Premier Automotive Services, Inc.

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
In re: 	*
PREMIER AUTOMOTIVE 	* 	Case No. 05-20168-JS
SERVICES, INC.,
Debtor 	* 	Chapter 11
* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	*
THE MARYLAND PORT 	*
ADMINISTRATION,
*
Movant
v.
*
PREMIER AUTOMOTIVE
SERVICES, INC., 	*
Respondent 	*
* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	*
PREMIER AUTOMOTIVE 	*
SERVICES, INC.,
*
Plaintiff
* 	Adv. Proc. No. 05-1378-JS
Date signed June 08, 2006
Entered: June 08, 2006 Case 05-20168 Doc 73 Filed 06/08/06 Page 1 of 52

1When it was first created by Laws 1956, Special Session, ch. 2, s 1, the MPA
was known as the Maryland Port Authority. Its name was changed to Maryland Port
Administration by Laws 1970, ch. 526, s 1, at which time it became a part of the
Department of Transportation, Md.Transp.Code Ann. s 6-201. 	Maryland Port
Administration v. I.T.O. Corp. of Baltimore, 40 Md. App. 697, 699, 395 A.2d 145,146,
fn. 3 (1978).
2
v.
ROBERT L. FLANAGAN, Et al. 	*
Defendants 	*
* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	*
MEMORANDUM OPINION GRANTING SUMMARY JUDGMENT TO
THE DEFENDANTS AND RELIEF FROM THE AUTOMATIC STAY
TO THE MARYLAND PORT ADMINISTRATION
The Chapter 11 debtor is a tenant holding over land owned by the State of
Maryland after the expiration and nonrenewal of a long-term lease. 	The instant
Chapter 11case was filed to prevent the State from evicting the debtor from the
property. The debtor filed the instant complaint against the defendants in their official
capacities as officers of the State to for damages and to compel the Maryland Port
Administration 1 to execute a new lease to the debtor on terms more favorable than
those the State found acceptable. Because the defendants are entitled to judgment as
a matter of law, their motion for summary judgment will be granted, as well as the
motion of the Maryland Port Administration for relief from the automatic stay.
FINDINGS OF FACT
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2The State’s comprehensive scope of its interest in and control over the
operation of its ports is set forth in Maryland Transportation Code § 6-102:
TITLE 6. PORTS
SUBTITLE 1--DEFINITIONS; GENERAL PROVISIONS
§ 6-102. Legislative purpose
(a) The General Assembly of Maryland makes the following
declarations of its intent in the enactment of this title.
(b) The ports and harbors of this State are assets of value to the
entire State. The residents of all parts of this State benefit directly from
the waterborne commerce that they attract and service. Any improvement
to these ports and harbors that increases their export and import
commerce will benefit the people of the entire State.
(c)(1) The purpose of this title is to increase the waterborne
commerce of the ports in this State and, by doing so, benefit the people
of this State.
(2) Commerce may be attracted to these areas by:
(i) 	Developing 	existing 	facilities 	to 	provide 	quicker,
cheaper, and better handling of cargoes; and
(ii) Effectively advertising and promoting the facilities and
the use of the several port areas.
3
The debtor, Premier Automotive Services, Inc. (“Premier”), is a Baltimore-
based import/export vehicle processing center located at the Dundalk Marine Terminal
(the “Terminal”), a facility of the port of Baltimore that is owned and managed by the
Maryland Port Administration (“MPA”), an agency of the State of Maryland, created
in Title 6 of the Maryland Transportation Code. 2
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(d)(1) Since existing port and terminal facilities of Baltimore and
other port areas have been provided mostly by private enterprise, the
General 	Assembly 	seeks 	primarily 	to 	improve 	the 	facilities 	and
strengthen the workings of the private operators.
(2) However, the private operators in the port areas have a public
responsibility to provide modern port and harbor facilities suited to the
needs of the public that they serve. Therefore, the Administration should
have power to obtain information about the rates and practices of private
operators, and, while it should assist and encourage the extension and
improvement of privately operated port facilities, it also should have the
power, if private facilities are inadequate or inadequately operated at any
time, to construct and, if necessary, to operate any supplementary public
facilities that it considers to be required in the public interest.
(e) The development of ports able to attract increasing amounts of
waterborne commerce will require the construction of additional modern
facilities and installations. A public port authority, using public funds,
will be able to construct and, if necessary, operate these facilities and
installations if the immediate financial returns are not sufficient to attract
private capital.
(f) In order to meet increased competition from other states’ ports
that are operated with public funds either directly as state agencies or
indirectly as private operating companies, the Administration should
have the authority, subject to approval of the Commission, to operate
public port facilities either directly or indirectly in the form and manner
that the Commission deems necessary.
Id.
4
Premier, formerly known as “The Maryland Undercoating Co., Inc.,” has
occupied Lot 90 at the Terminal as a tenant of MPA continuously since 1964. 	Its
business is the processing of motor vehicles, including automobile, trucks, military,
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3Article 4.2 of the lease provided, as follows:
Any and all buildings. . .erected or caused to be erected by
PREMIER upon the leased premises at PREMIER’ s expense shall be
owned by PREMIER and must be removed by it at its expense upon the
termination of this LEASE or any renewal thereof; or, in the event that
PREMIER request, in writing, MPA’s permission to leave any and all
buildings. . .erect and intact and MPA specifically notifies PREMIER in
writing that MPA specifically allows and agrees that the buildings . .
.erected by PREMIER may remain in place. . . .In the event that MPA
does allow and agree that the buildings. . . erected by PREMIER are to
5
agricultural and construction equipment through the port. Lot 90 is the location upon
which the debtor constructed a 27,500 square-foot building (“the Building”) at the
beginning of its occupancy. The Building contains a body shop, a paint shop, offices
and a wash line. Premier also occupies Lot 401 at the Terminal pursuant to a separate
sublease. Lot 401 is used for equipment assembly and as a storage facility.
On July 28, 1992, Premier and MPA entered into a written lease for Lot 90 and
other parcels not relevant to this lawsuit. On July 1, 1997, Premier and MPA renewed
the lease for ten years, continuing in effect the terms and conditions of the original
lease. 	The renewed lease with a slightly different acreage terminated on June 30,
2002. Upon its expiration, the lease provided that Premier became a month-to-month
tenant. The lease provided that at the conclusion of its tenancy, Premier was required
to remove any buildings it had erected or, with the approval of MPA, to abandon the
buildings to the MPA. Lease, Article 4, Sec. 2. 3
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remain intact after the termination date of this LEASE or any renewal
thereof, PREMIER agrees that ownership of all of the aforementioned
buildings. . . shall pass to and be made the property of MPA. . .
Id.
4Premier’s summary of schedules discloses assets of $105,511.29, and liabilities
of $14,091.40.
6
As of June 30, 2002, the parties had not executed a new lease. Premier objected
to certain proposed terms contained in a new five-year lease submitted by MPA. One
such provision contained in Section 2.1(b)(the “vehicle guarantee, ” or “thruput”),
required that Premier “receive, process and distribute a minimum of 1,700 vehicles
per acre of useable vehicle storage area of the Premises” per lease year to avoid
additional fees. A second provision Section 1.5 (“Relocation”), gave MPA “the right
and option, at MPA’s sole discretion, to relocate the Premises or any portion thereof,
to a comparable facility” with 180 days’ notice. During the years 2002 through 2004,
MPA proposed leases to Premier similar to that proposed in 2002. Each time, Premier
refused to accept the terms proposed by MPA.
On March 29, 2005, MPA requested that Premier vacate Lot 90 on or before
May 1, 2005. On April 29, 2005, Premier filed the instant Chapter 11 bankruptcy
case. 	The schedules and statements filed by the debtor [P. 28] indicate that it was
solvent on the date of filing.4 MPA is listed as a creditor holding a claim in the
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5On July 29, 2005, this Court granted the debtor’s unopposed motion to extend
time to assume or reject unexpired leases of non-residential real property [P. 35] until
60 days after the entry of a final order in the instant adversary proceeding.
7
amount of $17, 045.08, that is not included in the schedules. MPA did not file a proof
of claim. The schedules indicate that Premier had no secured creditors. On Schedule
G, Premier listed the real property lease with MPA “dated July 28, 1992 as amended
from time to time” as an executory contract or unexpired lease. 5
On May 6, 2005, Premier filed the first of three complaints for declaratory
judgment, preliminary and permanent injunction and ancillary damages against the
defendants, Robert L. Flanigan, in his official capacity as Secretary of the Maryland
Department of Transportation, M. Kathleen Broadwater, in her official capacity as
Acting Executive Director of MPA, and MPA itself. 	The complaint was based on
MPA’s alleged failure to negotiate in good faith the terms of a new long term lease of
Lot 90, and was brought pursuant to 42 U.S.C. § 1983 for an alleged denial of
substantive due process and equal protection and unlawful taking.. 	In addition to
injunctive and declaratory relief, the complaint sought an award of damages and
attorneys fees.
