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MORAN LAW GROUP, INC. CATHLEEN COOPER MORAN, I.D. #83758 RENÉE C. MENDOZA, I.D. #139939 1674 N. Shoreline Blvd. Suite 140 Mountain View, CA 94043 Tel.: (650) 694-4700 Fax: (650) 694-4818

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Attorney for Debtor

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UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, DIVISION 3

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In Re:

) ) ROBERT C. THOMAS ) ) ) ) ) ) Debtor. ) ________________________________ )

Chapter 13 Bankruptcy No. 05-31615 Date: April 28, 2006 Time: 10:00 am Place: 22nd Floor HON. DENNIS MONTALI

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MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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The Debtor moves the court for an award of damages against the City and County

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of San Francisco; the State of California agencies Franchise Tax Board and Department

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of Motor Vehicles; and LDC Collections for violations of the automatic stay. The

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gravamen of the motion is that the City refused, post petition, to turn over to the debtor

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his towed car until he paid outstanding prepetition parking tickets, denying him the use of

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his car for several weeks. Thereafter, after having obtained possession of his car, he was

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denied a parking permit on account of the same outstanding prepetition parking fines and

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thereby accrued more fines and endured collection efforts by LDC; had the registration of

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his van conditioned on payment of prepetition fees and, most recently. the Franchise Tax

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Board has threatened collection action on account of delinquent registration.

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The debtor initially filed a motion for contempt against the City and County of San MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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Francisco and served it on various city departments while his car was being held; he

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amended the motion having recovered the car; it was withdrawn when he retained counsel

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so that it could be redrafted to assert the debtor’s right to damages for the stay violations.

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Unfortunately, the City has proceeded, utterly undeterred, to hound the debtor with

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respect to unpaid, prepetition obligations.

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FACTS On May 20, 2005, the debtor’s car was towed from Oak St. between Filmore and

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Webster for being illegally parked. There is no dispute that the parking was improper and

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that the City was entitled to tow the car.

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On May 23, the debtor filed bankruptcy in pro per, listing the City and

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County of San Francisco and the Franchise Tax Board as creditors. The court duly

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gave notice to those entities of the filing. The debtor hand-carried notice of the

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filing and of the case number to the San Francisco Department of Parking and

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Traffic (“DPT”) and to the towing company SF Auto Return on May 23. Debtor

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spoke with several employees of DPT, including Assistant Director of the Hearing

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Division Mike Hanrahan. Debtor was told that City would not release the car

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without payment of the outstanding fines and that the only relief the City offered

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was to schedule a Towing Hearing.

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Later that evening or the following day, Mr. Hanrahan sent an email to the

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Debtor, acknowledging that the vehicle was being held “to compel payment of the

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$1335" in outstanding fines. (Motion for Contempt, filed May 31, 2005, attachment

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5.) The debtor appeared at a Towing Hearing conducted by the City on May 25

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which resulted in a determination that the initial tow was justified; the City retained

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possession of the vehicle.

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The Debtor drafted and mailed to DPT his motion to this court for contempt

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of the automatic stay, mailing a copy to the City Attorney’s Office and the Chapter

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13 trustee.

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The debtor experienced anxiety and stress as a result of the continued MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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withholding of his car and the utter indifference of the City to the automatic stay.

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His doctor prescribed sleeping pills. He was without access to his car.

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On May 31, 2005, the Debtor contacted the towing company and was told

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that the hold on the vehicle had been lifted but that the towing company was

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contacting the trustee about the turn over of the vehicle, since the Bankruptcy Code

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provided that property seized prepetition was to be turned over to the trustee.

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A week later, on June 7, Adam Barasch, counsel to the chapter 13 trustee,

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sent an email to Debtor and SF Auto Return indicating no objection by the trustee

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to the return of the vehicle to the debtor. On June 8th, the tow company informed

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the Debtor that he could retrieve his car only if he first goes to the Hall of Justice

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and signs a release drafted by the City Attorney’s office. The Debtor, feeling he

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has no choice in the matter, signs the documents and at 5 p.m. on June 8, recovers

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his car.

