United States District Court, E.D. Pennsylvania
IN RE MARKEL STEVEN DUNN, Debtor.
MARKEL STEVEN DUNN, Appellee. TOYOTA MOTOR CREDIT CORP., Appellant,
F. LEESON, JR. UNITED STATES DISTRICT JUDGE
this Court is an appeal by Appellant-Creditor, Toyota Motor
Credit, from the Order of the United States Bankruptcy Court
for the Eastern District of Pennsylvania dated October 3,
2017. In that Order, the Bankruptcy Court granted the Motion
for Sanctions for Violation of Automatic Stay filed by
Appellee-Debtor, Markel Steven Dunn, because Toyota
repossessed Dunn's vehicle prior to the expiration of
time for Dunn to reaffirm the debt. Because this Court agrees
with the Bankruptcy Court that Toyota wrongfully repossessed
the Land Rover only sixteen days into the thirty days
allotted to Dunn to perform his stated intention, the
Bankruptcy Court's Order is affirmed.
personal property at issue is a Toyota Land Rover, which acts
as collateral for a loan from Toyota to Dunn. See
Order of Oct. 3, 2017, ¶ 1(a), ECF No. 2-1.
12, 2017, Dunn filed his initial bankruptcy petition under
Chapter 7. Id.; Petition, ECF No. 2-2. Along with
that petition, he filed a statement of intention, which
indicated that his intent with respect to the Land Rover was
to “Retain - Debtors [sic] will continue to make
payments.” Id.; Stmt Intention, ECF No. 2-2.
The Bankruptcy Court found that Dunn's statement:
“will continue to make payments” meant he wanted
to retain the Land Rover and would attempt to reaffirm the
debt. See Order of Oct. 3, 2017, ¶ 7(c) n.2,
¶ 12(c) n.6. The court, guided by the “fresh
start” the Bankruptcy Code is intended to provide a
debtor, reasoned that the language constituted a
reaffirmation because it did not sound in either surrender or
redemption. See Id. and ¶ 15.
first date for the meeting of creditors was set for August 2,
2017. See Order of Oct. 3, 2017, ¶ 1(b).
Sixteen days after that date, on August 18, 2017, Toyota
repossessed the Land Rover. Id. ¶ 1(c). Dunn
moved for sanctions against Toyota for violation of the
automatic stay. Id. at 1; 11 U.S.C. § 362(a).
The Bankruptcy Court found that Dunn timely complied with
§ 521(a)(2)(A) and could have fulfilled his intention to
reaffirm in compliance with § 521(a)(2)(B), but Toyota
made it impossible by repossessing the Land Rover only
sixteen days later. Id. ¶¶ 7(a)-(d),
9-10. The court concluded that § 362(h)(1)
did not provide Toyota relief from the automatic stay and,
therefore, Toyota was not within its rights to repossess the
vehicle on August 18, 2017. Id. ¶¶
7(c)-(d), 14, 16.
appeals the Order for sanctions entered against it. On
appeal, Toyota argues, inter alia, Dunn did not
timely file a statement of intention with respect to the Land
Rover because his statement that he “will continue to
make payments” did not indicate either an intent to
redeem or to reaffirm the debt. Toyota asserts, instead, Dunn
elected the “ride-through” option, but that
option was eliminated by the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (“BAPCPA”), Pub.
L. No. 109-8, 119 Stat. 23. Accordingly, Toyota contends that
Dunn failed to timely file the required statement of
intention and that the automatic stay had terminated pursuant
to 11 U.S.C. § 362(h).
STANDARD OF REVIEW
appeal, a district court reviews a bankruptcy court's
findings of fact applying a “clearly erroneous”
standard of review. See Am. Flint Glass Workers Union v.
Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir. 1999).
A district court reviews the bankruptcy court's legal
determinations de novo. See Sovereign Bank v.
Schwab, 414 F.3d 450, 452 (3d Cir. 2005); J.P. Fyfe,
Inc. v. Bradco Supply Corp., 891 F.2d 66, 69 (3d Cir.
Statement of Intention, 11 U.S.C. § 521(a)(2)
11 of the United States Code sets forth the procedure for
filing bankruptcy. See generally 11 U.S.C.
§§ 101-1532. Specifically, § 521 of Title 11
provides the “Debtor's duties” with respect
to filing for bankruptcy. See Id. § 521.
individual files for bankruptcy and his or her
“schedule of assets and liabilities includes debts
which are secured by property of the estate . . . [, ]”
a debtor must take action to file a “statement of
intention” with respect to the secured property. 11
U.S.C. § 521(a)(2)(A). The debtor has “thirty days
after the date of the filing of the petition under chapter 7
. . . or on or before the date of the meeting of the
creditors, whichever is earlier . . .” to file his
statement of intention. Id. The statement must
specify the debtor's “intention with respect to the
retention or surrender of such property and, if applicable,