In Re Adams, 65 B.R. 646 (Bankr. E.D. Pa. 1986). · Go Syfert
In Re Adams, 65 B.R. 646 (Bankr. E.D. Pa. 1986). Cases Citing This Book View Copy Cite
41 citation events (1 in the last 25 years) across 11 distinct courts.
Strongest positive: In Re Sok Jun Kong (nyeb, 1993-12-27) · Strongest negative: In Re Gillis (hib, 1988-10-19)
Treatment trajectory · 1986 → 2026 · click a year to view as-of
1986 2006 2026
Top citers, strongest first. 21 distinct citers.
discussed Cited "but see" In Re Gillis
Bankr. D. Haw. · 1988 · signal: but see · confidence high
Held, Inc., 77 B.R. 388 (Bkrtcy.N.D.N.Y.1987) (clear language of Section 365(d)(4) empowers court to order immediate surrender, rather than relegate to state court eviction action); but see, In re Adams, 65 B.R. 646 (Bkrtcy.E.D.Pa. 1986). 23.
discussed Cited as authority (rule) In Re Sok Jun Kong
Bankr. E.D.N.Y. · 1993 · confidence medium
“Some courts have held that the deemed rejection of a lease under section 365(d)(4) ‘merely places the creditor[-lessor] in a position to pursue remedies under the state law of landlord and tenant to obtain possession of the premises.’ ” Id. at 634 (quoting In re Adams, 65 B.R. 646, 649 (Bankr.E.D.Pa.1986)).
discussed Cited as authority (rule) Road Patch Services, Inc. v. Carapico (In Re Road Patch Services, Inc.)
Bankr. E.D. Pa. · 1993 · confidence medium
February 13, 1991), aff'd, 944 F.2d 896 (3rd Cir.1991) (self-help execution by a commercial landlord is illegal); and In re Adams, 65 B.R. 646, 649 (Bankr.E.D.Pa.1986) (self-help evictions are impermissible under Pennsylvania law).
discussed Cited as authority (rule) In Re Elm Inn, Inc., Debtor. Eldon Anderson Shirley Anderson v. Elm Inn, Inc. Continental Savings of America
9th Cir. · 1991 · confidence medium
Some courts have held that the deemed rejection of a lease under section 365(d)(4) “merely places the creditor[-lessor] in a position to pursue remedies under the state law of landlord and tenant to obtain possession of the premises.” In re Adams, 65 B.R. 646, 649 (Bankr.E.D.Pa.1986); see also In re Re-Trac Corp., 59 B.R. 251, 258 (Bankr.D.Minn.1986) (“such relief is properly sought by complaint”).
discussed Cited as authority (rule) In Re Morningstar Enterprises, Inc.
Bankr. E.D. Pa. · 1991 · confidence medium
One line of authority, espoused by this court in Boston Business Machines, 87 B.R. at 871 ; and In re Adams, 65 B.R. 646, 647-49 (Bankr.E.D.Pa.1986), holds that, even if a lease is rejected by force of § 365(d)(4), the landlord is merely entitled to relief from the automatic stay to enforce its rights against the debtor-tenant under applicable state law.
discussed Cited as authority (rule) In Re Tulio
Bankr. E.D. Pa. · 1990 · confidence medium
Assuming arguendo, as we did in In re Adams, 65 B.R. 646, 648-49 (Bankr.E.D.Pa.1986), that § 365(d)(4) does apply in Chapter 13 cases, we acknowledge the presence of a body of cases holding that a landlord may waive the protection of his interests set forth in § 365(d)(4) by conduct inconsistent with rejection of a lease.
cited Cited as authority (rule) 222 Liberty Associates v. EESCO Electric, Inc. (In Re 222 Liberty Associates)
Bankr. E.D. Pa. · 1989 · confidence medium
Cohen & Sons Caterers, Inc., 97 B.R. 808, 814-16 (Bankr.E.D.Pa.1989); In re Aponte, 82 B.R. 738, 742-47 (Bankr.E.D.Pa.1988); and In re Adams, 65 B.R. 646, 649-50 (Bankr.E.D.Pa.1986).
cited Cited as authority (rule) Panas v. Polonia Savings & Loan Ass'n (In Re Panas)
Bankr. E.D. Pa. · 1989 · confidence medium
Cf In re C & C TV & Appliance, Inc., 97 B.R. 782, 788 (Bankr.E.D.Pa.1989); and In re Adams, 65 B.R. 646, 649-50 (Bankr.E.D.Pa.1986).
examined Cited as authority (rule) Adams v. Philadelphia Housing Authority (In Re Adams) (4×) also: Cited "see"
Bankr. E.D. Pa. · 1989 · confidence medium
See Sudler, supra, 71 B.R. at 787 ; and In re Adams, 65 B.R. 646, 648 (Bankr.E.D.Pa.1986).
discussed Cited as authority (rule) In Re Garrett Road Supermarket, Inc.
