a custodian for the property, Kevin Hall (“Hall”).
In April of 1988, Cuffee had a letter delivered to Hall which stated in pertinent part: “This is to advise you that effective immediately radio station WUSS can no longer use the premises located at 1500 Absecon Boulevard, Atlantic City, New Jersey 08401 or the transmitter for its operations.” App. at 43a. Thereafter, Cuffee tried to repossess the radio station and to evict ABCD from the premises. For example, he installed locks on the doors of the studio during the early hours of the morning while station personnel were on the premises.
As a result of these actions, the trustee filed an order requiring Cuffee to show cause why he should not be held in contempt for violating the automatic stay provision. On April 27, 1988, the bankruptcy court entered an order restraining Cuffee[*327] from further interference with the operation of the radio station and ordering him to allow the trustee free access to the studio. Even in the face of this order, Cuffee continued his efforts to take possession of the radio station and transmitter. Station personnel discovered larger locks on the door to the studio. Cuffee also threatened to secure the studio with station personnel in it if the premises were not vacated.
In his own testimony Cuffee admitted to these actions, but claimed they were justified because of his concern over the safety and security of the studio, and an alleged lack of insurance coverage by the bankruptcy estate. Because of the disturbance caused by Cuffee, the trustee ordered station personnel to cease broadcast operations in order to prevent any risk of injury. The trustee claimed that as a result of being forced off the air, the debtor lost approximately $8,600.00 in commercial revenues.
Because Cuffee placed additional locks on the studio, the bankruptcy court found that Cuffee had violated the automatic stay provisions of Section 362 of the Bankruptcy Code. The court further found that Cuffee had acted willfully, and assessed compensatory damages of $1,500.00 for lost advertising revenue, and punitive damages of $5,000.00 based on a finding that Cuffee “acted with willfulness and wantonness in effectuating a lockout of the station.” App. at 53a-57a. The court also awarded attorney’s fees and costs.
On appeal, the district court affirmed the judgment of the bankruptcy court. Cuffee now appeals to this Court. The district court’s conclusions of law are subject to plenary review by this Court. We review findings of fact under the clearly erroneous standard. Fed.R.Civ.P. 52(a).
II.
A.
Cuffee argues on this appeal that since ABCD was a mere tenant at sufferance, Cuffee’s termination of that tenancy should not constitute a violation of the automatic stay under Section 362 of the Bankruptcy Code. The threshold issue in this case is whether the interest of the debtor in the radio station and transmitter, even under a tenancy at sufferance, constitutes a protected property interest under Section 362.
Subsection 362(a)(3) provides that the filing of a Chapter 11 petition operates as a stay of “[a]ny act to obtain possession of property of the estate or of property from the estate_” 11 U.S.C. § 362(a)(3) (1988). The scope of the automatic stay is undeniably broad.
The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions.... The automatic stay also provides creditor protection. Without it, certain creditors would be able to pursue their own remedies against the debtor’s property. Those who acted first would obtain payment of the claims in preference to and to the detriment of other creditors. Bankruptcy is designed to provide an orderly liquidation procedure under which all creditors are treated equally.
H.R.Rep. No. 595, 95th Cong., 2d Sess. 340 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News 6296. The term “property of the estate” is defined in 11 U.S.C. § 541 (1988), which provides in pertinent part that the estate is comprised of “... all legal and equitable interests of the debtor in property as of the commencement of the case.” Id. § 541(a)(1). The legislative history relates that the intended scope of this section is broad. See United States v. Whiting Pools, Inc., 462 U.S. 198, 205, 103 S.Ct. 2309, 2313, 76 L.Ed.2d 515 (1988). “It includes all kinds of property, ... tangible or intangible_” H.R. Rep. 595, 95th Cong., 1st Sess. 367 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 6323.
Cuffee argues that ABCD’s access to and opportunity to use the subject equipment, property, and premises is not a pro-tectable property interest as defined by[*328] Section 541 and protected by Section 362 of the Bankruptcy Code. Although the issue before us has not previously been addressed by this circuit, the United States Court of Appeals for the Second Circuit in In Re 48th St. Steakhouse, Inc., 835 F.2d 427, 430 (2d Cir.1987), cert. denied, 485 U.S. 1035, 108 S.Ct. 1596, 99 L.Ed.2d 910 (1988), has held that “mere possessory interest in real property, without any accompanying legal interest, is sufficient to trigger protection of the automatic stay.” See also Matter of Gsvc Restaurant Corp., 3 B.R. 491, 494 (Bankr.S.D.N.Y.), aff'd, 10 B.R. 300 (S.D.N.Y.1980).
In 48th St. Steakhouse, the debtor purchased a restaurant business named Charley O’s. Charley O’s leased the premises from the creditor. Thereafter, the creditor entered into a new lease with the debtor. The debtor then assigned its lease of the premises to I.S.H. Liquidating Corp., an affiliate of Charley O’s. The debtor remained in continuous possession of the premises and paid rent directly to the creditor, until it filed a Chapter 11 bankruptcy petition. The creditor sent a notice of default to I.S.H. which stated that if the rent was not paid within five days, the creditor would terminate the lease. The Court held that: “The 48th Street lease constituted property of the bankrupt estate under 11 U.S.C. § 541, and therefore, the creditor’s attempt to terminate the lease as to I.S.H. violated the debtor’s right to an automatic stay of ‘any act to obtain possession of property of' the estate.’ 11 U.S.C. § 362(a)(3).” 48th St. Steakhouse, 835 F.2d at 2129.
