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In re Atlantic Business and Community Corp.

filed: April 18, 1990.

IN RE: ATLANTIC BUSINESS AND COMMUNITY CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, DEBTOR, JAMES CUFFEE
v.
ATLANTIC BUSINESS AND COMMUNITY DEVELOPMENT CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, JAMES E. CUFFEE, APPELLANT



On Appeal from the United States District Court for the District of New Jersey (Camden), D.C. Civil No. 88-4468.

Higginbotham, Chief Judge, Hutchinson and Cowen, Circuit Judges.

Author: Cowen

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 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 ...


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