Bankr. E.D. Pa. · 1988 · confidence medium
Cf. Boston Business Machines, supra, 87 B.R. 867, 870-71 ; and In re Adams, 65 B.R. 646, 647-49 (Bankr.E.D.Pa.1986) (last clause of § 365(d)(4) should not be read to enhance the landlord’s position due solely to the debtor’s bankruptcy filing).
examined Cited as authority (rule) In Re Boston Business MacHines (3×) also: Cited "see"
Bankr. E.D. Pa. · 1988 · confidence medium
We have already squarely held, in In re Adams, 65 B.R. 646, 647-49 (Bankr.E.D.Pa.1986), that the last clause of § 365(d)(4), quoted at page 870 supra, does not override the impact of 11 U.S.C. § 362 (a).
discussed Cited as authority (rule) Goodman v. New York City Shoes, Inc. (In Re New York City Shoes, Inc.)
Bankr. E.D. Pa. · 1988 · confidence medium
See Santiago v. McElroy, 319 F.Supp. 284 (E.D.Pa.1970) (three-judge court) (rent distraint); and In re Adams, 65 B.R. 646, 649 (Bankr.E.D.Pa.1986); and Kuriger v. Cramer, 345 Pa.Super. 595 , 607-08 n. 14, 498 A.2d 1331 , 1337 n. 14 (1985) (self-help eviction).
discussed Cited as authority (rule) In Re Grant Broadcasting of Philadelphia, Inc.
Bankr. E.D. Pa. · 1987 · confidence medium
Other courts, e.g., In re Braniff Airways, Inc., 783 F.2d 1283, 1286 (5th Cir.1986); and In re Inn at Longshore, Inc., 32 B.R. 942 (Bankr.D.Conn.1983); and, on one occasion, we ourselves, in In re Adams, 65 B.R. 646, 646-49 (Bankr.E.D.Pa.1986), have implicitly refused to follow Sweetwater .
discussed Cited as authority (rule) In Re Clark
Bankr. E.D. Pa. · 1987 · confidence medium
As we stated most recently in In re Stranahan Gear Co., 67 B.R. 834, 836 (Bankr.E.D.Pa.1986), quoting no less authority than the United States Supreme Court: We must observe, as we did in our recent Opinion in In re Adams, 65 B.R. 646, 648 (Bankr.
discussed Cited as authority (rule) In Re Stranahan Gear Company, Inc.
Bankr. E.D. Pa. · 1986 · confidence medium
We must observe, as we did in our recent Opinion in In re Adams, 65 B.R. 646, 648 (Bankr.E.D.Pa.1986), that the automatic stay is “ ‘one of the most fundamental debtor protections provided by the bankruptcy laws,’ ” Midlantic National Bank v. New Jersey Department of Environmental Protection, — U.S. -, 106 S.Ct. 755, 761 , 88 L.Ed.2d 859, 867 (1986) (quoting S.Rep.
cited Cited "see" Anderson v. Elm Inn, Inc. (In Re Elm Inn, Inc.)
9th Cir. BAP · 1989 · signal: see · confidence high
See In re Adams, 65 B.R. 646 (Bankr.E.D.Pa.1986); In re Re-Trac Corp., 59 B.R. 251, 258 (Bankr.D.Minn.1986).
cited Cited "see" Grimes v. Munoz (In Re Munoz)
Bankr. E.D. Pa. · 1988 · signal: see · confidence high
See In re Adams, 65 B.R. 646 (Bankr.E.D.Pa.1986).
cited Cited "see" In Re Moore & White Co., Inc.
Bankr. E.D. Pa. · 1988 · signal: see · confidence high
See In re Adams, 65 B.R. 646 (Bankr.E.D.Pa.1986).
examined Cited "see" Sudler v. Chester Housing Authority (In Re Sudler) (3×) also: Cited "see, e.g."
Bankr. E.D. Pa. · 1987 · signal: see · confidence high
See Adams, supra, 65 B.R. at 649 .
cited Cited "see, e.g." In Re the Deli Den, LLC
Bankr. S.D. Florida · 2010 · signal: see also · confidence medium
In re Williams, 171 B.R. 420, 421 (Bankr.S.D.Ga.1994); see also In re Adams, 65 B.R. 646, 649 (Bankr.E.D.Pa.1986); In re Re-Trac Corp., 59 B.R. 251, 258 (Bankr.D.Minn.1986).
cited Cited "see, e.g." In Re C & C Tv & Appliance, Inc.
Bankr. E.D. Pa. · 1989 · signal: see, e.g. · confidence medium
See, e.g., In re Adams, 65 B.R. 646, 649-50 (Bankr.E.D.Pa.1986); and Lenair v. Campbell, 31 Pa.D. & C.3d 237 (Phila.Co.C.P.1984).
In Re Robert ADAMS D/B/A Press Graphics, Debtor
19-10768.
United States Bankruptcy Court, E.D. Pennsylvania.
Oct 8, 1986.
65 B.R. 646
Geri H. Gallagher, Norristown, Pa., Atty. for Moving Parties., Jack K. Miller, Suzanne J. Young, Law Clerk, Philadelphia, Pa., Attys. for Debtor., James J. O’Connell, Philadelphia, Pa., Trustee.
David A. Scholl.
Cited by 29 opinions  |  Published

