In re: JARED TRENTON COWEN, Debtor.
JARED TRENTON COWEN, Appellee. WD EQUIPMENT, LLC; AARON WILLIAMS; BERT DRING, Appellants,
from the United States District Court for the District of
Colorado (D.C. No. 1:14-CV-02408-REB)
Alexander M. Musz of Cohen & Cohen, P.C., Denver,
Colorado, for Defendants- Appellants.
Todd Morse of Morse Law, LLC, Denver, Colorado, for
KELLY, McKAY, and McHUGH, Circuit Judges.
Jared Trent Cowen's 2000 Peterbilt 379, a commercial
truck, was in need of repair. To cover the cost, Mr. Cowen
borrowed money from Defendant WD Equipment, which is owned
and managed by Defendant Aaron Williams, in exchange for a
lien on the truck and the promise of repayment. After the
Peterbilt broke down again only a few weeks after the
repairs, it was towed to a local repair company, which
estimated that fixing the truck again would cost $9, 000-more
than Mr. Cowen could afford.
his Peterbilt was in the shop, Mr. Cowen could not make
installment payments to WD Equipment. So, in early August,
2013, Mr. Cowen began taking steps to refinance the loan; he
met with his bank and with his parents in an attempt to
secure refinancing, and he exchanged several text messages on
August 1 and 2 with Mr. Williams about paying off the loan.
During the course of that exchange, however, Mr. Williams
gave Mr. Cowen several, contradictory responses as to how
much Mr. Cowen would need to pay to settle the debt, and he
accelerated the payoff date several times, before ultimately
setting August 6 as the deadline.
the same time, Mr. Cowen defaulted on another loan secured by
another one of his trucks, a 2006 Kenworth T600. This loan
was owed to Defendant Bert Dring, the father-in-law of Mr.
Williams, who held a purchase-money security interest in the
truck. On July 29, Mr. Dring lured Mr. Cowen under false
pretenses to his place of business to repossess the Kenworth.
Mr. Dring asked Mr. Cowen, who had brought along his young
son, to leave the keys in the ignition, engine running, and
to step out of the truck. As Mr. Cowen exited the vehicle,
Mr. Dring jumped in, grabbed the keys, and declared the truck
"repossessed." When Mr. Cowen asked what was going
on, Mr. Dring told him to take his son and leave-immediately.
A group of five men gathered around Mr. Dring while he
brandished a can of mace above his head and threatened to use
it if Mr. Cowen did not leave. Mr. Cowen pushed his young son
behind him to protect him, and the two left the lot on foot.
Three days later, Mr. Cowen received a letter from Mr. Dring
giving him ten days to pay off the Kenworth.
Mr. Cowen filed a voluntary petition for relief under Chapter
13 of the Bankruptcy Code on August 6, which was the deadline
for paying off the Peterbilt, and which was within the
ten-day cure period for the Kenworth. He notified Defendants
of the filing and requested the immediate return of both
trucks. But Defendants refused: Mr. Williams claimed that he
had changed the title to his name on August 1. (At no time
during the text message exchanges on August 1 and 2 did Mr.
Williams ever inform Mr. Cowen of the title change.) And Mr.
Dring claimed that he sold the Kenworth sometime prior to the
bankruptcy filing. (Initially, he claimed he had sold the
Kenworth to an unknown Mexican national for cash in an
undocumented sale just days before Mr. Cowen filed for
bankruptcy. Later, Mr. Dring produced bill of sale,
purporting to show that he sold the Kenworth to a Mr. Garcia
for $16, 000 in cash on August 4.)
month later, Mr. Cowen moved the bankruptcy court for orders
to show cause why Defendants should not be held in contempt
for willful violations of the automatic stay. The bankruptcy
court granted the motions and ordered Defendants to
"immediately turn over" the trucks to Mr. Cowen;
"[c]ontinuing failure to turn over the Truck[s], "
the bankruptcy court warned, "may result in the
imposition of monetary damages against the Creditors for
willful violation of the automatic stay." Order on
Motion for Order to Show Cause and Order to Turnover Property
of the Estate, Case No. 13-23461 (Bankr. Colo. Sept. 5,
Defendants did not comply with the bankruptcy court's
turnover order, Mr. Cowen filed an adversary proceeding for
violations of the automatic stay. A few months later, the
bankruptcy court dismissed the underlying bankruptcy case
because, without the trucks, Mr. Cowen had no regular income,
which rendered him ineligible for Chapter 13 relief. However,
the bankruptcy court expressly retained jurisdiction over the
the adversary proceeding, Defendants again asserted that Mr.
Cowen's rights in the trucks had been properly terminated
by Defendants before the bankruptcy petition was
filed, and so they could not have violated the automatic
stay. But the bankruptcy court "did not find the
Defendants' testimony that they had transferred title
before the petition date to be credible." (App. Vol. II
at 248.) It went on to "find[ ] that they manufactured
the paperwork . . . after the bankruptcy filing."
(Id.) "Defendants likely forged documents and
gave perjured testimony" and "coached their
witnesses on what to testify to during [ ] breaks" in an
"attempt to convince the Court that [Mr. Cowen's]
rights in the Trucks had been terminated
pre-bankruptcy." (Id. at 258.) Additionally,
the bankruptcy court held that "even if they had taken
the actions they claim to have taken before the bankruptcy
filing, " (id. at 269), such actions
contravened Colorado law, and therefore did not effectively
terminate Mr. Cowen's "ownership interest in the
Trucks, " (id. at 252). And so, the bankruptcy
court concluded, "[f]ailing to return the Trucks
violated § 362(a)(3) of the Bankruptcy Code, "
(id.), and it imposed actual and punitive damages
under 11 U.S.C. § 362(k)(1).
timely appealed this decision to the district court, which
reversed on the calculation of damages but otherwise affirmed
the bankruptcy court's order. Defendants then appealed to
this Court, arguing, among other things, that the bankruptcy
court exceeded its jurisdiction, that it lacked
constitutional authority to enter a final judgment in this
adversary proceeding, and that the bankruptcy court
misinterpreted § 362-the automatic stay provision.
"[T]hough this appeal comes to us from the district
court, we review a bankruptcy court's decisions
independently, examining legal determinations de novo and
factual findings for clear error." FB Acquisition
Prop. I, LLC v. Gentry (In re Gentry), 807 F.3d 1222,
1225 (10th Cir. 2015). "In doing so, we treat the
bankruptcy appellate panel or district court as a subordinate
appellate tribunal whose rulings are not entitled to any
deference (although they may certainly be persuasive)."
Nelson v. Long (In re Long), 843 F.3d 871, 873 (10th
Cir. 2016) (internal quotation marks omitted). "A
bankruptcy court's legal conclusions are reviewed de
novo, while its factual findings are reviewed for clear
address first the bankruptcy court's jurisdiction.
"The jurisdiction of the bankruptcy courts, like that of
other federal courts, is grounded in, and limited by,
statute." Celotex Corp. v. Edwards, 514 U.S.
300, 307 (1995). By statute, bankruptcy courts have
jurisdiction to "enter final judgments in 'all core
proceedings arising under title 11, or arising in a case
under title 11.'" Stern v. Marshall, 564
U.S. 462, 474 (2011) (quoting 28 U.S.C. § 157(b)(1)). As
we have explained, a claim for damages under § 362(k)(1)
for a violation of an automatic stay is a core proceeding.
Johnson v. Smith (In re Johnson), 575 F.3d 1079,
1083 (10th Cir. 2009) (holding that a "§ 362(k)(1)
proceeding . . . is a core proceeding because it derives
directly from the Bankruptcy Code and can be brought only in