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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

In re: BENJAMIN M. BRUNDAGE :

Debtor :

: CIVIL ACTION

BENJAMIN M. BRUNDAGE, :

Plaintiff, Appellee : 

and Cross-Appellant :

:

v. : NOs. 05-2310 & 05-2406

:

HELEN WAITE, :

Defendant, Appellant :

and Cross-Appellee :

Stengel, J. September 9, 2005

MEMORANDUM

This bankruptcy appeal involves a misapplication of basic contract law and a

conscious choice, by Helen Waite as creditor, to ignore the stay on state court litigation

while Mr. Brundage’s bankruptcy was pending. Ms. Waite’s appeal is unencumbered by

references to applicable law or reference to the record, and is without any merit.

I. Background 

On June 16, 2000, Helen Waite and Benjamin Brundage entered into an agreement

for Waite to purchase the now-disputed property at 1905 N. 63rd Street, Philadelphia,

from Brundage for $45,000. The agreement was entitled “Offer to Purchase Real Estate.” 

The Offer stated that the parties would “execute a standard purchase and sales agreement

on the terms contained within 45-60 days” and that the “closing shall be on or before

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It is uncontested that Waite was notified of both bankruptcies.

2As of the date of this Order, the bankruptcy discharge has not yet been filed by the

Bankruptcy Court. Nonetheless, even if it had been, the Bankruptcy Code requires that the stay

of any action against a property subject to the bankruptcy continues until that property is no

longer property of the estate. 11 U.S.C. §362(c).

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August 1, 2000.” See Bankr. Dec. at 2. Brundage accepted $2,000 as a deposit. 

Settlement, however, did not occur. On September 11, 2000, Brundage filed a

bankruptcy petition. On September 12, 2000, Waite sent Brundage a letter proposing a

September 29, 2000 closing date. The letter listed a purchase price of $35,000. Brundage

gave the letter to his attorney, never responded to Waite, never signed a sales agreement

and never attended a closing of the “sale.” On February 20, 2001, Waite filed two

secured claims, each in the amount of $2,000, in Brundage’s bankruptcy. On April 9,

2001, Brundage’s first bankruptcy was converted from Chapter 13 to Chapter 7, and on

August 7, 2001, his debts were discharged. 

Brundage filed a second bankruptcy on December 1, 2001. In that bankruptcy,

Brundage listed Waite as an unsecured, nonpriority creditor.1 The Chapter 13 plan was

confirmed on February 25, 2003.2

On March 6, 2003, Waite filed a complaint against Brundage in Philadelphia

County Common Pleas Court (March 2003, No. 772), seeking specific performance of the

real estate transaction. On April 25, 2003, Brundage’s attorney wrote to Waite’s attorney

advising that the lawsuit was in violation of the bankruptcy stay. On June 26, 2003,

another letter was sent, advising Waite that the state court action should be withdrawn. A

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third letter was sent on July 18, 2003, advising Waite’s new attorney that the lawsuit was

in violation of the bankruptcy stay and should be withdrawn. Despite ample notice of the

bankruptcy itself, as well as the stay, Waite still has not withdrawn her state court action. 

Thus, on July 28, 2003, Brundage filed an adversary suit in Bankruptcy Court seeking an

Order discontinuing the State Court action. 

In a well reasoned, thorough opinion, The Honorable Kevin J. Carey, Bankruptcy

Judge, found that (1) the plain language of the Offer was not a valid agreement of sale;

(2) even if the court were to assume that the Offer was valid, the Offer was rejected in

Brundage’s first bankruptcy; and (3) even if the court were to find that the Offer

somehow survived the first bankruptcy, Brundage still held legal title to the property upon

filing his second bankruptcy, therefore the property was the property of the bankruptcy

estate and subject to the bankruptcy stay. The Bankruptcy Court found, as I do, that

Waite’s arguments are meritless and entered judgment in favor of Brundage. Waite was

ordered to discontinue the state court action and to pay Brundage $5,547.00. Rather than

withdraw the state court action, Waite filed the instant bankruptcy court appeal. I will

deny the appeal and order Waite to pay damages to Brundage. 