Count I alleged that MPA infringed the debtor’s property interests, including
the Building, fixtures and improvements, contracts with customers, goodwill and the
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6The Fourteenth Amendment to the U.S. Constitution provides, as its pertains
to the debtor’s claims, as follows:
Amendment XIV
Section 1. All persons born or naturalized in the United States,
and subject to the jurisdiction thereof, are citizens of the United States
and of the State wherein they reside. No State shall make or enforce any
law which shall abridge the privileges or immunities of citizens of the
United States; nor shall any State deprive any person of life, liberty, or
property, without due process of law; nor deny to any person within its
jurisdiction the equal protection of the laws. . . .
Id.
8
business as a “going concern,” that are subject to protection by the Fourteenth
Amendment.6
Count II claimed that MPA intends to take Premier’s private property, namely
the Lot 90 leasehold, together with the Building, fixtures and its business, for
governmental use without just compensation.
Count III alleges a denial of equal protection by MPA having targeted the
debtor for discrimination out of a group of similarly situated tenants. Premier argued
that MPA refused to negotiate a commercially-fair and reasonable lease with Premier
while it offered a leasehold interest to The Pasha Group (“Pasha”), a competitor of
Premier on more favorable terms.
Count IV alleged a violation of the State law requirement of “fair dealing.”
Case 05-20168 Doc 73 Filed 06/08/06 Page 8 of 52

7James G. Robinson, Director of Premier, who signed the corporate resolution
that accompanied the voluntary Chapter 11 petition.
8Janet M. West, the corporate secretary of Premier, signed all three complaints.
9Helen Delich Bentley is a former Member of Congress from Maryland and
Chairman of the Federal Maritime Commission. Governor Robert Ehrlich recently
announced that the port will be renamed the “Helen Delich Bentley Port of
Baltimore,” at ceremonies marking the port’s 300th anniversary.
9
On June 13, 2005, the defendants filed a motion to dismiss [P. 6], to which the debtor
responded by filing an amended complaint [P.13], on June 22, 2005 . The amended
complaint substituted F. Brooks Royster, III, in his official capacity as Executive
Director of MPA, in place of M. Kathleen Broadwater, and deleted Count IV (fair
dealing). On October 28, 2005, the MPA filed its motion for relief from stay, to evict
Premier from Lot 90.
Meanwhile, MPA, through M. Catherine Orleman, Esquire, as its “Principal
Counsel,” sent the following letter on letterhead of the Attorney General of the State
of Maryland, dated October 3, 2005, to Charles S. Fax, Esquire, counsel to Premier:
As you know, I met with Jim Robinson,7 Janet West8 and Helen
Bentley 9 recently. 	During that meeting, Mr. Robinson expressed the
opinion that the MPA was delaying approval of a proposed sublease
from APS North Terminal, Inc. (“Amports”) to Premier Automotive
Services, Inc. (“Premier”) for a portion of Lot 401 because of a dispute
between Premier and MPA regarding Lot 90. I have investigated Mr.
Robinson’s concerns and can inform Premier that Mr. Robinson is
mistaken. 	While it is true that MPA has decided not to authorize the
proposed sublease, MPA’s reasons stem from Premier’s financial
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10Section 525 of the Bankruptcy Code provides, as follows:
§ 525. Protection against discriminatory treatment
(a) Except as provided in the Perishable Agricultural Commodities
Act, 1930, the Packers and Stockyards Act, 1921, and section 1 of the
Act entitled “An Act making appropriations for the Department of
Agriculture for the fiscal year ending June 30, 1944, and for other
purposes,” approved July 12, 1943, a governmental unit may not deny,
revoke, suspend, or refuse to renew a license, permit, charter, franchise,
10
condition rather than from the current dispute between MPA and Premier
over Lot 90.
Premier filed for bankruptcy on April 29, 2005. It has not yet filed
a plan of reorganization. In the bankruptcy action, Premier has alleged
it must have a long-term lease at Lot 90 in order for its business to
survive. However, Premier has no lease at Lot 90 and MPA has already
made arrangements to lease Lot 90 to Pasha Automotive Services.
Based on the information presented in the bankruptcy action, it is not
clear to MPA that Premier will be able to reorganize and function as a
viable port tenant.
MPA had discussions with Premier for approximately three years
over a long-term lease at Lot 90. Premier refused to do more than stay
there on a month-to-month basis. 	It is MPA’s understanding that
Premier is not financially in a position to make a long-term commitment
to MPA. The bankruptcy filing confirms MPA’s concerns that Premier
is not a credit-worthy tenant.
Letter from Orleman to Fax, dated October 3, 2005.
On December 7, 2005, Premier filed a second amended complaint [P. 51], that
restated the provisions of the amended complaint, but added a new Count IV, based
upon 11 U.S.C. § 525 10 which is intended to protect a Title 11 debtor from
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or other similar grant to, condition such a grant to, discriminate with
respect to such a grant against, deny employment to, terminate the
employment of, or discriminate with respect to employment against, a
person that is or has been a debtor under this title or a bankrupt or a
debtor under the Bankruptcy Act, or another person with whom such
bankrupt or debtor has been associated, solely because such bankrupt or
debtor is or has been a debtor under this title or a bankrupt or debtor
under the Bankruptcy Act, has been insolvent before the commencement
of the case under this title, or during the case but before the debtor is
granted or denied a discharge, or has not paid a debt that is dischargeable
in the case under this title or that was discharged under the Bankruptcy
Act.
(b) No private employer may terminate the employment of, or
discriminate with respect to employment against, an individual who is or
has been a debtor under this title, a debtor or bankrupt under the
Bankruptcy Act, or an individual associated with such debtor or
bankrupt, solely because such debtor or bankrupt–
(1) is or has been a debtor under this title or a debtor or bankrupt
under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under
this title or during the case but before the grant or denial of a discharge;
or
(3) has not paid a debt that is dischargeable in a case under this
title or that was discharged under the Bankruptcy Act.
(c)(1) A governmental unit that operates a student grant or loan
program and a person engaged in a business that includes the making of
loans guaranteed or insured under a student loan program may not deny
a student grant, loan, loan guarantee, or loan insurance to a person that
is or has been a debtor under this title or a bankrupt or debtor under the
Bankruptcy Act, or another person with whom the debtor or bankrupt has
been associated, because the debtor or bankrupt is or has been a debtor
under this title or a bankrupt or debtor under the Bankruptcy Act, has
11
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been insolvent before the commencement of a case under this title or
during the pendency of the case but before the debtor is granted or
denied a discharge, or has not paid a debt that is dischargeable in the case
under this title or that was discharged under the Bankruptcy Act.
(2) In this section, “student loan program” means any program
operated under title IV of the Higher Education Act of 1965 or a similar
program operated under State or local law.
11 U.S.C. § 525.
11This claim not set forth in the original complaint. 	In the second amended
complaint, Premier added Count IV alleging a violation of 11 U.S.C. § 525 and 42
U.S.C. § 1983 stemming from MPA’s denial of consent to a proposed renewed
sublease for Lot 401 agreed to by Premier and Amports, the sublandlord, on March
31, 2005. Premier argues that consent is withheld solely because it filed the instant
bankruptcy case.
12The Eleventh Amendment to the U.S. Constitution provides, as follows:
Amendment XI. Suits Against States
12
discrimination. Premier claims that that MPA has refused to consent to a proposed
sublease between Amports as sublandlord and Premier as subtenant for Lot 401,
because Premier is in bankruptcy. 11
The defendants did not renew their motion to dismiss but filed a motion for
summary judgment [P. 52] against the second amended complaint on December 27,
2005.
MPA asserts as a complete defense to the complaint the Eleventh Amendment
bar that protects the State from being sued in Federal court without its consent.12
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The Judicial power of the United States shall not be construed to
extend to any suit in law or equity, commenced or prosecuted against one
of the United States by Citizens of another State, or by Citizens or
Subjects of any Foreign State.