OPINION

DAVID A. SCHOLL, Bankruptcy Judge.

Before the Court is a Motion by landlords requesting this Court to reconsider our previous Order requiring the landlords to restore electric service to the business premises of the tenant-debtor, unilaterally terminated by the landlords subsequent to the filing of this case, and to order the debtor to vacate the premises on the strength of the language of 11 U.S.C. § 365(d)(4), which states that a nonresidential lease, if deemed rejected, requires the debtor to “immediately surrender” this property. Because we believe that an order granting relief from the automatic stay, as well as a state court judgment for possession, must precede any eviction of any tenant, irrespective of the presence of 11 U.S.C. § 365(d)(4), and must precede as well the landlords’ taking any act to adversely affect the tenant’s leasehold inter[*647] est, such as termination of utility service, we shall deny this Motion.

On June 16, 1986, the Debtor filed the instant bankruptcy case under Chapter 18 of the Code. At the time of filing, the Debtor operated a business known as Press Graphics from a premises leased from Fred Schindler and Associates and Edward Bali-ban (referred to hereinbefore and hereinafter as “the landlords”) at 1752 Limekiln Pike, Dresher, Montgomery County, Pennsylvania. Not listed as creditors and unaware of the filing of the bankruptcy, and alleging non-payment of rent as a reason for doing so, the landlords unilaterally terminated the electric service to the premises on August 25, 1986.

