National Industrial Contractors, Inc.

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Case 04-02909-5-ATS Doc 206 Filed 06/10/05 Entered 06/10/05 11:41:58 Page1of4

UN TED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEI GH Di VI SI ON
IN RE: CASE NO

NATT ONAL INDUSTRI AL 04- 02909- 5- ATS
CONTRACTORS, INC.

AWARDING SANCIT ONS

The natter before the court is the order for Casey’ s Auto Sales
to showcause for failingto conply wththis court’s order of Decenber
9, 2005. Aprelimnary hearing took place in Raleigh, North Carolina
on April 13, 2005, and an order was entered on April 13, 2005, naking
prelim nary findings and continuing the hearing. The final hearing
took place on June 1, 2005, in Raleigh, North Carolina.

National Industrial Contractors, Inc. fileda petition for relief
under chapter 11 of the Bankruptcy Code on August 10, 2004. ©
Decenber 9, 2004, the court entered an order directing Casey’ s Auto
Sales to turn over vehicles inthe possession of Casey’s and to provide
an accounting of all repairs or maintenance perforned for all
out st andi ng annunts oved by the debtor to Casey’s. The debtor recei ved
no response fromCasey’s, and Casey’s did not conpl y wth the order.
On February 4, 2005, the debtor’s counsel sent aletter to Casey’ s,

encl osing a copy of the order and requesting i nmedi ate turnover and an

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accounting. Casey’s did not respond to the letter, and the debtor
filed a motion for a show cause order on March 23, 2005.
Casey’s failed to appear at the show cause hearing on April 13,
2005. The debtor’s counsel represented that he spoke with a
representative of Casey’s on April 4, 2005, and that Casey’s agreed to
release the vehicles to a towing company. At that time, the vehicles
had not been recovered by the debtor, and the debtor did not have
information regarding the condition of the vehicles. The court
preliminarily found that the debtor had incurred attorney’s fees of
$928.98 to pursue recovery of the vehicles and that it claimed damages
of $2,500 for replacement vehicles. The court continued the hearing
and noted that it would consider any other claimed damages at the
continued hearing. The debtor now contends that since the first
hearing, it incurred additional attorney’s fees of $1,061 and
discovered damage to the vehicles in the amount of $580.
Terry Casey appeared at the hearing on June 1, 2005, and testified
that he learned of the bankruptcy filing in December 2004, at which
time the debtor’s counsel telephoned him to request information about
the amounts owed by the debtor to Casey’s. Mr. Casey contends that the
debtor did not request turnover of the vehicles at that time. Mr.
Casey contends that the first time he learned the debtor wished to
recover the vehicles was when he received the notice of hearing on the
motion to show cause. Mr. Casey testified that he did not appear at
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the show cause hearing because he assumed the court would enter an
order whether or not he appeared. Mr. Casey further contended that he
would have turned over the vehicles without opposition had he been
asked to do so.
The motion for turnover and order directing turnover were served
on Casey’s Auto Sales at the correct address. The court presumes that
they were received, and Mr. Casey’s denial of receipt is not credible.
Mr. Casey ignored the debtor’s efforts to recover the vehicles as well
as the court’s order of turnover. On the other hand, the debtor was
not particularly aggressive about pursuing recovery of the vehicles,
and it is not entitled to its full damages for replacement vehicles.
Based on the foregoing, the court will award sanctions of one-half
the amount requested for a total of $1,490 ($2,500 + $580 = $2,980 x
0.5 = $1,540), plus attorney’s fees of $750. WITHIN 10 DAYS OF THE
DATE OF THIS ORDER, CASEY’S AUTO SALES IS DIRECTED TO PAY $750 TO THE
ATTORNEY FOR THE DEBTOR, STUBBS & PERDUE, P.A., AT P.O. DRAWER 1654,
NEW BERN, NORTH CAROLINA 28563. WITHIN 10 DAYS OF THE DATE OF THIS
ORDER, CASEY’S AUTO SALES IS DIRECTED TO PAY $1,540 TO THE DEBTOR,
NATIONAL INDUSTRIAL CONTRACTORS, INC., AT 301 SOUTH HIGHWAY 17, HOLLY
RIDGE, NORTH CAROLINA 28445.
SO ORDERED.
DATED: June 10, 2005
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