II. Parties’ Positions

A. On appeal

In a unique application of real estate contract law, Waite argues that, upon her

tender of the $2,000 deposit, the property became hers, was no longer Brundage’s, and

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 Waite also argues that as the title for the property is rightfully hers, the only viable

action remaining is for Brundage to sue for the remainder of the $45,000 owed, which would not

be stayed by the bankruptcy proceedings.

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was therefore outside of the bankruptcy estate. She contends that the disputed property

was not subject to the bankruptcy stay, and the state court proceeding was proper.3 This

approach is wrong and wrong-headed.

Waite also argues, with no support, that Brundage failed to introduce evidence to

the bankruptcy court sufficient to support the attorney’s fees awarded. Finally, Waite

inexplicably posits that the anticipated Order of Discharge issued by the bankruptcy court

will remove the bankruptcy court’s jurisdiction and therefore moots any argument that the

common pleas action violates the automatic stay.

In response, Brundage argues that an agreement of sale is only enforceable within

a reasonable period of time. As Waite waited 3 years to bring this action, Brundage

argues that Waite therefore abandoned her claim to the property. In the alternative,

Brundage argues that even if the Offer were still valid at the time that Brundage filed his

first (or second) bankruptcy, any claims on that Offer were extinguished by the rejection

of the Offer as an executory contract, as well as the discharge of Waite’s claim for the

$2000 deposit. As to the attorney’s fees claim, Brundage points to, and attaches,

attorney’s bills that were submitted to the bankruptcy court. Finally, with regard to

Waite’s argument that any objections raised pursuant to the automatic stay are moot,

Brundage notes that the discharge has not yet been filed and in any case, the stay was in

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4Neither party substantively addressed standard of review in their brief. Appellee/CrossAppellant Brundage notes, incorrectly, that the standard of review is “whether evidence on the

record supports the factual findings of the trial court,” and “whether the trial court committed

errors of law.” Appellant/Cross-Appellee Waite blithely states that she agrees with that Standard

of Review. Neither party cites to any statute or case law.

5With deference to the well reasoned findings of the Bankruptcy Judge, I will consider

this “agreement” to be an executory contract. In fact, the “Offer to Purchase Real Estate”might

be exactly what it claims to be: an offer. There is absolutely no evidence that Brundage ever

“accepted” the offer. To the contrary, he offered to return the $2,000 to Waite subsequent to the

agreement. 

In light of Waite’s refusal to accept the check back, Brundage cashed it. Waite, then,

could have initiated a tort claim for conversion of her $2,000. Of course, had this claim been

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effect when the state court case was filed and the bankruptcy court retains jurisdiction to

enforce the Order it issued in April of this year.

B. On Cross-Appeal

Brundage argues that the Bankruptcy Court improperly found that his request for

treble damages was preempted by the Bankruptcy Code. Waite did not respond to these

allegations in her Response Brief, or at oral argument.

II. Standard of Review

The standard of review for a District Court sitting in review of a Bankruptcy Court

decision is “clearly erroneous” with regard to factual findings, and plenary with regard to

legal findings.4 See, e.g. American Flint Glass Workers Union v. Anchor Resolution

Corp., 197 F.3d 76 (3d Cir. 1999); FED. R.BANKR. PROC. 8013.

III. Discussion

A. Whether “Equitable Title” Passed Upon Execution of the Purchase Offer

I find that the “Offer to Purchase Real Estate” was, at most, an executory contract.5

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presented, it could have been considered by the Bankruptcy Court, but any state court action to

recover the amount would have been in conflict with the bankruptcy stay. Ms. Waite chose

instead to file a claim for $2,000 with the Bankruptcy Court, during the course of Brundage’s

first bankruptcy. 

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In fact, Waite’s attorney agreed at oral argument that legal title would not, and could not,

transfer until the full purchase price and deed had exchanged hands.

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In fact, Waite fails to cite a single case or statute in the entire Response/Reply brief.

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An executory contract is one in which “the vendee still owes a material part of the

purchase price and the vendor has not transferred title, and is not obligated to do so until

that price is fully paid.” Atiyeh v. Bear, 456 Pa. Super. 548, 561, 690 A.2d 1245, 1252

(1997); see also In re General Datacomm Industries, Inc., 407 F.3d 616, 622 (3d Cir.