Id. In Hans v. Louisiana, 134 U.S. 1, 105 S. Ct. 504, 33 L. Ed. 842, 849 (1890), the
Supreme Court extended the prohibition of the Eleventh Amendment to suits brought
against a State in Federal court by that State’s own citizens. 	The court pointedly
added, however:
. . . [A]lthough the obligations of a state rest for their performance upon
its honor and good faith, and cannot be made the subjects of judicial
cognizance unless the state consents to be sued or comes itself into court,
yet, where property or rights are enjoyed under a grant or contract made
by a state, they cannot wantonly be invaded. While the state cannot be
compelled by suit to perform its contracts, any attempt on its part to
violate property or rights acquired under its contracts may be judicially
resisted, and any law impairing the obligation of contracts under which
such property or rights are held is void and powerless to affect their
enjoyment. It is not necessary that we should enter upon an examination
of the reason or expediency of the rule which exempts a sovereign state
from prosecution in a court of justice at the suit of individuals. This is
fully discussed by writers on public law. It is enough for us to declare
its existence. The legislative department of a state represents its polity
and its will, and is called upon by the highest demands of natural and
political law to preserve justice and judgment, and to hold inviolate the
public obligations. Any departure from this rule, except for reasons most
cogent, (of which the legislature, and not the courts, is the judge,) never
fails in the end to incur the odium of the world, and to bring lasting
injury upon the state itself. But to deprive the legislature of the power
of judging what the honor and safety of the state may require, even at the
expense of a temporary failure to discharge the public debts, would be
attended with greater evils than such failure can cause.
Hans v. Louisiana, 134 U.S. at 20-1, 10 S. Ct. at 509, quoted In Westel Woodbury
Willoughby, 3 Constitutional Law of the United States 1391 (1929).
13
MPA takes the position that the debtor has no Fifth or Fourteenth Amendment
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13Section 157 of Title 28 provides, as follows:
§ 157. Procedures
(a) Each district court may provide that any or all cases under title
11 and any or all proceedings arising under title 11 or arising in or
related to a case under title 11 shall be referred to the bankruptcy judges
for the district.
(b)(1) Bankruptcy judges may hear and determine all cases under
title 11 and all core proceedings arising under title 11, or arising in a case
under title 11, referred under subsection (a) of this section, and may enter
appropriate orders and judgments, subject to review under section 158
14
claims to Lot 90 because any rights to property that the debtor enjoyed were subject
to the terms of the written lease that has since expired. Therefore, any rights to which
the debtor may be entitled are entirely contractual and must be litigated in the State
court.
Premier claims that it is entitled to seek injunctive relief from the bankruptcy
court to prevent a violation by the State of its rights under the Fifth and Fourteenth
Amendments, arguing that the decision of the Supreme Court in Ex parte Young, 209
U.S. 123, 159-160, 28 S.Ct. 441,453 52 L.Ed. 714, 728-729 (1908), entitles it to seek
injunctive and declaratory relief against state officers in Federal bankruptcy court to
enjoin the infringement of its constitutional rights. The complaint asserts that this
Court has subject matter jurisdiction over the instant complaint pursuant to 28 U.S.C.
§157, 13
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of this title.
(2) Core proceedings include, but are not limited to–
(A) matters concerning the administration of the estate;
(B) allowance or disallowance of claims against the estate
or exemptions from property of the estate, and estimation of claims or
interests for the purposes of confirming a plan under chapter 11, 12, or
13 of title 11 but not the liquidation or estimation of contingent or
unliquidated personal injury tort or wrongful death claims against the
estate for purposes of distribution in a case under title 11;
(C) counterclaims by the estate against persons filing claims
against the estate;
(D) orders in respect to obtaining credit;
(E) orders to turn over property of the estate;
(F) proceedings to determine, avoid, or recover preferences;
(G) motions to terminate, annul, or modify the automatic
stay;
(H) proceedings to determine, avoid, or recover fraudulent
conveyances;
(I) determinations as to the dischargeability of particular
debts;
(J) objections to discharges;
(K) determinations of the validity, extent, or priority of
liens;
15
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(L) confirmations of plans;
(M) orders approving the use or lease of property, including
the use of cash collateral;
(N) orders approving the sale of property other than
property resulting from claims brought by the estate against persons who
have not filed claims against the estate;
(O) other proceedings affecting the liquidation of the assets
of the estate or the adjustment of the debtor-creditor or the equity
security holder relationship, except personal injury tort or wrongful
death claims; and
(P) recognition of foreign proceedings and other matters
under chapter 15 of title 11.
(3) The bankruptcy judge shall determine, on the judge's own
motion or on timely motion of a party, whether a proceeding is a core
proceeding under this subsection or is a proceeding that is otherwise
related to a case under title 11. A determination that a proceeding is not
a core proceeding shall not be made solely on the basis that its resolution
may be affected by State law.
(4) Non-core proceedings under section 157(b)(2)(B) of title 28,
United States Code, shall not be subject to the mandatory abstention
provisions of section 1334(c)(2).
(5) The district court shall order that personal injury tort and
wrongful death claims shall be tried in the district court in which the
bankruptcy case is pending, or in the district court in the district in which
the claim arose, as determined by the district court in which the
bankruptcy case is pending.
(c)(1) A bankruptcy judge may hear a proceeding that is not a core
proceeding but that is otherwise related to a case under title 11. In such
16
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proceeding, the bankruptcy judge shall submit proposed findings of fact
and conclusions of law to the district court, and any final order or
judgment shall be entered by the district judge after considering the
bankruptcy 	judge's 	proposed 	findings 	and 	conclusions 	and 	after
reviewing de novo those matters to which any party has timely and
specifically objected.
(2) Notwithstanding the provisions of paragraph (1) of this
subsection, the district court, with the consent of all the parties to the
proceeding, may refer a proceeding related to a case under title 11 to a
bankruptcy judge to hear and determine and to enter appropriate orders
and judgments, subject to review under section 158 of this title.
(d) The district court may withdraw, in whole or in part, any case
or proceeding referred under this section, on its own motion or on timely
motion of any party, for cause shown. The district court shall, on timely
motion of a party, so withdraw a proceeding if the court determines that
resolution of the proceeding requires consideration of both title 11 and
other laws of the United States regulating organizations or activities
affecting interstate commerce.
(e) If the right to a jury trial applies in a proceeding that may be
heard under this section by a bankruptcy judge, the bankruptcy judge
may conduct the jury trial if specially designated to exercise such
jurisdiction by the district court and with the express consent of all the
parties.
28 U.S.C. § 157.
14Section 1331 of Title 28 provides:
§ 1331. Federal question
The district courts shall have original jurisdiction of all civil
17
1331,14 1334 15 and 1343,16 and that it has the power to grant declaratory relief
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actions arising under the Constitution, laws, or treaties of the United
States.
28 U.S.C. § 1331.
15Section 1334 of Title 28 provides:
§ 1334. Bankruptcy cases and proceedings
(a) Except as provided in subsection (b) of this section, the district
courts shall have original and exclusive jurisdiction of all cases under
title 11.
(b) Except as provided in subsection (e)(2), and notwithstanding
any Act of Congress that confers exclusive jurisdiction on a court or
courts other than the district courts, the district courts shall have original
but not exclusive jurisdiction of all civil proceedings arising under title
11, or arising in or related to cases under title 11.
(c)(1) Except with respect to a case under chapter 15 of title 11,
nothing in this section prevents a district court in the interest of justice,
or in the interest of comity with State courts or respect for State law,
from abstaining from hearing a particular proceeding arising under title
11 or arising in or related to a case under title 11.
(2) Upon timely motion of a party in a proceeding based upon a
State law claim or State law cause of action, related to a case under title
11 but not arising under title 11 or arising in a case under title 11, with
respect to which an action could not have been commenced in a court of
the United States absent jurisdiction under this section, the district court
shall abstain from hearing such proceeding if an action is commenced,
and 	can 	be 	timely 	adjudicated, 	in 	a 	State 	forum 	of 	appropriate
jurisdiction.
(d) Any decision to abstain or not to abstain made under
subsection (c) (other than a decision not to abstain in a proceeding
18
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described in subsection (c)(2)) is not reviewable by appeal or otherwise
by the court of appeals under section 158(d), 1291, or 1292 of this title
or by the Supreme Court of the United States under section 1254 of this
title. Subsection (c) and this subsection shall not be construed to limit
the applicability of the stay provided for by section 362 of title 11,
United States Code, as such section applies to an action affecting the
property of the estate in bankruptcy.
(e) The district court in which a case under title 11 is commenced
or is pending shall have exclusive jurisdiction–
(1) of all the property, wherever located, of the debtor as of the
commencement of such case, and of property of the estate; and
(2) over all claims or causes of action that involve construction of
section 327 of title 11, United States Code, or rules relating to disclosure
requirements under section 327.
