J & S Properties, LLC v. Phoenician Meditteranean Villa, LLC, No. 16-3366 (3d Cir. 2017)Annotate this Case
J&S sought Chapter 7 bankruptcy protection. The estate's largest asset was an Altoona, Pennsylvania building, in which Phoenician previously operated a restaurant. Trustee Swope rejected Phoenician’s lease to facilitate the building's sale. Phoenician attempted to remove property from the closed restaurant; Swope objected. After learning that Phoenician had canceled its insurance and that heating could be an issue with anticipated frigid weather, Swope met with Phoenician’s principal, Obeid and a contractor. Obeid gave Swope a key to the premises; the contractor recommended that the thermostat be set to 60 degrees. Obeid did not do so, the pipes burst, and the property flooded. A disaster restoration company refused to work on the property. Swope asked for another meeting to assess the damage. Obeid demanded that the meeting be rescheduled and held without J&S's principal, Focht; Swope declined, tried to inspect the premises, and discovered the key Obeid had given her did not work. Focht then had the locks changed. Swope retained the only key and provided both parties with only “supervised access.” Phoenician unsuccessfully sought to regain possession. The court indicated that Swope was protected by the automatic stay, which precluded Phoenician from interfering with the property, and dismissed Phoenician’s suit against Swope under 42 U.S.C. 1983 for wrongful eviction, claiming Fourth and Fourteenth Amendment violations. The Third Circuit agreed that Swope was entitled to qualified immunity and took appropriate action to preserve the Estate Property without violating clearly-established law.