Bankruptcy – Automatic Stay – Post-Petition Contract – Vehicle Fuel

In re Construction Supervision Services, Inc. (Lawyers Weekly No. 12-05-1011, 7 pp.) (Randy D. Doub, J.) 12-00569-8; E.B.N.C.

Holding: Even though the creditor did not realize that the automatic stay applies to post-petition contracts, the creditor willfully violated the automatic stay when it disabled the debtor’s fuel pumps because of the debtor’s failure to pay at the usual time.

The court grants debtor’s motion for sanctions for violation of the automatic stay.

The fuel in the tanks became property of the estate as the debtor acquired an interest in the fuel after the commencement of the case pursuant to 11 U.S.C. § 541(a)(7). Further, the creditor’s principal testified that, if payment was not received, the creditor would have attempted to pump the fuel out of the tanks, evidence of an intent to exercise control over or obtain possession of property of the bankruptcy estate. Therefore, the court finds the creditor’s actions were willful violations of the automatic stay.

Where a creditor is uncertain about the scope of the automatic stay, he takes the risk of being assessed for damages if he fails to obtain clarification from the bankruptcy court. By disabling the fuel pumps, the creditor achieved the exact result it intended: to limit the debtor’s ability to use the fuel. Therefore, regardless of whether the creditor knew the automatic stay applied to post-petition property of the estate, its actions were willful violations of the state, and no privilege will be allowed for its ignorance.

Since the creditor took prompt action to remedy the violation of the automatic stay, which limited the debtor’s damages, the debtor is awarded sanctions of only $500. Additionally, the debtor’s attorney is entitled to attorneys’ fees of $1,000 for filing and prosecution the motion. The sanctions and fees shall offset the creditor’s administrative expense claim of $29,559.43.