2005). Here, it is undisputed that Waite paid only $2,000 of the purchase price, and that

Brundage has not transferred title.6

Though in response to Brundage’s argument that the agreement is executory,

Waite states that “nothing [is] further from the truth,” she fails to cite a single case or

statute responding to Brundage’s argument that the contract was executory.7 Given the

nature of the agreement and the failure to close on the transfer, Waite’s argument that the

agreement was not executory is not viable.

Under the Bankruptcy Code, 11 U.S.C. § 365(a), the bankruptcy trustee may

discharge any executory contract. Moreover, under the Code, if the trustee does not reject

or assume the executory agreement within 60 days after the order for Chapter 7 relief,

then the contract is deemed rejected. 11 U.S.C. § 365(d)(1).

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Waite’s argument that equitable title transfers upon execution of an agreement of

sale appears to have some legitimacy, see, e.g. Alberici v. Safeguard Mut. Ins. Co., 444

Pa. Super. 351, 664 A.2d 110 (1995), but she utterly misconstrues the significance of

equitable title. It is well-established that, in Pennsylvania, equitable conversion does not

operate to make the equitable title holder’s rights superior to that of a bankruptcy trustee’s

to reject an executory contract. In re Philadelphia Penn Worsted Co., 278 F.2d 661, 664

(3d Cir. 1960); WILLISTON ON CONTRACTS 78:69 (“if the trustee or debtor in possession

elects to reject . . . an executory contract . . .the contract never becomes part of the

bankruptcy estate”).

B. Whether the Award of Attorney’s Fees Was Supported By the Record

Waite fails to make a single legal argument or attach any support for the

proposition that the award of attorney’s fees was not supported by the record. Brundage

submitted evidence of attorneys fees that were submitted to the Bankruptcy Court, and

Waite failed to rebut that assertion. There is no question attorney’s fees are appropriate -

Brundage was required to bring this adversary action because Waite refused to dismiss

her state court claim, which flouted the stay of bankruptcy. I will therefore uphold the

award of attorney’s fees.

C. Whether the Anticipated Discharge By the Bankruptcy Court Moots the

Issue of Violation of the Automatic Stay

In addition to being without any merit, this issue is not ripe for review, as no

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8Appellant/Cross-Appellee fails entirely to address this issue - the sole counterclaim - in

her Reply/Response Brief. 

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discharge has yet been filed by the Bankruptcy Court. Nonetheless, a review of the case

law reveals nothing to stand for the proposition that Waite argues. The Bankruptcy Code

requires that the stay of any action against a property subject to the bankruptcy continues

until that property is no longer property of the estate and, in a Chapter 7 bankruptcy, until

the time a discharge is granted or denied. 11 U.S.C. §362(c). Thus, the stay against any

action with regard to the property itself (should that be deemed part of the estate) or with

regard to the sales contract (should that be deemed part of the estate), will be in effect

until the piece of real estate is no longer the property of the estate. See also 11 U.S.C.

§524(a)(2) (a discharge “operates as an injunction against the commencement or

continuation of an action, the employment of process, or an act, to collect, recover or

offset any such debt as a personal liability of the debtor”). I therefore dismiss this count

of the Appeal as meritless.

D. Whether the Bankruptcy Court Erred in Finding State Law Claims to Be

Preempted8

In his Adversary Complaint in bankruptcy court, Brundage argues that Waite’s use

of a common pleas action to enforce her rights against Brundage constitutes a violation of

the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S.

§2270.5(a) and 73 P.S. § 201-9.02(a). The bankruptcy judge dismissed the state law

claim for treble damages, finding it preempted by the Bankruptcy Code.

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9The citation to the UTPCPL in the bankruptcy judge’s opinion is to 73 P.S. §

2270.4(b)(5)(v), (6)(vi). The citation in Brundage’s adversary complaint, on the other hand, is to

§ 2270.5(a) and § 201-9.2(a).