28 U.S.C. § 1334.
16Section 1343 of Title 28 provides:
§ 1343. Civil rights and elective franchise
(a) The district courts shall have original jurisdiction of any civil
action authorized by law to be commenced by any person:
(1) To recover damages for injury to his person or property, or
because of the deprivation of any right or privilege of a citizen of the
United States, by any act done in furtherance of any conspiracy
mentioned in section 1985 of Title 42;
(2) To recover damages from any person who fails to prevent or
to aid in preventing any wrongs mentioned in section 1985 of Title 42
which he had knowledge were about to occur and power to prevent;
19
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(3) To redress the deprivation, under color of any State law,
statute, ordinance, regulation, custom or usage, of any right, privilege or
immunity secured by the Constitution of the United States or by any Act
of Congress providing for equal rights of citizens or of all persons within
the jurisdiction of the United States;
(4) To recover damages or to secure equitable or other relief under
any Act of Congress providing for the protection of civil rights,
including the right to vote.
(b) For purposes of this section–
(1) the District of Columbia shall be considered to be a State; and
(2) any Act of Congress applicable exclusively to the District of
Columbia shall be considered to be a statute of the District of Columbia.
28 U.S.C.A. § 1343.
17Undoubtedly, the debtor meant to refer to 11 U.S.C. § 105(a), the so-called
“All Writs Act,” which provides, as follows:
§ 105. Power of court
(a) The court may issue any order, process, or judgment that is
necessary or appropriate to carry out the provisions of this title. 	No
provision of this title providing for the raising of an issue by a party in
interest shall be construed to preclude the court from, sua sponte, taking
any action or making any determination necessary or appropriate to
enforce or implement court orders or rules, or to prevent an abuse of
process.
Id.
18Section 2201 of Title 28 provides:
20
pursuant to 28 U.S.C. §§ 105(a) 17, 2201 18 and 2202. 19
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DECLARATORY JUDGMENTS. § 2201. Creation of remedy
(a) In a case of actual controversy within its jurisdiction, except
with respect to Federal taxes other than actions brought under section
7428 of the Internal Revenue Code of 1986, a proceeding under section
505 or 1146 of title 11, or in any civil action involving an antidumping
or 	countervailing 	duty 	proceeding 	regarding 	a 	class 	or 	kind 	of
merchandise of a free trade area country (as defined in section
516A(f)(10) 	of 	the 	Tariff 	Act 	of 	1930), 	as 	determined 	by 	the
administering authority, any court of the United States, upon the filing
of an appropriate pleading, may declare the rights and other legal
relations of any interested party seeking such declaration, whether or not
further relief is or could be sought. Any such declaration shall have the
force and effect of a final judgment or decree and shall be reviewable as
such.
(b) For limitations on actions brought with respect to drug patents
see section 505 or 512 of the Federal Food, Drug, and Cosmetic Act.
28 U.S.C. § 2201.
19Section 2202 of Title 28 provides:
§ 2202. Further relief
Further necessary or proper relief based on a declaratory judgment
or decree may be granted, after reasonable notice and hearing, against
any adverse party whose rights have been determined by such judgment.
28 U.S.C. § 2202.
21
CONCLUSIONS OF LAW
BANKRUPTCY JURISDICTION
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20Section 541(a) provides as follows:
(a) The commencement of a case under section 301, 302, or 303 of this
title creates an estate. Such estate is comprised of all the following
property, wherever located and by whomever held:
(1) Except as provided in subsections (b) and (c)(2) of this section,
22
“Bankruptcy jurisdiction, at its core, is in rem.” Cent. Va. Cmty. Coll. v. Katz,
546 U.S. ___, ___, 126 S.Ct. 990, 995, 163 L. Ed.2d 945, 953 (2006), citing Gardner
v. New Jersey, 329 U.S. 565, 574, 675 S. Ct. 467, 472, 91 L. Ed. 504, 515 (1947)
(“The whole process of proof, allowance, and distribution is, shortly speaking, an
adjudication of interests claimed in a res.” See also Local Loan Co. V. Hunt, 292 U.S.
234, 244, 54 S. Ct. 695, 699, 78 L. Ed. 1230, 1235 (1934) (“Generally, proceedings
in bankruptcy are in nature of proceedings in rem, and orders of discharge are equity
decrees determining a status.”). “A bankruptcy court’s in rem jurisdiction permits it
to ‘determin[e] all claims that anyone, whether named in the action or not, has to the
property or thing in question.’” 	Tennessee Student Assistance Corp. v. Hood, 541
U.S. 440, 448, 124 S. Ct. 1905, 1911, 158 L. Ed.2d 764, 775 (2004), quoting 16 J.
Moore, et al., Moore’s Federal Practice § 108.70[1], p. 108-106 (3d ed. 2004).
“Property of the estate” as set forth in Section 541(a) of the Bankruptcy Code
is an all-encompassing description of the debtor’s interest in property over which the
bankruptcy court has exclusive jurisdiction.20 As was stated in the case of In re
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all legal or equitable interests of the debtor in property as of the
commencement of the case.
(2) 	All 	interests 	of 	the 	debtor 	and 	the 	debtor's 	spouse 	in
community property as of the commencement of the case that is–
(A) under the sole, equal, or joint management and control of the
debtor; or
(B) liable for an allowable claim against the debtor, or for both an
allowable claim against the debtor and an allowable claim against the
debtor's spouse, to the extent that such interest is so liable.
(3) Any interest in property that the trustee recovers under section
329(b), 363(n), 543, 550, 553, or 723 of this title.
(4) Any interest in property preserved for the benefit of or ordered
transferred to the estate under section 510(c) or 551 of this title.
(5) Any interest in property that would have been property of the
estate if such interest had been an interest of the debtor on the date of the
filing of the petition, and that the debtor acquires or becomes entitled to
acquire within 180 days after such date–
(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s
spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit
plan.
(6) Proceeds, product, offspring, rents, or profits of or from
property of the estate, except such as are earnings from services
performed by an individual debtor after the commencement of the case.
23
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(7) Any interest in property that the estate acquires after the
commencement of the case.
11 U.S.C. § 541(a).
21Assuming that the debtor seeks to recover property of the estate from MPA,
this Court would have core jurisdiction over the complaint pursuant to 28 U.S.C. §
157(b)(2)(E) to issue “orders to turn over property of the estate.” Id.
24
Stoltz, 283 B.R. 842, 844 (Bankr.D.Md.2002):
Federal bankruptcy law sets the inclusive bounds of property of
the bankruptcy estate, casting an all-encompassing net over assets of
every kind and description in which a debtor enjoys any interest. 	11
U.S.C. § 541(a). 	Non-bankruptcy state law governs the nature of the
debtor's interest in property. American Bankers Ins. Co. v. Maness, 101
F.3d 358, 362 (4th Cir.1996); Butner v. United States, 440 U.S. 48, 55,
99 S.Ct. 914, 59 L. Ed.2d 136 (1979).
Id.
LOT 90
In order for this Court to have subject matter jurisdiction over the complaint as
it touches upon Lot 90, the debtor’s interest in Lot 90 must be property of the estate.21
As will be recalled, the debtor had only a month-to-month tenancy since before the
petition date, because the terms of the expired lease so provided. 	However, the
debtor’s right to occupy the premises as a tenant holding over is wholly dependent
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22Section 541(b)(2) provides as follows:
(b)(2) 	any interest of the debtor as a 	lessee under a lease of
nonresidential real property that has terminated at the expiration of the
stated term of such lease before the commencement of the case under this
title, and ceases to include any interest of the debtor as a lessee under a
lease of nonresidential real property that has terminated at the expiration
of the stated term of such lease during the case[.]
11 U.S.C. § 541(b)(2).
23§ 8-402. Tenant holding over; liability
(a)(1) A tenant under any periodic tenancy, or at the expiration of
a lease, and someone holding under the tenant, who shall unlawfully
hold over beyond the expiration of the lease or termination of the
tenancy, shall be liable to the landlord for the actual damages caused by
the holding over.
(2) The damages awarded to a landlord against the tenant or
someone holding under the tenant, may not be less than the apportioned
rent for the period of holdover at the rate under the lease.
(3)(i) Any action to recover damages under this section may be
brought by suit separate from the eviction or removal proceeding or in
25
upon the expired lease. Section 541(b) of the Code provides that a lease that expired
before the filing of the bankruptcy petition is not property of the estate. 22
Premier’s tenancy of Lot 90 is terminable at the will of MPA as landlord.
Chesapeake Bank of Maryland v. Monro Muffler/Brake, Inc., 166 Md. App. 695, 891
A.2d 384 (2006); Md. Real Property Code Sections 8-402 (the “tenant holding over”
statute),23 which permits recovery upon a finding that the lease has expired, notice to
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the same action and in any court having jurisdiction over the amount in
issue.
(ii) The court may also give judgment in favor of the landlord for
the damages determined to be due together with costs of the suit if the
court finds that the residential tenant was personally served with a
summons, or, in the case of a nonresidential tenancy, there was such
service of process or submission to the jurisdiction of the court as would
support a judgment in contract or tort.
