by The County Animal Control Office did not violate the automatic stay when it refused to return 36 cats it had confiscated from the debtor’s property where it acted within its police and regulatory powers, and the court lacked jurisdiction to order the return of the cats where the trustee had abandoned them. In re Mitchell-Smith, No. 21-57646 (Bankr. N.D. Ga. June 17, 2022).
After the Henry County Animal Control Office (HCAC) took possession of the debtor’s 36 cats and initiated an action against her and her son for costs, she filed for chapter 13 bankruptcy. She listed the cats as property on her schedules and sought to exempt them. Relinquishing its claim for costs, the HCAC moved for relief from stay in order to dispose of the cats according to law. The debtor opposed the motion, sought return of the cats, and moved for sanctions against HCAC for violation of the stay. Before the motion came to hearing, the debtor converted her case to chapter 7. The chapter 7 trustee notified the court of his intention to abandon the cats. Although she missed the deadline to oppose abandonment, the debtor filed numerous motions seeking sanctions and return of the cats. The targets of those motions were the HCAC, as well as Halfway Home Rescue, Inc., and Mew Haven Cat Café, where the HCAC had transferred the cats.
The court held a hearing on the motions. It noted that there was an unresolved issue as to whether the debtor, in fact, owned the cats, but continued its decision on the assumption that she did. It found, however, that the cats were not protected by the automatic stay because their removal fell under the exception to the stay provided for in section 362(b)(4), for “commencement or continuation of an action or proceeding by a governmental unit . . . to enforce such governmental unit’s or organization’s police and regulatory power[.]” The court found HCAC was acting under its police and regulatory powers when it took possession of the cats and transferred them to different entities.
The court additionally found that it lacked jurisdiction over the cats once the trustee abandoned them. Abandonment caused the property to drop out of the estate and “revest[] in the parties with claims to it as if it had never been held by the Trustee, subject to existing claims and liens.” The court therefore lacked the power to order the cats returned to the debtor.
The court found that its holding that HCAC did not violate the automatic stay when it confiscated the cats extended to Halfway Home Rescue, Inc., and Mew Haven Cat Café, when they took the cats in. As neither entity sought to collect a debt in the bankruptcy, they did not independently violate the stay. Additionally, because the cats had been abandoned by the trustee and would have no impact on the chapter 7 case, the court lacked jurisdiction to have the cats returned to the debtor.
The court denied the debtor’s motions to compel.
Mitchell-Smith Bankr ND Ga June 2022