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The UTPCPL forbids a creditor from acting in any manner, “the natural

consequence of which is to harass, oppress or abuse any person in connection with the

collection of a debt.” 73 P.S. § 2270.4(b)(4). It appears that this is the theory under

which Brundage asked for treble damages in bankruptcy court.9 

Courts should not lightly infer preemption. International Paper Co. v.

Ouellette, 479 U.S. 481 (1987). Preemption may be inferred, however, where the federal

legislation at issue is “sufficiently comprehensive to make reasonable the inference that

Congress left no room for supplementary state regulation.” Id. at 497 (internal citations

omitted). The Supreme Court reaffirmed this principle in English v. General Electric

Co., 110 S.Ct. 2270 (1990). In English, however, the Court also noted that normally

“state causes of action are not pre-empted solely because they impose liability over and

above that authorized by federal law.” Id. at 2280.

In Abramson v. Federman & Phelan, 313 B.R. 195 (W.D.Pa. 2004), Chapter 13

debtors brought an adversary proceeding in bankruptcy court for alleged violations of,

inter alia, the UTPCPL. The bankruptcy court found that the Bankruptcy Code

preempted the state law claims. Id. at 198. The court held further that one of the

“fundamental purposes of the bankruptcy system is to adjudicate and conciliate all

competing claims to a debtor’s property in one forum.” Id. at 197.

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10It is not clear that the underlying facts in this case even create a viable UTPCPL action.

Brundage does not coherently argue why they should, other than noting, without citation, that

“applicable state law merely punctuates the remedies available to the court when a party has

acted illegally in violating the automatic stay.” Moreover, the cases that Brundage string cites

are inapposite. In both In re Patterson, 263 B.R. 82 (E.D.Pa. 2001), and In re Dukes, 1997 WL

860676 (Bankr. E.D. Pa. 1997), the underlying facts created a distinct UTPCPL cause of action,

separate from the stay violation. In In re Aponte, 82 B.R. 738 (E.D.Pa. 1988), the defendant had

willfully violated the automatic stay on a number of occassions, but had also refused to turn the

debtor’s hot water back on, in violation of a bankruptcy court order. The court further found that

“defendant's purpose in engaging in these actions was to force debtor out of the unit, and that this

was an attempt to harm debtor by violating debtor's property interest in the unit.” Id. at 747. 

While this case is somewhat similar, it is still easily distinguishable from the instant case, in

which Brundage appears to ask for treble damages solely as a result of the violation of the

automatic stay.

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Further, the Bankruptcy Code explicitly provides for punitive damages, 11 U.S.C.

§ 362(h), but it does not provide for treble damages. The UTPCPL provides for treble

damages, where a person “purchases or leases goods or services primarily for personal,

family or household purposes and thereby suffers any ascertainable loss of money or

property, real or personal, as a result of the use or employment by any person of a method,

act or practice declared unlawful by section 3” of the UTPCPL. 73 P.S. § 201-9.2(a).10

I find that the bankruptcy court was justified in finding federal preemption of

Brundage’s claim for treble damages.

IV. Conclusion

For the above reasons, I will deny both Waite’s Bankruptcy Appeal and

Brundage’s Cross-Appeal, and will uphold the Bankruptcy Court’s judgment. An

appropriate order follows.

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ORDER

AND NOW, this day of September, 2005, upon consideration of the Bankruptcy Appeal of

Appellant/Cross-Appellee Helen Waite, all responses thereto, and oral argument by both parties,

it is hereby ORDERED the Appeal is DENIED. 

Upon consideration of the Bankruptcy Cross-Appeal of Cross-Appellant/Appellee

Benjamin Brundage, all responses thereto and oral argument by both parties, it is further

ORDERED that the Cross-Appeal is DENIED.

It is further ORDERED that 

(1) Appellant/Cross-Appellee Helen Waite is to pay damages to Appellee/CrossAppellant Benjamin Brundage in the amount of $5,547.00.

(2) The State Court Action filed by Appellant/Cross-Appellee Helen Waite is to be

withdrawn within ten (10) days of the date of this Order.

(3) Appellant/Cross-Appellee Helen Waite shall submit proof of withdrawal of the State

Court Action with this court within fifteen(15) days of this Order.

BY THE COURT:

_________________________________

LAWRENCE F. STENGEL, J.

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