(iii) A nonresidential tenant who was not personally served with
a summons shall not be subject to personal jurisdiction of the court if
that tenant asserts that the appearance is for the purpose of defending an
in rem action prior to the time that evidence is taken by the court.
(4) Nothing contained herein is intended to limit any other
remedies which a landlord may have against a holdover tenant under the
lease or under applicable law.
(b)(1)(i) Where any tenancy is for any definite term or at will, and
the landlord shall desire to repossess the property after the expiration of
the term for which it was leased and shall give notice in writing one
month before the expiration of the term or determination of the will to
the tenant or to the person actually in possession of the property to
remove from the property at the end of the term, and if the tenant or
person in actual possession shall refuse to comply, the landlord may
make complaint in writing to the District Court of the county where the
property is located.
(ii) 1. The court shall issue a summons directed to any constable
or sheriff of the county entitled to serve process, ordering the constable
or sheriff to notify the tenant, assignee, or subtenant to appear on a day
stated in the summons before the court to show cause why restitution
should not be made to the landlord.
2. The constable or sheriff shall serve the summons on the tenant,
26
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assignee, or subtenant on the property, or on the known or authorized
agent of the tenant, assignee, or subtenant.
3. If, for any reason those persons cannot be found, the constable
or sheriff shall affix an attested copy of the summons conspicuously on
the property.
4. After notice to the tenant, assignee, or subtenant by first-class
mail, the affixing of the summons on the property shall be conclusively
presumed to be a sufficient service to support restitution.
(iii) Upon the failure of either of the parties to appear before the
court on the day stated in the summons, the court may continue the case
to a day not less than six nor more than ten days after the day first stated
and notify the parties of the continuance.
(2)(i) If upon hearing the parties, or in case the tenant or person in
possession shall neglect to appear after the summons and continuance the
court shall find that the landlord had been in possession of the leased
property, that the said tenancy is fully ended and expired, that due notice
to quit as aforesaid had been given to the tenant or person in possession
and that the tenant or person in possession had refused so to do, the court
shall thereupon give judgment for the restitution of the possession of said
premises and shall forthwith issue its warrant to the sheriff or a constable
in the respective counties commanding the tenant or person in possession
forthwith to deliver to the landlord possession thereof in as full and
ample manner as the landlord was possessed of the same at the time
when the tenancy was made, and shall give judgment for costs against
the tenant or person in possession so holding over.
(ii) Either party shall have the right to appeal therefrom to the
circuit court for the county within ten days from the judgment.
(iii) If the tenant appeals and files with the District Court an
affidavit that the appeal is not taken for delay, and also a good and
sufficient bond with one or more securities conditioned that the tenant
27
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will prosecute the appeal with effect and well and truly pay all rent in
arrears and all costs in the case before the District Court and in the
appellate court and all loss or damage which the landlord may suffer by
reason of the tenant's holding over, including the value of the premises
during the time the tenant shall so hold over, then the tenant or person in
possession of said premises may retain possession thereof until the
determination of said appeal.
(iv) The appellate court shall, upon application of either party, set
a day for the hearing of the appeal, not less than five nor more than 15
days after the application, and notice for the order for a hearing shall be
served on the opposite party or that party's counsel at least 5 days before
the hearing.
(v) If the judgment of the District Court shall be in favor of the
landlord, a warrant shall be issued by the appellate court to the sheriff,
who shall proceed forthwith to execute the warrant.
(3)(i) The provisions of this subsection shall apply to all cases of
tenancies at the expiration of a stated term, tenancies from year to year,
tenancies of the month and by the week. In case of tenancies from year
to year (including tobacco farm tenancies), notice in writing shall be
given three months before the expiration of the current year of the
tenancy, except that in case of all other farm tenancies, the notice shall
be given six months before the expiration of the current year of the
tenancy; and in monthly or weekly tenancies, a notice in writing of one
month or one week, as the case may be, shall be so given.
(ii) This paragraph (3), so far as it relates to notices, does not
apply in Baltimore City.
(iii) In Montgomery County, except in the case of single family
dwellings, the notice by the landlord shall be two months in the case of
residential tenancies with a term of at least month to month but less than
from year to year.
28
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(4) When the tenant shall give notice by parol to the landlord or
to the landlord's agent or representatives, at least one month before the
expiration of the lease or tenancy in all cases except in cases of tenancies
from year to year, and at least three months' notice in all cases of tenancy
from year to year (except in all cases of farm tenancy, the notice shall be
six months), of the intention of the tenant to remove at the end of that
year and to surrender possession of the property at that time, and the
landlord, the landlord's agent, or representative shall prove the notice
from the tenant by competent testimony, it shall not be necessary for the
landlord, the landlord's agent or representative to provide a written notice
to the tenant, but the proof of such notice from the tenant as aforesaid
shall entitle the landlord to recover possession of the property hereunder.
This paragraph shall not apply in Baltimore City.
(5) Acceptance of any payment after notice but before eviction
shall not operate as a waiver of any notice to quit, notice of intent to
vacate or any judgment for possession unless the parties specifically
otherwise agree in writing. Any payment accepted shall be first applied
to the rent or the equivalent of rent apportioned to the date that the
landlord actually recovers possession of the premises, then to court costs,
including court awarded damages and legal fees and then to any loss of
rent caused by the holdover. Any payment which is accepted in excess
of the foregoing shall not bear interest but will be returned to the tenant
in the same manner as security deposits as defined under § 8-203 of this
title but shall not be subject to the penalties of that section.
(c) Unless stated otherwise in the written lease and initialed by the
tenant, when a landlord consents to a holdover tenant remaining on the
premises, the holdover tenant becomes a periodic week-to-week tenant
if the tenant was a week-to-week tenant before the tenant's holding over,
and a periodic month-to-month tenant in all other cases.
Id.
29
quit has been given and that the tenant has refused to vacate), cited in Carter v.
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30
Maryland Management Co., 377 Md. 596, 597-8, 835 A.2d 158, 159 (2003); and
Brown v. Housing Opportunities Comm., 350 Md. 570, 714 A.2d 197 (1998).
The bankruptcy court has no authority to resuscitate a lease of real property that
expired by its own terms prepetition, not even pursuant to Section 105 of the Code.
P & J Marketing, Inc. v. Old Chepachet Village, Inc., 142 B.R. 608 (Bankr. D. R.I.
1992). In the case of In re Plaza de Diego Shopping Center, Inc., 911 F.2d 820 (1st
Cir. 1990), the First Circuit stated that “even as a court of equity . . .the bankruptcy
court’s equitable discretion is limited and cannot be used in a manner inconsistent
with the commands of the Bankruptcy Code.” 911 F.2d at 830. Thus, Section 105
“does not authorize the bankruptcy courts to create substantive rights that are
otherwise unavailable under applicable law, or constitute a roving commission to do
equity.” 	Wilner Wood Products Co. v. State of Maine, Dept. of Environmental
Protection, 128 B.R. 1, 3 (D. Me. 1991) (citing United States v. Sutton, 	786 F.2d
1305, 1308 (5 th Cir. 1986).
Similarly, the debtor has no cause of action against MPA pursuant to Section
542 of the Bankruptcy Code to recover non-estate property. Cf. U.S. v. Whiting Pools,
Inc., 462 U.S. 198, 204-6, 103 S. Ct. 2309, 2313-14, 76 L. Ed.2d 515, 522, fn. 8 and
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24 FN 8. 	Section 541(a)(1) speaks in terms of the
debtor's “interests . . . in property,” rather than property in
which the debtor has an interest, but this choice of language
was not meant to limit the expansive scope of the section.
The legislative history indicates that Congress intended to
exclude from the estate property of others in which the
debtor had some minor interest such as a lien or bare legal
title. See 124 Cong. Rec. 32399, 32417 (1978) (remarks of
Rep. Edwards); id., at 33999, 34016-34017 (remarks of
Sen. DeConcini); cf. § 541(d) (property in which debtor
holds legal but not equitable title, such as a mortgage in
which debtor retained legal title to service or to supervise
servicing of mortgage, becomes part of estate only to extent
of legal title); 124 Cong. Rec. 33999 (1978) (remarks of
Sen. DeConcini) (§ 541(d) “reiterates the general principle
that where the debtor holds bare legal title without any
equitable interest, . . . the estate acquires bare legal title
without any equitable interest in the property”). 	Similar
statements to the effect that § 541(a)(1) does not expand the
rights of the debtor in the hands of the estate were made in
the context of describing the principle that the estate
succeeds to no more or greater causes of action against
third parties than those held by the debtor. See H.R. Rep.
No. 95-595, pp. 367-368 (1977). These statements do not
limit the ability of a trustee to regain possession of property
in which the debtor had equitable as well as legal title.
