Lyndel Toppin is an elderly disabled man whose Property was sold at tax sale due to $1,900 in delinquent real estate taxes. Lyndel filed a Chapter 13 bankruptcy petition on May 8, 2018, and The Sheriff of the City of Philadelphia received notice of the Petition the same day.
Despite notice, the Sheriff’s Office violated the automatic stay by taking post-petition actions violating the stay.
On May 10, 2018, an officer with the Civil Enforcement Unit of the Sheriff’s Office went to the Property to serve a Notice to Vacate, giving the occupants of the Property 21 days to vacate the Property before an eviction notice would be issued.
On June 1, 2018, an officer of the Sheriff’s Office returned to the Property to serve an Eviction Notice ordering the occupants of the Property to vacate it by June 25, 2018.
Lyndel filed a Complaint against Jewell Williams on June 11, 2018, in his capacity as Sheriff of the City of Philadelphia, alleging that the Sheriff’s Office violated the automatic stay imposed by 11 U.S.C. §362 of the Bankruptcy Code.
The Bankruptcy Court held a trial on August 21, 2020. The Sheriff’s Office acknowledged that it received notice on May 8, 2018, and Lyndel established a willful violation of the stay by the Sheriff’s Office. Unfortunately, Lyndel could not establish an actual injury by a preponderance of the evidence, partly because he was both deaf and mute and lacked the financial resources to seek medical treatment to substantiate the underlying emotional distress. Lyndel timely appealed the adverse decision, and the District Court affirmed the Bankruptcy Court’s decision on November 3, 2022. Toppin v. Sheriff of the City of Philadelphia, Case No.: 2:21-cv-5144-WB (ED. Pa. November 3, 2022).
Key Takeaways for the Debtor’s Bar:
1. Sheriff’s Office is not entitled to sovereign immunity or quasi-judicial immunity when it violates the automatic stay.
2. In bankruptcy suits litigating automatic stay violations, the state is deemed to have waived sovereign immunity. In re Venco LLC, 998 F. 3d 94, 104 (3d Cir. 2021)
3. The Sheriff is not protected by quasi-judicial immunity in connection with a willful stay violation. Toppin v. Sheriff of the City of Philadelphia, Case No.: 2:21-cv-5144-WB (ED. Pa. November 3, 2022); Russel v. Richardson, 905 F. 3d 239, 247 (3d Cir. 2018)
4. In ratifying the Bankruptcy Clause, the States acquiesced in a subordination of whatever sovereign immunity they might have asserted in proceedings necessary to effectuate the in rem jurisdiction of the bankruptcy courts. Cent. Virginia City. Coll. v. Katz, 546 U.S. 356, 378 (2006).
5. Litigation claiming damages for automatic stay violations “facilitate the in rem proceedings which form the foundation of bankruptcy.” In re Toppin, 637 B.R. 88 at 104.
6. The Third Circuit concluded that emotional distress damages are ‘actual damages” under §362(k). Toppin v. Sheriff of the City of Philadelphia, Case No.: 2:21-cv-5144-WB (ED. Pa. November 3, 2022); In re Lansaw, 853 F.3d 657, 667 (3d. Cir. 2017).
7. The Sheriff is not protected by sovereign immunity against a debtor’s claim for emotional distress damages. Emotional damages are available for automatic stay violations. In re Lansaw, 853 F.3d 657, 667 (3d. Cir. 2017).