In Re: Baruch Lichtenstein

Filing 9

OPINION AND ORDER re: 1 Bankruptcy Appeal, filed by Baruch Lichtenstein.... For all of the foregoing reasons, the order of the Bankruptcy Court us affirmed and the appeal is denied. (Signed by Judge William C. Conner on 3/31/09) (fk) (Additional attachment(s) added on 3/31/2009: # 1 Opinion and Order) (fk).

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK --------------------X : In re: : BARUCH LICHTENSTEIN, : Debtor. : --------------------X : BARUCH LICHTENSTEIN, : Appellant, : - against : COHEN & SLAMOWITZ, LLP, : Appellee. : --------------------X APPEARANCES:

Chapter 7 Bankruptcy Court Case No. 07 B 36617 (CJM)

08 Civ. 0261 (WCC) ECF CASE

OPINION AND ORDER

LAW OFFICE OF SHMUEL KLEIN, PC Attorneys for Appellant 268 Route 59 West Spring Valley, New York 10977 SHMUEL KLEIN, ESQ. Of Counsel LAW OFFICES OF MICHAEL G. Mc AULIFFE Attorneys for Appellee 48 South Service Road, Suite 102 Melville, New York 11747 MICHAEL G. Mc AULIFFE, ESQ. Of Counsel
C o p i e s E-Mailed to Counsel of Record

CONNER, Senior D.J.: Appellant Baruch Lichtenstein (the "Debtor/Appellant") appeals from an order of U.S. Bankruptcy Judge Cecelia G. Morris, denying Debtor/Appellant's motion for sanctions and attorney's fees for alleged willful violation of 11 U.S.C. § 362 by Capital One Bank ("Capital One") and Cohen & Slamowitz, LLP ("C&S" and, together with Capital One, "Appellees"). Debtor/Appellant argues that the Bankruptcy Court abused its discretion in denying his motion to impose sanctions for Appellees' allegedly willful violation of the automatic stay imposed under 11 U.S.C. § 362. For the following reasons, the Bankruptcy Court's order is affirmed.

BACKGROUND Debtor/Appellant filed a bankruptcy petition on October 16, 2007. (Appellant Br. at 3.) On October 18, 2007, the Court Clerk of the Bankruptcy Court sent to Capital One an electronic notice of the bankruptcy filing and a message that, pursuant to 11 U.S.C. § 362, an automatic stay prohibited any further collection efforts. (Id.) Debtor/Appellant alleges that notice of the bankruptcy filing was mailed to C&S on October 19, 2007. (Id.) Debtor/Appellant states that he received a bill dated October 24, 2007 from C&S, on behalf of Capital One, seeking to collect a pre-petition debt.1 (Id. at 4.) C&S avers that it did not receive notice of the bankruptcy filing and resulting automatic stay until October 25, 2007, when it received notice of the bankruptcy filing electronically, from Capital One. (Appellees Br. at 3.) Debtor/Appellant filed a motion for sanctions against C&S on November 6, 2007 (Appellant

C&S state that, on October 24, 2007, it mailed a "summons and complaint" arising out of money owed to Capital One. (Appellees Br. at 3.) 1

1

Br. at 4), alleging that the October 24, 2007 bill sent by C&S constitutes a willful violation of the automatic stay imposed under 11 U.S.C. § 362. (Appellees Br. at 3.) On November 27, 2007, the Bankruptcy Court held a hearing on Debtor/Appellant's motion. (Appellant Br. at 4). During that hearing, the court found that Debtor/Appellant had not suffered any "actual damages" due to the letter that C&S sent and that C&S's mailing of a letter that said "`[h]ere is a copy of a summons and complaint that we will file" was not a willful violation of the automatic stay. (Appellant App'x at 112-15.) Based on those findings, the Bankruptcy Court denied Debtor/Appellant's motion for sanctions.

DISCUSSION We review a bankruptcy court's conclusions of law de novo. See In re Colonial Realty Co., 980 F.2d 125, 130 (2d Cir. 1992); In re Peters, 133 B.R. 291, 294 (S.D.N.Y. 1991). We must accept the Bankruptcy Court's findings of fact unless they are clearly erroneous, and give "due regard . . . to the opportunity of the bankruptcy court to judge the credibility of the witnesses." FED. R. BANKR. P. 8013; see also In re Ionosphere Clubs, Inc., 922 F.2d 984, 988 (2d Cir. 1990); In re Manville Forest Prods. Corp., 896 F.2d 1384, 1388 (2d Cir. 1990). 11 U.S.C. § 362(k)(1) provides, in pertinent part, that: "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." The automatic stay provision "is effective at the moment the petition is filed and defendant's knowledge is immaterial to a determination of