FN10. 	See, e.g., §§ 543, 547, and 548. 	These sections
permit the trustee to demand the turnover of property that
is in the possession of others if that possession is due to a
custodial arrangement, § 543, to a preferential transfer, §
547, or to a fraudulent transfer, § 548. 	We do not now
decide the outer boundaries of the bankruptcy estate. We
31
fn. 10 (1983) (11 U.S.C. § 542 permits the recovery of property of the estate seized
prepetition by a secured creditor, in that case, the Internal Revenue Service). 24
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note only that Congress plainly excluded property of others
held by the debtor in trust at the time of the filing of the
petition. 	See § 541(b); H.R. Rep. No. 95-595, p. 368
(1977); S. Rep. No. 95-989, p. 82 (1978). Although it may
well be that funds that the IRS can demonstrate were
withheld for its benefit pursuant to 26 U.S.C. § 7501
(employee withholding taxes), are excludable from the
estate, see 124 Cong. Rec. 32417 (1978) (remarks of Rep.
Edwards) (Service may exclude funds it can trace), the IRS
did not attempt to trace the withheld taxes in this case. See
Tr. of Oral Arg. 18, 28-29.
Id.
32
LOT 401
As to the debtor’s claim of alleged discrimination based upon the refusal of
MPA to approve Premier’s sublease of Lot 401, this Court has core jurisdiction
pursuant to 28 U.S.C. 157(b)(2)(O), to entertain a suit brought pursuant to 11 U.S.C.
§ 525. In re Hopkins, 66 B.R. 828, 829(Bankr. W.D. Ark. 1986). The claim is a core
proceeding because it arises under Title 11. Blue Diamond Coal Co. v. Angelucci (In
re Blue Diamond Coal Co.), 145 B.R. 895, 906 (Bankr. E.D. Tenn. 1992) (discussing
Fourteenth Amendment due process claim and § 525 claim related to revoking
certificate of self-insurance). “‘Core proceedings are those matters ‘integral to the
core 	bankruptcy function of restructuring of debtor-creditor rights’ including ‘all
necessary aspects of a bankruptcy case.’” Edgcomb Metals Co. v. Eastmet Corp., 89
B.R. 546, 548 (D.Md.1988).” Allnutt v. Assoc. Leasing, Inc. (In re Allnutt ), 220 B.R.
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33
871, 884 (Bankr.D.Md.1998), aff'd, 238 F.3d 410 (4th Cir.2000), cert. denied, 534
U.S. 814 (2001). As a core bankruptcy proceeding, the Eleventh Amendment to the
Constitution does not present a bar to this Court asserting subject matter jurisdiction
over it. 	Cent. Va. Cmty. Coll. v. Katz, 546 U.S. at ___, 126 S.Ct. at 1003-5, 163 L.
Ed.2d at 962-4.
“Section 525(a) evolved from Perez v. Campbell, 402 U.S. 637, 91 S. Ct. 1704,
29 L. Ed.2d 233 (1971), a seminal bankruptcy case in which the Supreme Court struck
down a state statute that withheld driving privileges from debtors who failed to satisfy
motor-vehicle-related tort judgments against them, even if the judgments were
discharged under bankruptcy law.” 	In re Stoltz, 315 F.3d 80, 87 (2d Cir.2002).
Congress codified the result in Perez when it enacted what is now Section 525(a) of
the Bankruptcy Code, prohibiting governmental units from discriminating against
debtors who have filed bankruptcy.
The debtor points to the October 3, 2005 letter from MPA counsel to Mr. Fax
as undeniable proof that MPA has violated Section 525 by basing its refusal to assent
to a sublease by Premier upon the latter’s status as a debtor in bankruptcy. However,
even with this seemingly damning evidence, the debtor cannot prevail. Section 525
requires a showing that the prohibited conduct was based “solely because such
bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under
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25Section 6-204 of the Maryland Transportation Code sets forth the powers and
authority of the MPA:
§ 6-204. General authority of Administration
(a) In addition to the specific powers granted under this title, and
subject to the supervision of the Commission, the Administration has the
powers granted by this section.
(b) The Administration may sue and be sued in its own name.
(c) 	The 	Administration 	may 	propose 	for 	adoption 	by 	the
Commission regulations to carry out the provisions of this title.
(d) Either directly or by expert consultants, the Administration
34
the Bankruptcy Act, has been insolvent before the commencement of the case under
this title, or during the case but before the debtor is granted or denied a discharge, or
has not paid a debt that is dischargeable in the case under this title or that was
discharged under the Bankruptcy Act.” Emphasis supplied. 11 U.S.C. § 525(a). The
letter itself makes clear that the filing of bankruptcy by the debtor was not the only
reason the MPA denied approval of the sublease, although it may have been the
dominant one. Also mentioned was the protracted refusal of the debtor to accept the
terms of a long term lease of Lot 90 proposed by the State. The refusal was not based
upon the failure of the debtor to pay a debt.
The MPA is a State agency created by the Maryland General Assembly and
clothed with comprehensive powers to administer the ports and harbors in the state. 25
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may make any investigations and surveys, including:
(1) Studies of business conditions, freight rates, and port services;
(2) Physical surveys of the conditions of channels and structures;
(3) Studies of the need for additional port facilities to develop,
improve, and more speedily handle commerce; and
(4) Any other study, survey, or estimate necessary for the exercise
of its powers under this title.
(e) The Administration may apply for and receive grants from any
federal agency for the planning, construction, operation, or financing of
any port facility and may receive aid or contributions of money,
property, labor, or other things of value from any source, to be held,
used, and applied for the purposes for which the grants, aid, and
contributions are made.
(f) The Administration may do anything necessary to promote and
increase commerce within its territorial jurisdiction, including:
(1) Purchasing advertising;
(2) Engaging in public relations programs;
(3) Publishing literature;
(4) 	Soliciting 	business 	by 	correspondence 	and 	traveling
representatives; and
(5) Cooperating with civic, technical, professional, and business
organizations and associations.
(g) 	To 	increase 	the 	commerce 	of 	ports 	in 	this 	State, 	the
Administration may establish and maintain a traffic bureau or other
35
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office to investigate and seek improvement in rates, rate structures,
practices, and charges affecting these ports.
(h)(1) Except as provided in paragraph (2) of this subsection, the
Administration may apply for the establishment, maintenance, and
operation of foreign trade zones within its territorial jurisdiction and may
operate and maintain these zones under the laws or regulations of the
United States for the establishment, operation, and maintenance of
foreign trade zones in ports of entry of the United States.
(2) The Administration may not apply for the establishment,
operation, and maintenance of a foreign trade zone unless it has the
specific approval of the Board of Public Works. Approval of the Board
of Public Works shall be based on information and advice, as received
from the Department of Natural Resources, the Department of Business
and Economic Development, other interested agencies of this State, and
the county government of each involved county, on the potential effects
of the foreign trade zone on the water resources, fisheries, and economic
life of this State.
(i) 	The 	Administration 	may 	acquire, 	construct, 	reconstruct,
rehabilitate, improve, maintain, lease as lessor or as lessee, repair, and
operate either directly or through State created private operating
companies port facilities within its territorial jurisdiction, including the
dredging of ship channels and turning basins and the filling and grading
of land.
(j) The Administration may designate the location and character
of all port facilities and improvements that the Administration holds,
owns, or over which it is authorized to act, and it may regulate all
matters related to the location and character of these facilities and
improvements.
(k)(1) In the exercise of its powers and the performance of its
duties under this title, the Administration may acquire and hold in its
own name and may lease, convey, or otherwise dispose of any property,
including:
36
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(i) Lands lying under water;
(ii) Riparian rights in and adjacent to lands; and
(iii) Property devoted to a public use in or near the navigable
waters within the territorial jurisdiction of the Administration.
(2) The acquisition by or on behalf of the Administration of
personal property to be used outside of this State is not subject to Title
4, Subtitle 3 of the State Finance and Procurement Article requiring
purchases through the Department of General Services.
(l) The Administration may fix, revise, charge, and collect rates,
fees, rentals, or other charges for the use of any project under its control.
(m) The Administration may appear in its own behalf before any
board, commission, department, or agency of the federal government, of
any state, or of any international conference and before any committee
of the Congress of the United States or the General Assembly of
Maryland, or any appropriate nongovernmental body, in any matter:
(1) That relates to the design, establishment, construction,
extension, operation, improvement, repair, or maintenance of a project
operated and maintained by the Administration under this title;
(2) That relates to rail rates, water rates, port services and
charges, demurrage, switching, wharfage, towage, pilotage, differentials,
discriminations, 	labor 	relations, 	trade 	practices, 	river 	and 	harbor
improvements, aids to navigation, or permits for structures in navigable
waters; or
(3) That affects the physical development or business
interest of the Administration and those it serves.