On August 28, 1986, we conducted an expedited hearing on the Debtor's Application to Hold Creditor in Contempt, Impose Fees, and Assess Counsel Fees. The Debt- or, his Counsel, and Mr. Baliban pro se appeared. Mr. Baliban admitted that he had shut off the Debtor’s electric service as a means of attempting a self-help eviction, and that the Debtor’s Counsel had advised him of the bankruptcy filing and the illegality of his actions shortly after the termination of service, but that he had taken no action to restore that service. Since Mr. Baliban appeared to have acted due to a good faith misunderstanding of his rights, we declined to impose any penalties upon him, but merely directed that he restore the Debtor’s electric service by 4:00 P.M. that day. The landlords complied with that directive, and no further action has been taken by the Debtor on that matter.

On September 8,1986, the landlords filed the instant Motion. We granted their request for an expedited disposition, and ordered the matter for hearing on September 18, 1986. On that date, we denied the Debtor’s Motion for a Continuance, even though the Debtor accurately pointed out that service of the Motion had not been made on the Debtor himself, as required by Bankruptcy Rule 7004(b)(9) and Local Bankruptcy Rule 9014.1(d)(3).

At that hearing, the landlords argued that the presence of 11 U.S.C. § 365(d)(4), which states as follows, required this Court to reconsider and vacate its previous Order of August 28, 1986, and Order the Debtor to vacate the premises forthwith:

(4) Notwithstanding paragraphs (1) and (2), in a case under any chapter of this title, if the trustee does not assume or reject an unexpired lease of nonresidential real property under which the debtor is the lessee within 60 days after the date of the order for relief, or within such additional time as the court, for cause, within such 60-day period, fixes, then such lease is deemed rejected, and the trustee shall immediately surrender such nonresidential real property to the lessor.

After hearing arguments from Counsel for the Debtor and the landlords on September 18, 1986, we concluded that the lease in issue appeared to have been rejected by the Debtor by operation of § 365(d)(4). However, we observed that we believed that the automatic stay imposed by 11 U.S.C. § 362(a) barred the relief sought by the landlords irrespective of whether the lease had been rejected or not. We did allow the landlords until September 23, 1986, to submit a Brief on this issue, and the Debtor was allowed until September 30, 1986, to respond. We note that, on September 19, 1986, the landlords filed a Motion for Relief from the Automatic Stay, and that this Motion was scheduled for expedited disposition on October 2,1986, by Order of Chief Bankruptcy Judge Emil F. Goldhaber, but was continued by mutual agreement of the parties until October 8, 1986. It remains yet to be heard as of the date of this Opinion and Order. We also note that, on October 6,1986, the landlords filed a Reply Brief, which we have also considered.

We are not surprised to discover that the landlords cite no cases holding that a rejection of a lease per 11 U.S.C. § 365(d)(4) overrides the impact of the automatic stay, per 11 U.S.C. § 362(a). In fact, none of the cases cited by the landlords address the interplay between these sections of the Code at all. It is true that, in one case[*648] cited, In re Southwest Aircraft Services, Inc., 53 B.R. 805 (Bankr.C.D.Cal.1985), the Court, after dismissing the Debtor’s argument that it did not reject the lease, did order the Debtor there to immediately surrender the property to the landlord. However, in another authority cited by the landlords in purported support of their position, In re Mead, 28 B.R. 1000 (E.D.Pa.1983) (per Shapiro, D.J.), the Court, while agreeing that the lease in issue there was rejected, appears to recognize that the landlord must seek relief from the stay before proceeding to oust the tenant. See 28 B.R. 1001 and 1002 n. 2. The Debtor, in his Brief, cited In re Re-Trac Corp., 59 B.R. 251, 258 (Bankr.D.Minn.1986), where the Court expressly disapproved that aspect of the Southwest Aircraft Order directing the debtor to immediately surrender and vacate the leased premises, although the Re-Trac Court did proceed to modify the stay to allow the landlord to pursue its state law remedies to attempt to evict the debtor.

