Frank Robert Cook

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
FRANK ROBERT COOK,
Debtor.
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Case No. 08-00317
(Chapter 11)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER ADDRESSING MOTION TO AMEND ORDER
AND AMENDING COURT’S ORAL FINDINGS OF FACT AND CONCLUSIONS OF LAW
The debtor Frank Robert Cook has filed a Motion to Amend
Order (supplemented by a later memorandum of law, and by a reply
to Sovereign Bank’s opposition) in which he seeks to amend the
court’s order granting relief from the automatic stay to
Sovereign Bank and the court’s anticipated order reflecting its
oral decision on the debtor’s Motion Seeking Relief for
Violations of the Automatic Stay (the “sanctions motion”). 	This
Memorandum Decision addresses the Motion to Amend Order and also
amends the court’s oral findings of fact and conclusions of law
rendered at the trial of the sanctions motion.
I
Cook has shown no basis for vacating the order granting
relief from the automatic stay of 11 U.S.C. § 362(a). 	The
The document below is hereby signed.
Signed: December 02, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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evidence plainly established both prongs of 11 U.S.C. §
362(d)(2), and, accordingly, relief from the stay was
appropriate. 	Cook’s contention that “the stay should not have
been lifted in the instance [sic] case because the debtor offered
Sovereign adequate protection payments and he offered to cure the
entire post-petition arrearages” is irrelevant. 	Once it was
established that there was no equity in the pleasure boat and
that it was not necessary for an effective reorganization, relief
from the stay under § 362(d)(2) was appropriate.
II
As to the sanctions motion, Cook seeks to set aside the
ruling denying his request for punitive damages and the ruling
regarding actual damages he suffered.
A.
As to punitive damages, Cook contends that:
even after Sovereign received actual notice of the
bankruptcy petition directly from the Court on
approximately May 29, 2008 – Sovereign continued to
maintain possession of the yacht and it failed or
refused to return the vessel to the debtor until
September 10, 2008. 	Sovereign offered no evidence as
to why it waited so long before returning the yacht.
Sovereign did provide such evidence. 	Through inadvertence,
Sovereign’s office that received the notification of the
bankruptcy case neglected to inform Sovereign’s repossession
office of the filing of the case. 	Although it made a notation of
the filing in the company’s electronic system, that notation was
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made too late to be in the system when the repossession office
instructed NPA Associates, a repossession company, to seize the
vessel, and did not come to the attention of the repossession
office until later. 	On June 6, 2008, NPA Associates seized the
vessel on behalf of Sovereign. 	On June 10, 2008, Sovereign’s
attorney in Massachusetts, Lawrence Mullen, having learned of the
filing, informed Cook’s attorney, Andre Barber, that the vessel
would be returned to Cook. 	Sovereign instructed NPA Associates
to return the vessel. 	Sovereign was advised by NPA Associates
that the vessel was being returned. 	But Harbor View Marina
refused to permit the vessel to be returned there. 	NPA
Associates neglected to inform Sovereign of this snag.
Cook learned of Mullen’s conversation with Barber and of
Mullen’s statement that Sovereign would return the vessel, but
neither he nor Barber called Mullen or Sovereign to inquire once
the vessel was not promptly returned.
In addition, during the conversation of June 10, 2008,
Mullen asked Barber what Cook’s intentions would be regarding the
treatment of the vessel in the bankruptcy case, and Barber said
he would get back to Mullen. 	When Barber failed to call back,
Mullen attempted to call Barber on July 15, 2008, but Barber did
not answer the call, and Barber’s voice mail was full. 	Not
having heard from Barber, Mullen assumed that the vessel’s return
was being dealt with in a manner satisfactory to Cook. 	Instead
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1 	Although that knowledge was based on what Liberti had
learned from the repossession agent, NPA Associates, the
testimony was elicited by the debtor. 	In any event, the
testimony went to the state of mind of Sovereign’s
representative, and, in turn, whether Sovereign was refusing to
return the vessel. 	For purposes of punitive damages, the
testimony, even if it had been objected to as hearsay, was
admissible because it demonstrates that Sovereign plainly was
acting in good faith.
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of contacting Mullen when the boat was not promptly returned,
Barber filed Cook’s sanctions motion on July 15, 2008.
When to his shock, Mullen learned on July 21, 2008, of the
sanctions motion filed on July 15, 2008, Mullen made inquiries
and learned that NPA Associates had received the order to return
the vessel on June 9, 2008, but was unable to return the vessel
because Harbor View Marina, from which the vessel had been
seized, was refusing to take the boat back. 	Mullen advised
Sovereign that it should try to get the issue resolved of where
to return the vessel to Cook, and Sovereign initiated steps to
ascertain from Cook where the vessel could be returned.
As Sovereign’s representative Frank J. Liberti testified,
NPA Associates then awaited Cook’s setting up a marina for the
return of the boat. 1 	Moreover, Sovereign’s Exhibit S was
received into evidence without the debtor having articulated any
proper objection to that exhibit. 	That exhibit, a letter of
September 15, 2008, from Sovereign’s attorney to Cook’s attorney,
recites:
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I have yet to receive any response to my
communication of September 3, 2008 requesting a mooring
location where Sovereign Bank may return the yacht to
Mr. Cook. 	I have asked on several occasions that you
provide me with the location to which the Yacht might
be delivered. 	To date, you have failed to respond to
my repeated requests. 	Consistent with our prior
discussions on July 24 and August 19, and my letter
September 3, 2008, Sovereign Bank has attempted to
return the yacht to Mr. Cook’s possession and remains
ready and willing to do so. 	However, because of the
outstanding arrearage, the marina will not accept
delivery of the yacht and Sovereign has no way of
returning the yacht to Mr. Cook until you or your
client provides information as to where the yacht
should be delivered.