(n)(1) The Administration may employ consulting engineers,
accountants, 	attorneys, 	construction 	and 	financial 	experts,
superintendents, 	traveling 	representatives, 	managers, 	clerks,
stenographers, and laborers, and any other agents and employees that it
considers necessary to carry out the provisions of this subtitle.
37
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(2) This subsection does not affect the duties of the Attorney
General specified in § 2-106 of this article.
(o) The Administration may do anything else necessary or
convenient to carry out the powers granted in this title.
(p) The exercise of the powers under this title is an essential
governmental function of the State.
(q)(1) The Administration, with the approval of the Commission,
may create private operating companies for the purpose of operating
public port facilities.
(2)(i) 	The 	Commission 	may 	appoint 	up 	to 	a 	total 	of 	12
management personnel employees to perform services for all private
operating companies created under this subsection.
(ii) Notwithstanding any other provision of law, the Commission
may 	determine 	the 	qualifications 	and 	appointment, 	as 	well 	as
compensation and leave, for employees appointed under this subsection.
(iii) At least 10 days before the effective date of the change, the
Commission shall submit to the Secretary of Budget and Management
each change to the salaries of these employees that involves increases in
salary ranges other than those associated with general salary increases
approved by the General Assembly.
(iv) The Secretary of Budget and Management shall:
1. Review the proposed changes; and
2. Within 10 days of receipt of the proposed changes, advise
the Commission whether the changes would have an adverse effect on
special fund expenditures.
38
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(v) Failure of the Secretary of Budget and Management to respond
in a timely manner is deemed to be a statement that the change will have
no adverse effect.
(vi) 	Employees 	appointed 	under 	this 	subsection 	are 	State
employees and shall be entitled to participate in the retirement and
pension systems for employees of the State of Maryland authorized
under Division II of the State Personnel and Pensions Article.
(vii) On or before December 1 of each year, the Commission shall
report to the Governor and the Legislative Policy Committee of the
General Assembly on actions taken by the Commission under this
subsection during the previous fiscal year with regard to individuals
subject to this subsection.
(3) The budget submitted by the Governor to the General
Assembly shall include personnel detail for the private operating
companies in the form and manner provided for an agency in the State
Personnel Management System.
(4) Other than employees appointed by the Commission under
paragraph (2) of this subsection, employees of a private operating
company created under this subsection are not State employees.
Id.
39
The record is clear that in addition to the fact that the debtor has filed
bankruptcy, the MPA has an interest in maintaining creditworthy tenants in possession
of property at the Terminal. The State through MPA owns and has complete control
over the Terminal and the many tenants who operate businesses there. In this regard,
the instant case is similar to that of Christmas v. Md. Racing Comm'n (In re
Christmas), 102 B.R. 447, 460-81 (Bankr.D.Md.1989), in which this Court upheld the
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2611 U.S.C. § 362(a) provides, as follows:
Section 362. Automatic stay
(a) Except as provided in subsection (b) of this section, a petition
filed under section 301, 302, or 303 of this title, or an application filed
under section 5(a)(3) of the Securities Investor Protection Act of 1970,
operates as a stay, applicable to all entities, of--
(1) the commencement or continuation, including the issuance or
employment of process, of a judicial, administrative, or other action or
proceeding against the debtor that was or could have been commenced
before the commencement of the case under this title, or to recover a
claim against the debtor that arose before the commencement of the case
under this title;
(2) the enforcement, against the debtor or against property of the
estate, of a judgment obtained before the commencement of the case
under this title;
(3) any act to obtain possession of property of the estate or of
property from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property
of the estate;
40
revocation of a horse trainer's license by the State Racing Commission, holding that
horse racing was an industry strictly-regulated by state government for the benefit of
the sport and the economic welfare of the State.
RELIEF FROM THE AUTOMATIC STAY
The Court has core jurisdiction to grant or deny relief from the automatic stay
of 11 U.S.C. § 362,26 pursuant to 28 U.S.C. § 157(b)(2)(G) (motions to terminate,
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(5) any act to create, perfect, or enforce against property of the
debtor any lien to the extent that such lien secures a claim that arose
before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor
that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the
commencement of the case under this title against any claim against the
debtor; and
(8) the commencement or continuation of a proceeding before the
United States Tax Court concerning a corporate debtor's tax liability for
a taxable period the bankruptcy court may determine or concerning the
tax liability of a debtor who is an individual for a taxable period ending
before the date of the order for relief under this title.
11 U.S.C. § 362.
27Section 362(d) provides as follows:
(d) On request of a party in interest and after notice and a hearing, the
court shall grant relief from the stay provided under subsection (a) of this
section, such as by terminating, annulling, modifying, or conditioning
such stay–
(1) for cause, including the lack of adequate protection of an
interest in property of such party in interest;
(2) with respect to a stay of an act against property under
subsection (a) of this section, if–
41
annul, or modify the automatic stay).
The MPA has moved for relief from stay based upon Section 362(d). 27
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(A) the debtor does not have an equity in such property; and
(B) such property is not necessary to an effective reorganization;
(3) with respect to a stay of an act against single asset real estate
under subsection (a), by a creditor whose claim is secured by an interest
in such real estate, unless, not later than the date that is 90 days after the
entry of the order for relief (or such later date as the court may determine
for cause by order entered within that 90-day period) or 30 days after the
court determines that the debtor is subject to this paragraph, whichever
is later–
(A) the debtor has filed a plan of reorganization that has a
reasonable possibility of being confirmed within a reasonable time; or
(B) the debtor has commenced monthly payments that–
(i) may, in the debtor's sole discretion, notwithstanding
section 363(c)(2), be made from rents or other income generated before,
on, or after the date of the commencement of the case by or from the
property to each creditor whose claim is secured by such real estate
(other than a claim secured by a judgment lien or by an unmatured
statutory lien); and
(ii) are in an amount equal to interest at the then applicable
nondefault contract rate of interest on the value of the creditor's interest
in the real estate; or
(4) with respect to a stay of an act against real property under
subsection (a), by a creditor whose claim is secured by an interest in such
real property, if the court finds that the filing of the petition was part of
a scheme to delay, hinder, and defraud creditors that involved either–
(A) transfer of all or part ownership of, or other interest in, such
real property without the consent of the secured creditor or court
approval; or
42
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(B) multiple bankruptcy filings affecting such real property.
If recorded in compliance with applicable State laws governing
notices of interests or liens in real property, an order entered under
paragraph (4) shall be binding in any other case under this title
purporting to affect such real property filed not later than 2 years after
the date of the entry of such order by the court, except that a debtor in a
subsequent case under this title may move for relief from such order
based upon changed circumstances or for good cause shown, after notice
and a hearing. Any Federal, State, or local governmental unit that accepts
notices of interests or liens in real property shall accept any certified
copy of an order described in this subsection for indexing and recording.
11 U.S.C. § 362(d).
28Section 365(a) of the Bankruptcy Code provides as follows:
§ 365. Executory contracts and unexpired leases
(a) Except as provided in sections 765 and 766 of this title and in
subsections (b), (c), and (d) of this section, the trustee, subject to the
court's approval, may assume or reject any executory contract or
unexpired lease of the debtor.
43
Relief from the automatic stay is appropriately accorded to a lessor of property
subject to a lease that expired prepetition because the debtor may only assume an
executory lease in bankruptcy. Prudential Investments Co. v. Physique Forum Gym,
Inc. (In re Physique Forum Gym, Inc.), 27 B.R. 691 (Bankr. D. 1982). An expired
lease is therefore “beyond the pale”of Section 365.28 For purposes of the automatic
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11 U.S.C. § 365.
29Section 362(a) provides:
§ 362. Automatic stay
(a) Except as provided in subsection (b) of this section, a petition
filed under section 301, 302, or 303 of this title, or an application filed
under section 5(a)(3) of the Securities Investor Protection Act of 1970,
operates as a stay, applicable to all entities, of–
(1) the commencement or continuation, including the issuance or
employment of process, of a judicial, administrative, or other action or
proceeding against the debtor that was or could have been commenced
before the commencement of the case under this title, or to recover a
claim against the debtor that arose before the commencement of the case
under this title;
(2) the enforcement, against the debtor or against property of the
estate, of a judgment obtained before the commencement of the case
under this title;
(3) any act to obtain possession of property of the estate or of
property from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property
of the estate;
(5) any act to create, perfect, or enforce against property of the
debtor any lien to the extent that such lien secures a claim that arose
before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor
44
stay, the debtor’s “slight” possessory interest in property is sufficient to trigger the
protection of 11 U.S. C. § 362(a).29 Phoenix Assoc., Inc. v. Pagoda International, Inc.
