Court Opinion

ID: 9651057
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:04:10.778891+00
Date Added: 2024-06-11T13:26:15.786461
License: Public Domain

JELLEN, Bankruptcy Judge,
with whom OLLASON, Bankruptcy Judge, joins as to Part I, concurring:
I.
I concur with the result, but write separately because I disagree with the holding that Harold S. Taxel, trustee in bankruptcy, was an “individual” within the meaning of Bankruptcy Code section 362(h).
We know from In re Goodman, 991 F.2d 613, 619 (9th Cir.1993) that only an “individual” may recover damages pursuant to section 362(h). We also know that the damage here was suffered by the debtor’s bankruptcy estate. (Mr. Taxel in his individual capacity was not a party to the adversary proceeding and is not a party to this appeal.) Thus, the question, simply, is whether a bankruptcy estate should be considered an “individual” merely because its representative, the trustee in bankruptcy, is an individual. I believe not.
Section 541(a) provides that the commencement of a bankruptcy case “creates an estate.” Section 323(a) provides that “The trustee in a case under this title is the representative of the estate.” Under the Bankruptcy Code, then, the trustee is not an individual; the trustee is a representative of an entity created thereunder, to wit, the estate.14 This important distinction is unequivocally demonstrated in this case by the fact that the bankruptcy court awarded the $43,090.83 as damages to the estate and not to Harold S. Taxel for his individual account.
Moreover, throughout the Bankruptcy Code, Congress uses the term “individual” to refer to the real party in interest rather than the representative of the real party in interest.15 As one example among many, it is beyond dispute that estates and trusts (other than business trusts that qualify under section 101(9) as corporations) are ineligible for relief under any chapter of the Bankruptcy Code.16 This is clear from sec*906tion 109(a), which provides that “only a person ... or a municipality ... may be a debtor under this title,” and section 101(41), which provides that “ ‘person’ includes individual, partnership, and corporation,” thereby excluding estates and non-business trusts.17 Under the above construction, however, testamentary and inter vivos trusts would be eligible for relief whenever the representative of the trust, its trustee, is an individual. A decedent’s estate would also be eligible if it is represented by an executor or administrator who is an individual.
By the same construction, trusts and decedents’ estates represented by an individual fiduciary would not only be eligible for relief under the Bankruptcy Code, they would also qualify to claim exemptions pursuant to section 522(b)(1), file Chapter 13 cases pursuant to section 109(e), and obtain Chapter 7 discharges pursuant to section 727(a), rights that are available only to “individuals.” 18 Corporations and partnerships would also enjoy an expanded array of rights (e.g., eligibility to file Chapter 13 and claim exemptions) in cases where they are represented by a fiduciary who is an individual — a prepetition receiver, for example.
Even if we were to focus only on section 362(h), it would still be apparent that the term “individual” was intended to refer to a natural person injured by a stay relief violation and not to the representative of that person. This is so because under section 321(a), both corporations and individuals are eligible to serve as a trustee in bankruptcy. Yet no logical reason presents itself why Congress would require that damages be awarded to an injured bankruptcy estate that is represented by an individual trustee but not require that damages be awarded to an identical bankruptcy estate suffering identical injury, merely because it is represented by a corporate trustee. Indeed, although substantive provisions concerning bankruptcy trustees, bankruptcy estates, and property of the estate appear throughout the Bankruptcy Code, not one of these provisions sets forth different rights or duties for, or distinguishes between, corporate and individual trustees or the estates that they represent. Section 362(h) should be no different.
II.
Although a trustee is not an “individual” for purposes of section 362(h), I concur in the result because I agree that section 105(a) authorizes bankruptcy judges to impose sanctions. I believe that some elaboration is required, however, because of the holding of In re Sequoia Auto Brokers, Ltd., 827 F.2d 1281 (9th Cir.1987) that section 105(a) does not confer contempt power on bankruptcy judges.
In Sequoia, the bankruptcy court issued a civil contempt order under which the debtor was to be imprisoned until the debt- or complied with the bankruptcy court’s order to file a statement of affairs, schedules, master mailing list, and other documents. After rejecting the arguments that the bankruptcy court had the inherent authority or the implied statutory authority to enter an order of civil contempt, see id. at 1284-99, the Sequoia court considered whether section 105(a) was a source of contempt authority. The court concluded in the negative, reasoning that if section *907105(a) were a source of contempt authority, it would be authority without limitations of the type that Congress has historically placed on other Article I courts, and that bankruptcy judges’ resulting contempt authority would even be broader than that of Article III courts. Id. at 1290.
The foregoing rationale does not apply in eases such as that presented here, where:
1. The sanctions were imposed for a statutory violation, not a violation of a court order;
2. The sanctions were monetary;
3. The sanctions were imposed to compensate, and not to punish or coerce;
4. The sanctions imposed did not exceed the amount of the estate’s out of pocket loss, and thus, were in the nature of actual damages;
5. The relief sought by the estate did not involve the threat of fine or imprisonment; and
6. The sanctions were imposed only after notice, hearing, and an opportunity for appellants to conduct discovery in accordance with Part VII of the Federal Rules of Bankruptcy Procedure.
Thus, when compensatory sanctions are at issue pursuant to section 105(a), limitations exist as to the relief that can be requested, the grounds on which relief may be granted, the procedures that must be followed, and the type of relief that can be ordered.
Consequently, I concur in the result.

. Section 101(15) provides that "‘entity’ includes person, estate, trust, governmental unit, and United States trustee.” Therefore, an estate is an “entity."

. "Under the rules of statutory construction, identical words that are used in different parts of the same act are intended to have the same meaning.” In re Shaw, 157 B.R. 151, 153 (9th Cir. BAP 1993) (citations omitted). Apparently contra, Dewsnup v. Timm, — U.S. -, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992).

. See, e.g., In re Goerg, 844 F.2d 1562, 1565-66 (11th Cir.1988), cert. denied, 488 U.S. 1034, 109 S.Ct. 850, 102 L.Ed.2d 981 (1989) (decedents’ estates ineligible for relief under the Bankruptcy Code); In re Estate of Whiteside by Whiteside, 64 B.R. 99, 101 (Bankr.E.D.Cal.1986) (probate estate ineligible for relief); In re Johnson, 82 B.R. 618 (Bankr.S.D.Fla.1988) (family trust ineligible for relief); In re St. Augustine Trust, 109 B.R. 494 (Bankr.M.D.Fla.1990) (family trust ineligible for relief); In re BKC Realty Trust, 125 B.R. 65 (Bankr.D.N.H.1991) (non-business trust ineligible for relief).

. The legislative history for section 101(41), defining "person,” states: "The definition does not include an estate or a trust, which are included only in the definition of 'entity’ in proposed 11 U.S.C. § 101(14) [now, § 101(15)]." H.R.Rep. No. 95-595, 95th Cong., 2d Sess. 313, reprinted in 1978 U.S.C.C.A.N. 5787, 5963, 6270.

. Under section 522(b)(1), "an individual may exempt ... property of the estate." Under section 109(e) "[o]nly an individual with regular income," defined in section 101(3) as an "individual whose income is sufficiently stable and regular,” may file a Chapter 13 case. Under section 727(a)(1), a debtor is not entitled to a discharge if “the debtor is not an individual." See also sections 101(18) and 109(f), under which eligibility for Chapter 12 as a "family farmer" can depend on whether the debtor is an "individual.” In each of these cases, "individual" refers to the natural person who is the real party in interest and not to a representative. A contrary construction would lead to anomalous results at odds with well established Bankruptcy Code principles, and would violate the rule of statutory construction cited in footnote 15, supra.