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On June 16, 2005, Debtor applies for a parking permit, since he lives in a

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neighborhood in which residents must have a parking permit, and is denied a permit

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because of the outstanding fines. His attempts to point out to the relevant City

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authorities that the unpaid fines are all prepetition and included in his Chapter 13

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fall on [wilfully] deaf ears.

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Without a valid parking permit, the debtor must move his car every two

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hours upon pain of a parking ticket. He got parking tickets, which the City refused

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to acknowledge were the product of the City’s unlawful refusal to issue a parking

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permit.

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In a snowballing of consequences of the City’s attempts to collect the

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prepetition fines, he Department of Motor Vehicles refuses to renew the

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registration of the vehicle without payment of the prepetition fines; the car is cited

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for being parked on the street without valid registration, capped off by the

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Franchise Tax Board threatening garnishment, levy and seizure to collect the pre

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and post petition fines. MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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LEGAL ANALYSIS A.

Automatic stay applies to City

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Section 362 stays actions to collect a debt. While § 362(b) enumerates

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certain actions that are outside the scope of the stay , such as enforcement of child

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support or the police powers for the public welfare, but when the purpose of the

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governmental action is to further the pecuniary interests of the state rather than the

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public health and safety, the state is enjoined by the automatic stay from

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continuance of its actions to coerce payment. Dunbar, 235 B.R. 465, 471, affirmed

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245 F.3d 1058 (9th Cir. 2001)

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B.

Retaining possession of car to coerce payment of prepetition debts

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violates the stay

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A creditor, with knowledge of the stay, has affirmative duty to act terminate

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ongoing violations of the automatic stay, ( Eskanos , 309 F.3d 1210 (9th Cir. 2002)

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since knowing retention of property of the estate violates the stay. In re Del

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Mission Limited: SBOE v. Taxel, 98 F.3d 1147, 1151 (9th Cir. 1996). There can be

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no doubt that the City, its agencies and the State, in the person of the Franchise Tax

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Board, had knowledge of the commencment of the case. The court gave such

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notice; the debtor, repeatedly, gave such notice.

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C.

Sovereign immunity does not protect City from damages for violating

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stay

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The City is not entitled to sovereign immunity. § 106 provides that

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sovereign immunity is abrogated as to states and municipalities with respect to

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§362, among others. The recent Supreme Court decision in Hood v. Tennessee

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Student Aid confirmed that the states were bound to recognize the bankruptcy

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discharge, claims of sovereign immunity notwithstanding. See also Krystal

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Energy Co. v. Nation, 357 F.3d 1055, 1057 (9th Cir. 2004) as amended, 2004 U.S.

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App. LEXIS 6488 (9th Cir. Ariz. Apr. 6, 2004) .

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D.

Stay prohibits City from denying parking permit because of non

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payment of fines

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The closest analogy in the cases to the City’s denial of a parking permit to

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the Debtor on account of the prepetition parking citations is to those cases

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involving the state’s suspension of a debtor’s drivers license on account of an

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unpaid debt. The courts have been consistent, if not unanimous, that the state or its

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subdivisions cannot deny a debtor a driver’s license because of a pending

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bankruptcy case in which the debt may be discharged . Neither can it refuse to

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issue or renew a license for non payment of a discharged debt. Perez v. Campbell,

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402 U.S. 637 (1971) held that a state statute prohibiting the issuance of a drivers’

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license to a debtor who had discharged a debt that would disqualify a non debtor

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from holding a license violated the supremacy clause. Young, 10 B.R. 17 (S.D.CA

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Bankr. 1980) (Chapter 13 debtor entitled to renewal of drivers license during

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pendency of case despite outstanding obligation on a traffic citation); Smith v.