Case 05-20168 Doc 73 Filed 06/08/06 Page 44 of 52

that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the
commencement of the case under this title against any claim against the
debtor; and
(8) the commencement or continuation of a proceeding before the
United States Tax Court concerning a corporate debtor's tax liability for
a taxable period the bankruptcy court may determine or concerning the
tax liability of a debtor who is an individual for a taxable period ending
before the date of the order for relief under this title.
11 U.S.C. § 362.
45
(In re Pagoda International, Inc.), 26 B.R. 18 (Bankr. D. Md. 1982). To the extent
that the debtor’s month to month tenancy is considered an executory lease, it is a mere
allusion because the debtor’s assumption of it will not provide permanent relief.
There is an additional ground to grant relief from the automatic stay in this case.
The Court finds that Premier filed the instant Chapter 11 bankruptcy petition in bad
faith. See Carolin Corp. v. Miller, 886 F.2d 693 (4th Cir.1989), in which the Fourth
Circuit held that both objective and subjective bad faith must be found in order to find
that a bankruptcy petition was filed in bad faith. To find subjective bad faith, the facts
must indicate that the true motivation of the debtor in filing for bankruptcy relief was
“to abuse the reorganization process” and “to cause hardship or to delay creditors by
resort to the Chapter 11 device merely for the purpose of invoking the automatic stay,
without an intent or ability to reorganize his financial activities.” Carolin, 886 F.2d
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46
at 702, quoting In re Thirtieth Place, Inc., 30 B.R. 503, 505 (BAP 9th Cir.1983). The
finding of objective bad faith requires the Court to determine that the debtor’s
expectations of rehabilitation in the context of a 	bankruptcy case are objectively
futile. Carolin, 886 F.2d at 701.
With respect to subjective bad faith, this Court finds that Premier filed the
instant bankruptcy case for the sole purpose of halting and/or delaying its ultimate
eviction from the Terminal by MPA. 	The debtor was not experiencing financial
difficulties when it filed the petition. As indicated, it was solvent, according to the
information it supplied in its schedules.
The debtor’s only nemesis is MPA, and its dispute did not relate to any claim
by 	MPA 	against 	Premier. 	Cf. 	In 	re 	William 	Steiner, 	Inc., 	139 	B.R. 	356
(Bankr.D.Md.1992) (Filing of Chapter 11 proceeding held to be per se in bad faith,
where debtor, who had no unsecured debts, other than state taxes, which it denied
owing, had no demonstrable need to reorganize, had no legitimate reorganization
purposes, had not exhausted remedies available under state law and was using the
automatic stay to thwart collection of taxes by State.); and In re Fooks, 139 B.R. 623
(Bankr.D.Md.1992) (The filing of a bankruptcy proceeding for the sole purpose of
thwarting Federal tax collection efforts, when other courts (including Federal tax
courts) are available to resolve disputes between taxpayers and taxing authorities,
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47
held, in bad faith, where Chapter 13 debtors had no demonstrable need to reorganize,
no legitimate reorganization purpose and had not exhausted their administrative
remedies.)
The relief sought by Premier in the filing of the complaint was wholly illusory,
because its was not the failure of the State to negotiate in good faith that created the
impasse between the parties, but the inability of the parties to come to terms on a new
lease. 	While the complaint is couched in terms of constitutional deprivations, the
taking of the Building and other deprivations of property were the products of the
agreement of Premier when it entered into the original lease. 	The lease does not
require MPA to compensate Premier for the Building upon termination of the lease.
Premier must have known that any rights it may have had with respect to the
Terminal property were dependent upon the lease and, being based upon the State law
of contract and State-owned real property, would have to be adjudicated through the
administrative processes of the State Courts.
This Court may neither compel MPA to enter into a long term lease with
Premier as to Lot 90, nor compel MPA to agree to Premier’s sublease of Lot 401.
The land in question is State-owned land, under the control and authority of the
MPA, which is a unit of the Maryland State Government, over which the State has
plenary authority to regulate commerce and the operation of businesses. This Court
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48
would not presume to tell the State of Maryland how to operate the Dundalk Marine
Terminal. 	It does not have the authority to tell the State with which tenants to
negotiate or those tenants with whom to execute leases. This Court has no authority
to tell the State that it may or may not enter into a new lease with a competitor of the
debtor. It has no authority to dictate to the State those terms that it must incorporate
in any lease because the State has the complete regulatory power to control the
operation of the Port of Baltimore. The filing of the petition and the instant complaint
were means to the end of tying up the State in endless, fruitless litigation.
As to subjective bad faith, the Court finds that there is no possible mechanism
in bankruptcy by which the debtor can achieve a legitimate reorganization. It has thus
so far, after more than a year, failed to file a plan, and indeed, it acknowledges that no
plan can be filed, let alone confirmed, without the favorable resolution of the litigation
against MPA.
A finding of bad faith in the filing of a bankruptcy petition is sufficient cause
to grant relief from stay against an offending debtor. 	In re Shady Grove Tech Ctr.
Assoc. Ltd. P’ship., 216 B.R. 386, 388 (Bankr. D. Md. 1998) ("circumstances which
form cause for relief from stay may include a bad faith filing of the case."),
supplemented by Mass. Mut. Life Ins. Co., v. Shady Grove Tech Ctr. Assoc. Ltd.
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49
P’ship. (In re Shady Grove Tech Ctr. Assoc. Ltd. P’ship), 227 B.R. 422 (Bankr. D.
Md. 1998).
SUMMARY JUDGMENT
Summary judgment is appropriate when: (1) the pleadings, depositions, answers
to interrogatories, admissions on file and affidavits show that there is no genuine issue
of material fact; and 2) the moving party is entitled to judgment as a matter of law.
In determining the facts for summary judgment purposes, the court may rely on
affidavits made with personal knowledge that set forth specific facts otherwise
admissible in evidence and sworn or certified copies of papers attached to such
affidavits. Fed. R. Civ. P. 56(c); Fed. R. Bankr. P. 7056; Bailey v. Blue Cross & Blue
Shield of Virginia, 67 F.3d 53, 56 (4th Cir. 1995); Miller v. FDIC, 906 F.2d 972, 973
(4th Cir. 1990). As further delineated in a recent decision of the U.S. District Court
for the District of Maryland (Bennett, D.J.):
In Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505,
91 L. Ed.2d 202 (1986), the Supreme Court explained that only “facts
that might affect the outcome of the suit under the governing law” are
material. Anderson, 477 U.S. at 248, 106 S. Ct. 2505. In that context,
a court must consider the facts and all reasonable inferences in the light
most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed.2d 538
(1986). However, “[w]hen the moving party has met its responsibility
of identifying the basis for its motion, the nonmoving party must come
forward with ‘specific facts showing that there is a genuine issue for
trial.’” White v. Rockingham Radiologists, Ltd., 820 F.2d 98, 101 (4th
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50
Cir.1987) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.
Ct. 2548, 91 L. Ed.2d 265 (1986); Fed.R.Civ.P. 56(e)).”
French v. Peninsula Bank, 338 B.R. 668, 673 (D. Md. 2006).
For the reasons stated, the defendants’ motion for summary judgment will be
GRANTED, the complaint will be DISMISSED, and the motion for relief from stayed
filed by MPA will be GRANTED.
ORDER ACCORDINGLY.
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51
cc: 	Charles S. Fax, Esquire
Rifkin, Livingston, Levitan & Silver, LLC
Suite 500
6305 Ivy Lane
Greenbelt, Maryland 20770
Special Counsel to the Plaintiff/Respondent
Joel I. Sher, Esquire
Shapiro Sher Guinot & Sandler
Suite 2000
36 South Charles Street
Baltimore, Maryland 21201
Counsel to the Debtor
Premier Automotive Services, Inc.
2700 Broening Highway
Fifth and B Streets
Baltimore, Maryland 21222
Debtor/Plaintiff/Respondent
Thaddeus Byron Smith, Esquire
Peter W. Taliaferro, Esquire
Assistant Attorneys General
Maryland Port Administration
World Trade Center, 20 th Floor
401 East Pratt Street
Baltimore, Maryland 21202
Attorneys for the Maryland Port Authority and Messrs. Flanigan and Royster
Robert L. Flanagan
Department of Transportation
State of Maryland
7201 Corporate Center Drive
Hanover, Maryland 	21076
Defendant
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52
F. Brooks Royster, III
Maryland Port Administration
World Trade Center
401 East Pratt Street
Baltimore, Maryland 21201
Defendant
Maryland Port Administration
World Trade Center
401 East Pratt Street
Baltimore, Maryland 21201
Defendant/Movant
Mark A. Neal, Esquire
Assistant U.S. Trustee
Office of the United States Trustee
2636 U.S. Courthouse
101 W. Lombard Street
Baltimore, Maryland 21201
Case 05-20168 Doc 73 Filed 06/08/06 Page 52 of 52