We believe that the result here is commanded by the numerous authorities for the principle that “the automatic stay is one of the most fundamental debtor protection devices provided by the [Bankruptcy] Code.” In re R.R.S., Inc., 7 B.R. 870, 872 (M.D.Fla.1980). So broad and so powerful is the scope of the automatic stay that it has been held that it attaches immediately, without the debtor’s even seeking same, In re Willis, 2 B.R. 643, 645 (W.D.Va.1980), and applies to informal as well as formal collection activities by the creditor. See In re Mimi’s of Atlanta, Inc., 5 B.R. 623, 627 (N.D.Ga.1980). The stay protects all property of the estate, and the term “estate” is broadly defined to include “all legal and equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a). That the stay, per 11 U.S.C. § 362(a)(3), applies to protect any possessory interest which the tenant has in real property as of the date of a bankruptcy filing, even if the landlord claims to have validly terminated the tenancy interest per applicable state law procedures, can scarcely, at this point, be doubted. See, e.g., In re Morales, 45 B.R. 314, 316 (Bankr.E.D.Pa.1985) (per Twardowski, B.J.), aff'd, Civil Action No. 85-1159 (E.D. Pa., Opinion dictated by Van Artsdalen, J., April 25, 1985); In re Gambogi, 20 B.R. 587, 590 (Bankr.D.R.I.1982); In re Lewis, 15 B.R. 643, 644-45 (E.D.Pa.1981) (per Goldhaber, Ch.B.J.); and Matter of Pickus, 8 B.R. 114, 118 (Bankr.D.Conn.1980).

The potential tension between 11 U.S.C. § 362 and 11 U.S.C. § 365, in a residential lease setting, was considered by the Court in In re Knight, 8 B.R. 925, 928-29 (Bankr.D.Md.1981). We totally agree with the statements in Knight, at 929, that “[t]he provisions of § 365 seem solely to contemplate contracts and leases arising in a commercial context or possibly ones which could produce income for the estate,” and that “the trustee’s rejection of a residential lease constitutes an abandonment of the estate’s interest in the lease to the Debt- or,” rather than paving the way to the tenant’s eviction. Therefore, if the lease in issue were a residential lease, we would clearly be inclined to rule that § 365 has no impact on the attempt of a landlord to dispossess a tenant.

This case, of course, involves a nonresidential lease, and therefore different consequences may ensue. However, we do note that, in reciting the legislative history of § 365(d)(4), the landlords quote Senator Hatch as explaining this provision as establishing a time-limitation upon which a nonresidential real estate lease can be assumed or rejected in a Chapter 11 or Chapter 13 case, similar to that in a Chapter 7 case. See 130 CONG.REC. S8891, S8894 (June 29, 1984); 11 U.S.C. § 365(d)(1). In.cases such as Lewis, supra, where it might have been argued that the lease was rejected, as per 11 U.S.C. § 365(d)(1), the Court never stopped to consider whether this factor affected the application of § 362(a). We believe, as a result, that many cases have impliedly rejected the reasoning suggested here by the landlords and employed by the Court in Southwest Aircraft. We therefore have no hesitancy in joining the Re-Trac Court in criticizing and refusing to follow Southwest Aircraft and rejecting[*649] the arguments of the landlords here that § 365(d)(4) constitutes an exception to the application of § 362(a).

One other aspect of the conduct and position of the landlords here demands our attention. The landlords have not alleged that they have at any time commenced any state court proceeding to evict the tenant, let alone obtained a judgment for possession against him. In arguing that the effect of § 365(d)(4) renders resort to state law unnecessary, the landlords seem to argue that self-help evictions and actions in furtherance of self-help evictions, such as the termination of a tenant’s electric service, are perfectly proper under the laws of this state.