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Pennsylvania DOT , 66 B.R. 244 (D. ED PA 1986) (state could not deny driver’s

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license to Chapter 13 debtor pursuant to §525.)

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Colon , 102 B.R. 421 (E.D. PA 1989) contains a thoughtful discussion of

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rights of governmental powers and the interplay with bankruptcy stay, concluding,

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“[c]ourt and Department of Transportation defendants erroneously believed that the

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debtors' bankruptcy filings were irrelevant in restricting these collection activities. I

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therefore conclude that the defendants' postpetition activities violated the provisions

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of § 362(a)(1), (6).” Colon at 429.

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The City’s refusal to issue a parking permit required to park in the

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neighborhood in which the debtor lives was premised on the outstanding and

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unpaid tickets. Failure to have a valid parking permit has created a cascading series

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of infractions, expenses, and major inconveniences.

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The City apparently referred the matter of the unpaid prepetition parking tickets to LDC Collections who has sent the debtor at least four collection letters MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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since the commencement of the case.

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The City then enlisted the DMV in its collection activities, resulting in the

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DMV’s refusal to permit renewal of the registration on the vehicle without payment

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of the prepetition tickets. The matter was compounded when the DPT ticketed the

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vehicle when otherwise lawfully parked on the street for being unregistered.

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E.

Stay prohibits DMV from denying vehicle registration renewal because

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of non payment of fines

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The authority cited above equally prohibits the State of California and its

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DMV from refusing to register the debtor’s vehicle on account of unpaid

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prepetition parking tickets when the purposes is clearly to coerce payment of a

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prepetition debt. Damages

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Section 362(k)(1) provides that the court shall award an individual his costs

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and attorneys fees, in addition to actual damages. An award of punitive damages is

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available under appropriate circumstances.

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The debtor’s damages include his out of pocket expenses associated with

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trying to retrieve his car; his expenses associated with the filing of this motion,

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including attorneys fees, copy and mailing costs; his time spent interacting with the

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City and DMV; the loss of use of his vehicle; etc. The debtor lost precious time

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from his personal and professional life, and suffered interuption, annoyance and

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continuing anxiety as he tried to complete his PhD. and keep possesion of his car.

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The City’s actions in continuing to hold the car post petition, and

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conditioning its return on a list of alleged prerequistes to recover the car, interferred

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with the debtor’s timely completion of his teaching responsibilities at Vista

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College.

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The debtor was required to seek medical treatment for the stress occasioned by the post petition disputes with the City, worsening a pre existing condition. The court, in considering an award of damages, should consider the callous MOTION FOR DAMAGES FOR VIOLATION OF THE AUTOMATIC STAY

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abuse of power by the agencies involved, who have consistently used their clout as

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“government” to frustrate the debtor’s enjoyment of the protection he is entitled to

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under the Bankruptcy Code. It is significant that despite an abundance of notice of

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the bankruptcy, and debtor’s repeated efforts to draw it to their attention as it

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impacts the debtor and his vehicle, from top to bottom of the DPT has remained

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absolutely indifferent to the pendency of the Chapter 13. At no point to date has

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any agency had the grace to say “oops, we goofed” and taken action to make things

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right. They plow on, as though inconvenient federal laws don’t apply to them.

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Since actions taken in violation of the automatic stay are void, the court is

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urged to find that each and every parking fine and penalty asserted by the City and

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County and/or the Department of Motor Vehicles after the commencement of the

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case, is void as being, at heart, based on non payment of prepetition parking tickets.

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If comity precludes the court from invalidating actions of the City or State, then the

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court is requested to award, as an element of damages for violation of the stay, an

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amount equal to the post petition files and penalties imposed by the City and/or the

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State.

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MORAN LAW GROUP

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Date: ________________

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/s/ Cathleen Cooper Moran

_______________________________________ CATHLEEN COOPER MORAN Attorney for Robert Thomas

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