We join with the Court of Appeals for the Second Circuit in holding that a posses-sory interest in real property is within the ambit of the estate in bankruptcy under Section 541, and thus the protection of the automatic stay of Section 362. See In re 48th St. Steakhouse, 61 B.R. 182, 187 (S.D.N.Y.1986), aff'd, 835 F.2d 427 (2d Cir.1987), cert. denied, 485 U.S. 1035, 108 S.Ct. 1596, 99 L.Ed.2d 910 (1988). Accord In Re Turbowind, Inc., 42 B.R. 579, 585 (Bankr.S.D. Cal.1984); Matter of Marcott, 30 B.R. 633, 636 (Bankr.W.D.Wis.1983).
Applying the above principles to the facts of this case, we hold that a debtor’s possession of a tenancy at sufferance creates a property interest as defined under Section 541, and is protected by Section 362 of the Bankruptcy Code.[1] The language of Section 362 makes clear that mere possession of property at the time of filing is sufficient to invoke the protections of the automatic stay. The record reveals that at the time of filing the Chapter 11 petition the debtor was effectively in possession of the radio station and transmitter with Cuf-fee’s permission, and therefore had an interest in property protected by section 362(a)(3). Cuffee took measures to evict ABCD from the premises by locking its employees out. Because ABCD’s possession of property, even under a tenancy at sufferance, is an interest protected by Section 362(a)(3), we agree with the district court that the actions taken by Cuffee violated the automatic stay provisions of Section 362(a)(3) of the Bankruptcy Code.
B.
The debtor seeks sanctions under Section 362(h) for Cuffee’s violation of the automatic stay. Cuffee argues that, even if this Court were to hold that he violated the automatic stay, his actions were not done in bad faith and should not be the basis for an assessment of compensatory damages, punitive damages, and attorney’s fees and costs. Section 362(h) of 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 attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” 11 U.S.C. § 362(h) (1988) (emphasis added). Section 362(h) requires a finding of a willful violation of the stay. Cuffee contends that his actions were not willful within the meaning[*329] of Section 362(h).[2] Cuffee’s position is untenable given the actions which he engaged in to evict his tenant.
Although Section 362(h) refers to an individual, the section has uniformly been held to be applicable to a corporate debtor. See Budget Service Co. v. Better Homes of Va., 804 F.2d 289, 292 (4th Cir.1986). This court has not previously defined “willful” as it is used in subsection (h). A useful definition, with which we agree, was enunciated by the United States Court of Appeals for the Ninth Circuit in In Re Bloom, 875 F.2d 224, 227 (9th Cir.1989). In In Re Bloom, the Court held that:
A ‘willful violation’ does not require a specific intent to violate the automatic stay. Rather, the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant’s actions which violated the stay were intentional. Whether the party believes in good faith that it had a right to the property is not relevant to whether the act was ‘willful’ or whether compensation must be awarded.
In Re Bloom, 875 F.2d at 227 [quoting INSLAW, Inc. v. United States, 83 B.R. 89, 165 (Bankr.D.D.C.1988).] See also Budget Service Co. v. Better Homes of Va., 804 F.2d 289, 290 (4th Cir.1986) (“Sanctions were properly assessed against lessor for willful violation of automatic stay, based on ample evidence to support conclusion that lessor knew of pending petition and intentionally attempted to repossess vehicles in spite of it.”). The bankruptcy courts have construed “willful” as used in the code to mean an intentional or deliberate act done with knowledge that the act is in violation of the stay. See In Re Tel-A-Communications Consultants, Inc., 50 B.R. 250, 254 (Bankr.D.Conn.1985); In Re Forty-Eight Insulations, Inc., 54 B.R. 905, 909 (Bankr.N.D.Ill.1985). Punitive damages may also be awarded where the conduct was in bad faith.
Cuffee’s actions clearly satisfy our definition of willful. Notwithstanding Cuffee’s claim that he acted in good faith, there is ample evidence to support the conclusion that he acted intentionally and with knowledge of the automatic stay as a result of the pending bankruptcy proceedings. Cuf-fee took affirmative action to prevent ABCD from gaining access to the studio property, causing a cessation in operations and a loss of advertising revenue. Even after the bankruptcy court entered an order restraining Cuffee from further interference with the operations of the radio station, he continued efforts to take possession of the radio station and transmitter. The finding of fact that Cuffee willfully violated the automatic stay so as to warrant the imposition of punitive damages, attorney’s fees and costs was not clearly erroneous.
III.
The order of the district court will be affirmed in all respects. Costs taxed against appellant.
For the purpose of this appeal, we accept the contention of the parties that ABCD was a tenant at sufferance.
As a preliminary matter it should be noted that Cuffee does not contest the district court’s finding that the bankruptcy estate was harmed as a result of his action. Thus, the first requirement for the award of damages under Section 362(h) has been met.