We have already expressed our view that § 365(d)(4) does not supersede § 362(a) of the Code. If it did not already follow of necessity from that conclusion, we also state that it is inconceivable that Congress would intend to place in the Bankruptcy Code a provision which would allow creditors to short-circuit established state law landlord-tenant procedures to the detriment of debtors. That result would follow, however, if we interpreted § 365(d)(4) in such a way as to allow the landlords to immediately dispossess the debtor here. Thus, we emphasize, as did the Court in Re-Trac, supra, that effect of a rejection of a lease per § 365(d)(4), even if followed by a granting of relief from the automatic stay per § 362(a), merely places the creditor in a position to pursue remedies under the state law of landlord and tenant to obtain possession of the premises.

In their Brief, the landlords point to the delays attendant in the State landlord-tenant process if they are required to follow it. However, our answer is that those delays, having been made a part of the Pennsylvania Landlord and Tenant Act, 68 P.S. § 250.101. et seq., cannot be avoided. Surely, the tenant’s filing of a bankruptcy should not allow a landlord to avoid them.

The landlords, per Mr. Baliban at the hearing on August 28, 1986, and even in their Brief in support of the Motion at bar, allege that, without knowledge of the bankruptcy filing and also without first obtaining any judgment for possession, they reacted by unilaterally shutting off the tenant’s electric service. If he was unaware of the bankruptcy filing, it follows that Mr. Baliban had no reason to conclude that 11 U.S.C. § 365(d)(4) allowed him to take such actions in furtherance of a self-help eviction. Therefore, his conduct was totally without justification unless the landlords can plausibly argue that Pennsylvania law sanctions self-help evictions.

We must state, as strongly as we can do so, that we do not believe that the law of Pennsylvania sanctions self-help eviction, and in fact we believe this law to be quite to the contrary. Our authority for this conclusion and the principle that the Landlord and Tenant Act constitutes the sole means by which a landlord can legally dispossess a tenant are the following authorities: Kuriger v. Cramer, 345 Pa.Super. 595, 607-08 n. 14, 498 A.2d 1331, 1337 n. 14 (1985); Pollack v. Morelli, 245 Pa.Super. 388, 392-93, 369 A.2d 458, 460-61 (1976); Stein v. McGinley, 123 Pa.Super. 122, 127, 186 A. 231, 233 (1936); and Wofford v. Vavreck, 22 D & C.3d 444, 450-52 (Crawford Co.C.P.1981). We have no doubt that shutting off the utilities of a tenant is among the self-help remedies which the Pennsylvania courts would strongly condemn. See, e.g., Smiley v. Cardin, 655 S.W.2d 114 (Mo.App.1983) (tenant awarded $600.00 compensatory damages and $10,000.00 punitive damages against landlord who removed appliances); Hutchins v. Novay, NO. GD 26159 of 1975 (Alleg.Co.Pa., C.P., Opinion and Order filed June 7, 1977) (tenants subjected to removal of doors, windows, and utility termination awarded over $5,000.00 damages). We therefore emphasize that the landlords’ conduct in shutting off the tenant’s electric service was totally illegal, and our mere direction that this service be restored was the mildest possible sanction.

The touchstones of bankruptcy proceedings are that the debtor receive a “breathing spell” after the filing and that, if distri-[*650] button of his assets is the only sensible resolution, that such distribution take place in an orderly fashion, in which all creditors whose interests may be impaired, including landlords, are treated equally and without preference. Self-help actions by creditors, particularly creditors so critical to debtors’ well-being as landlords of realty used by debtors as their residence or the source of their livelihood, are anathema to this concept. Such actions therefore cannot be permitted, and this Court must take great pains to emphasize that it will deal swiftly and firmly with such conduct. For this reason, we shall not vacate our Order of August 28, 1986, but shall instead soundly reaffirm it.

For all of the reasons set forth herein, we are constrained to deny the landlords’ Motion, and will do so in an accompanying Order.