In re Hampton

Toni B. Hampton (debtor) purchased a 1988 Chrysler from Yam’s Choice Plus Autos, Inc. (Yam’s) (creditor) on June 28, 2002. The vehicle, which was subject to a perfected lien from Yam’s and for which Hampton made monthly payments, had a PayTeck device at the time of Hampton’s purchase. The PayTeck device was programmed to disable the starter on the vehicle if a new five-digit code was not entered every 30 days. The buyer could either mail the payment and call for the new code or come to Yam’s office, make the payment, and obtain the code in person. Hampton filed for Chapter 13 bankruptcy on October 8, 2002. Hampton’s bankruptcy plan was confirmed on December 16, 2002, and she made her scheduled Chapter 13 payments. However, Hampton claimed that she could not reliably use the Chrysler since her bankruptcy filing due to the PayTeck device. Hampton alleged that she had been given errant codes several times and that the Chrysler had also failed to start without warning due to the device. While Yam’s argued that Hampton may have misunderstood how to obtain and use the codes or that employee error could have occurred on occasion, Hampton’s testimony painted a different picture. Hampton reported many calls to obtain codes and reported that she was twice told that she “did not deserve the car.” After continuing to have problems starting the car and obtaining codes, Hampton filed an adversary proceeding in the bankruptcy court, seeking compensatory and punitive damages for violation of the automatic stay of bankruptcy. At trial, the bankruptcy court found that Yam’s had violated the automatic stay and was required to cure the violation. A memorandum opinion was issued to clarify the court’s ruling.