With that exhibit in evidence, the record established that as of
July 24, 2008, there had been an attempt by Sovereign to return
the yacht to Cook’s possession, but Cook needed to designate a
marina to which the yacht should be returned. 	Prior to September
15, 2008, Cook failed to designate a marina to which Sovereign
should return the vessel. 	Once Cook designated a marina,
Sovereign encountered delays in the new marina arranging for
receipt of the vessel, and finally on October 10, 2008, the
vessel was delivered to the new marina.
Cook makes much of the fact that he now has evidence that
NPA Associates had paid Cook’s unpaid Harbor View Marina charges
when it repossessed the vessel, and argues that Sovereign is in
error in contending that because of an outstanding arrearage,
Harbor View Marina was refusing to accept delivery of the vessel.
But Cook does not contest the fact that there had been an
outstanding arrearage at the time of the seizure that he had
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failed to pay. 	Even though Cook now has evidence that NPA
Associates paid the arrearage when it seized the vessel, Harbor
View Marina was refusing to allow the vessel to be returned to
Harbor View Marina, and presumably was doing so because of the
arrearage that had been outstanding at the time of the seizure.
If Harbor View Marina was not refusing to accept the return of
the vessel, then Cook could have simply directed that the vessel
be returned to that marina. 	Cook offered no explanation for why,
if Harbor View Marina was willing to accept return of the vessel,
he directed that the vessel be returned to another marina.
Moreover, Sovereign had no reason to refuse to return the
vessel to Cook. 	As Liberti testified, Sovereign incurred more
than $9,000 in storage fees as a result of having seized the
vessel. 	That was a disincentive to hold onto the vessel, and
Cook has not suggested any plausible reason why Sovereign would
have had an incentive to hold onto the vessel.
The evidence that NPA Associates paid the unpaid marina
charges at the time of repossession only clarifies that the
unpaid arrearages had been paid, but does not alter the fact that
Harbor View Marina was refusing to allow Cook to have the vessel
stored there. 	Any error in the court’s thinking that the
outstanding arrearage had not been paid and was still outstanding
after the seizure was an error without consequence. 	Accordingly,
there is no reason to set aside my prior ruling that punitive
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damages are inappropriate.
B.
As to the award of actual damages, Cook requests that the
Court amend its findings to include all amounts that accrued
under the note during the time in which Sovereign had possession
of the yacht. 	But Cook has not demonstrated that the required
payments on the note are equal to the rental value of the yacht.
Without such evidence, there is no way of measuring what Cook
lost by reason of being deprived of use of his yacht. 	Moreover,
he was relieved of storage costs during the period of the
seizure. 	Cook had the burden of establishing his damages, and
failed to present evidence that would allow this court to fix an
appropriate amount of compensation for the period he was deprived
of possession of the vessel. 	Only nominal damages of $1.00 are
thus appropriate for the loss of use of the boat.
III
In my oral decision, I awarded Cook partial compensation for
some of the maintenance expenses he incurred after the return of
the vessel. 	After I issued my oral decision, I immediately had
second thoughts about that award, and intended to set it aside.
As discussed in part II(A) above, Cook was responsible for part
of the delay in the return of the vessel, including the period of
a few days at the end of July, all of August and half of
September. 	He has not demonstrated that any part of the
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maintenance expenses can fairly be allocated to the time that
Sovereign was not awaiting a response from Cook as to where to
return the vessel. 	Had Cook promptly designated a marina for the
return of the vessel, the barnacle growth the vessel suffered
(due to sitting idle) likely would not have occurred.
In any event, even if Sovereign were charged with
maintenance expenses arising from the entire period of the
seizure, the evidence was simply too thin to permit the court
rationally to make an allocation of the maintenance expenses
against Sovereign. 	The charges related to zinc replacement
(something Cook failed to show was necessitated by Sovereign’s
seizure of the vessel) and barnacle removal (which was perhaps
caused by the vessel remaining unused for much of the period of
the seizure). 	But those two categories of charges were not
broken down by Cook into separate charges: they were presented as
a lump sum. 	Any decision regarding those two charges would have
to be on the basis of speculation. 	My assumption at the trial
that the two charges (barnacle removal and zinc replacement)
would be roughly equal, was purely speculative and cannot support
a rational ruling in Cook’s behalf. 	Cook requested a prompt
trial and must suffer the consequences if he was unprepared to
put on competent evidence as to the damages he suffered.
Accordingly, an order follows that will limit Cook’s actual
damages to his reasonable attorney’s fees, a nominal award of
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9	O:\TEEL\Judge Temp Docs\Cook (Frank Robert) Mem Decsn & Order re Mtn to Amend.wpd
$1.00 for the loss of use of the vessel, and the $486.25 in
missing gasoline. 	The parties should confer about the attorney
fees. 	Much of the trial, and of the instant motion, were
unsuccessful attempts to recover punitive damages and certain
actual damages that were not allowed. 	Accordingly, the
reasonable fees ought not include all of the time spent in this
matter.
IV
Pursuant to the foregoing, it is
ORDERED that the court’s oral findings of fact and
conclusions of law regarding Cook’s Motion Seeking Relief for
Violations of the Automatic Stay (Docket Entry No. 57) are
amended to be consistent with the foregoing. 	It is further
ORDERED that Frank Robert Cook’s Motion to Amend Order
(Docket Entry No. 139) is DENIED except that the court’s oral
decision regarding Cook’s Motion Seeking Relief for Violations of
the Automatic Stay is amended to award $1.00 in nominal damages
for the loss of use of the yacht.
[Signed and dated above.]
Copies to: Debtor; Debtor’s attorney; Office of United States
Trustee; Tara L. Elgie, Esq.
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