Source: https://case-law.vlex.com/vid/92-f-3d-1539-597886106
Timestamp: 2020-04-08 02:38:01
Document Index: 285671024

Matched Legal Cases: ['§ 362', '§ 105', '§ 362', '§ 105', '§ 2412', '§ 7430', '§ 1291', '§ 106', '§ 105', '§ 362', '§ 105', '§ 2412', '§ 7430', '§ 362', '§ 362']

92 F.3d 1539 (11th Cir. 1996), 94-6372, Jove Engineering, Inc. v. I.R.S. - Federal Cases - Case Law - VLEX 597886106
92 F.3d 1539 (11th Cir. 1996), 94-6372, Jove Engineering, Inc. v. I.R.S.
Docket Nº: 94-6372.
Citation: 92 F.3d 1539
Party Name: 36 Collier Bankr.Cas.2d 1270 In re JOVE ENGINEERING, INC., Debtor-Appellant, Cross-Appellee, v. INTERNAL REVENUE SERVICE, Appellee, Cross-Appellant.
92 F.3d 1539 (11th Cir. 1996)
36 Collier Bankr.Cas.2d 1270
In re JOVE ENGINEERING, INC., Debtor-Appellant, Cross-Appellee,
INTERNAL REVENUE SERVICE, Appellee, Cross-Appellant.
Before BIRCH and BARKETT, Circuit Judges, and SMITH, [*] Senior Circuit Judge.
Jove Engineering, Inc. ("Jove") appeals the district court's order denying it relief against the Internal Revenue Service ("IRS") under 11 U.S.C. § 362(h), 1 and limiting Jove's relief under 11 U.S.C. § 105. The district court limited Jove's relief to the amount of $500 as attorney fees, to be offset against any bankruptcy liability to IRS, for the violation by IRS of 11 U.S.C. § 362(a), and specifically the automatic stay provision which arose when Jove filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. In re Jove Engineering, Inc., 171 B.R. 387 (N.D.Ala.1994). IRS cross-appeals the district court's award of attorney fees under § 105. We have resolved several issues which required clarification in this circuit, and we remand to the district court to assess attorney fees consistent with 28 U.S.C. § 2412(d)(2)(A) and 26 U.S.C. § 7430.
Initially we conclude we have jurisdiction to review the district court's order as a "final decision" under 28 U.S.C. § 1291, notwithstanding that court's remand to the bankruptcy court. We further conclude that, as amended in 1994, 11 U.S.C. § 106 unequivocally waives sovereign immunity for monetary damages under 11 U.S.C. §§ 105(a) and 362(h). However, Jove is not entitled to relief under § 362(h) because the term "individual," as used in that provision, does not include a corporation. Jove is entitled to relief under § 105(a) which, distinct from the court's inherent powers, grants the court statutory powers to enter monetary damages. An award of monetary sanctions is appropriate in this case because IRS willfully violated the automatic stay when it knew the stay was in effect and intended the actions that violated the stay, regardless whether any IRS employee had the specific intent to violate the stay. In this case, monetary sanctions are limited to actual expenses, such as attorney fees, because Jove's claim for coercive sanctions appear more punitive in nature and Congress expressly declined to
waive sovereign immunity for punitive damages. We must remand to the district court to assess attorney fees consistent with both 28 U.S.C. § 2412(d)(2)(A) and 26 U.S.C. § 7430 because neither the parties nor the court addressed the criteria of these provisions.
Sometime after filing the bankruptcy petition, Jove filed a Form 941 tax return with the Memphis office for the tax quarter ending September 30, 1992 (all pre-petition tax liability). On December 21, the Memphis office mailed Jove a "Request for Payment" seeking to collect taxes, penalties and interest totaling $112,433.65 for a tax period occurring both pre- and post-petition. This request warned Jove to make payment before December 31 to avoid further penalty. 2 Although Jove's tax return was for pre-petition liability, the computer code did not preclude this request, apparently because the return was actually filed post-petition. IRS did not explain why the computer code does not preclude collection attempts for returns filed post-petition that only reference pre-petition liability.
On March 4, 1993, IRS filed with the bankruptcy court a "Proof of Claim" against Jove for unpaid taxes, penalties and interest totaling $304,239.08. On March 29, the Memphis office mailed a certified letter to Jove entitled "Notice of Intent to Levy--Immediate Response Required" seeking $41,745.61 in taxes, penalties and interest for the tax period ending December 31, 1992 (this quarter included 19 pre-petition days). The letter warned further that, if payment was not received by April 28, "the law allows us to seize your property or rights to property such as real estate and personal property to collect the amount you still owe." On April 5, Jove's attorney mailed to the Memphis office an executed power of attorney form which IRS marked "received" on April 8. This letter reiterated information in prior letters and further stated "any further direct communications with [Jove] will be interpreted as a willful violation of the automatic stay
and appropriate action will be taken." However, on April 15, IRS issued another "Notice of Intent to Levy--Immediate Response Required" requesting payment for only $3,813.91 3 and referencing the tax period ending December 31, 1992. On April 28, 1993, Jove filed a motion with the bankruptcy court to hold IRS in civil contempt for violating the automatic stay.
On April 28, 1993, Jove filed a motion with the bankruptcy court to hold IRS in civil contempt for violating the automatic stay. Jove later filed a motion to withdraw the contempt motion to district court due to concern whether the bankruptcy court had authority to rule on the contempt motion. On July 19, the bankruptcy court granted Jove's motion to withdraw the contempt motion to district court. After receiving briefs and conducting a hearing, the district court issued a memorandum opinion making findings of facts and conclusions of law. After thoroughly reviewing conflicting circuit decisions, the district court held that Jove, as a corporation, was not an "individual" entitled to relief under 11 U.S.C. § 362(h) based on (1) the plain meaning of the statute; (2) the statute's different treatment of individuals, corporations and partnerships; and (3) "the fact that § 362(h) was adopted as a part of 'Consumer Credit Amendments,' suggests that only individuals, not...