The district court for the southern district of Georgia held that settlement proceeds from post-confirmation violation of the automatic stay under section 362(k) are property of the chapter 13 estate under section 1306(a)(1). Crouser v. BAC Home Loans Servicing, No. 12-156 (S.D. Ga. Aug. 21, 2013). Read More
Tag Archive: automatic stay
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Proceeds of Settlement for Stay Violation Part of Bankruptcy Estate
Posted by NCBRC - September 13th, 2013
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Creditor Must Return Repossessed Vehicle upon Bankruptcy Filing
Posted by NCBRC - May 13th, 2013
The Second Circuit upheld sanctions against vehicle loan creditor, SEFCU, for refusing to return debtor’s repossessed vehicle without a court order and adequate protection. Weber v. SEFCU, No. 12-1632 (May 8, 2013). SEFCU had lawfully repossessed the debtor’s pick-up truck pursuant to the loan agreement but when the debtor filed for bankruptcy SEFCU refused to return the vehicle. The bankruptcy court determined that SEFCU’s actions did not violate the automatic stay. The district court reversed. Weber v. SEFCU, 477 B.R. 308, 311 (N.D.N.Y. 2012). Read More
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Attorney Fees for Litigating Damage Actions Based On Stay Violation
Posted by NCBRC - March 20th, 2013
The Ninth Circuit decision in Sternberg v. Johnston, reared its ugly head to limit recovery of attorney fees in a stay violation action in the recent case of Check Into Cash v. Snowden (In re Snowden), No. 12-1095 (W.D. Wash. March 11, 2013). Snowden came to the district court on appeal and cross-appeal of the Bankruptcy Court’s award of damages for emotional distress and punitive damages resulting from Check Into Cash (CIC)’s violation of the automatic stay.
After affirming both the emotional distress and punitive damage awards the court rejected the debtor’s invitation to revisit its earlier decision in a previous appeal that the award of attorney fees was properly limited, under Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), cert. denied, 131 S. Ct. 102 (2010), to those fees pre-dating the adversary proceeding. Read More
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U.S. Bank Fails to Establish Standing to Seek Relief from Stay to Foreclose
Posted by NCBRC - February 12th, 2013
The Bankruptcy Court for the Southern District of New York denied U.S. Bank’s motion for relief from stay on the basis that U.S. Bank had failed to show that it had standing to obtain such relief. In re Idicula, No. 12-12120 (Bankr. S.D. N.Y. Jan. 10, 2013). Read More
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Sanctions for Willful Violation of the Automatic Stay
Posted by NCBRC - November 25th, 2012
The Bankruptcy Court for the Northern District of Illinois took decisive action to sanction an internationally active telecommunications company, Owtel Inc., for persistent violations of the automatic stay under section 362(a)(6). In re Galutan, No. 12-31837 (Bankr. N.D. Ill. Nov. 16, 2012). The court found that Owtel was informed of the debtor’s bankruptcy filing on August 12, 2012, but continued to dun her for payments of the $74.00 debt with repeated letters and telephone calls to her home phone and cell phone as often as twice a day. Finding that the conduct was willful the court turned to the appropriate damage award under section 362(k). Although the Seventh Circuit does not permit monetary awards for emotional distress the court found actual damages in the amount of $2,940.00 for attorney fees and costs incurred in pursuing the stay violation. In addition, the court found that the egregious nature of Owtel’s relentless pursuit warranted a punitive damage award of $15,000.00. The court ended with the warning that if the violations continue, it would consider further sanctions in the amount of $500.00 per day.
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IRS Refund “Freeze” Not in Violation of Automatic Stay
Posted by NCBRC - September 23rd, 2012
The Sixth Circuit recently affirmed the lower courts’ holding that the IRS’s failure to immediately issue a post-petition tax refund was not a violation of the automatic stay. In re Harchar, No. 10-4201 (6th Cir. Sept. 12, 2012). Read More
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Automatic Stay within One Year of Dismissal of Previous Bankruptcy
Posted by NCBRC - August 3rd, 2012
NCBRC’s Tara Twomey assisted in writing the debtor’s brief in the case of St. Anne’s Credit Union v. Ackell, No. 12-10720 (D. Mass.), arguing that when a debtor files a bankruptcy petition within one year of a dismissal of a previous bankruptcy case, the plain language of section 362(c)(3)(A) provides that the automatic stay lapses after 30 days only as to the debtor and not as to the property of the estate.
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Ninth Circuit BAP Permits Appellate Attorney Fee Award for Stay Violation
Posted by NCBRC - July 5th, 2012
When a debtor is forced to defend both the ruling that the creditor violated the automatic stay and the award of sanctions for that violation, the debtor may recover her appellate attorney fees under section 362(k). Schwartz-Tallard v. America’s Servicing Co., No. 11-1429 (B.A.P. 9th Cir. June 28, 2012). Read More
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$3,000,000.00 Award Against Wells Fargo
Posted by NCBRC - April 6th, 2012
In Charles Dickens’ “A Tale of Two Cities,” there is a scene in which the wealthy Monsieur the Marquis riding in his carriage through a crowd runs over and kills a small, poor, child. When the crowd cries out in outrage, he carelessly throws a few coins out of the window of the carriage with the words, “It is extraordinary to me, that you people cannot take care of yourselves and your children.” With that, he rides on. Thus begins the French Revolution.
For many years, Wells Fargo has been carelessly throwing coins out its carriage window at the debtors overrun by its policies that unfairly compound their already onerous financial burdens. But, debtors, with the help of the courts, are fighting back.
The recent battlefield was the Bankruptcy Court for the Eastern District of Louisiana in the case of Jones v. Wells Fargo Home Mortgage, No. 03-16518 (Bankr. E.D. La, April 5, 2012). In that case Judge Elizabeth Magner reviewed an order for sanctions after remand by the Fifth Circuit, in light of the Fifth Circuit’s decision in Wells Fargo Bank, N.A. v. Stewart (In re Stewart), 647 F.3d 553 (5th Cir. 2011) (finding that Bankruptcy overstepped its mandate in ordering Wells Fargo to audit every case it was involved in in the district). Read More
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BAP’s Consider Appeals of Sanctions Orders
Posted by NCBRC - March 15th, 2012
Creditor’s counsel is appealing an order by the Bankruptcy Court of the Western District of Missouri awarding chapter 7 debtor sanctions in the amount of $1,500.00 as a result of creditor’s violation of the discharge injunction under section 524(a)(2) and (3). In re King, No. 12-6014 (B.A.P. 8th Cir.). The appeal, filed on February 21, 2012, is before the 8th Circuit BAP. The debtor had filed a motion to reopen his bankruptcy case to add the creditor and the underlying debt was thereafter discharged with no objection. The creditor then filed suit in State Court seeking recovery on that debt. After notifying creditor’s counsel of the bankruptcy discharge to no avail, debtor sought sanctions and attorney fees against creditor’s counsel. The creditor’s counsel appeals the bankruptcy court’s denial of creditor’s motion for reconsideration of the court’s order granting sanctions.
The BAP for the 9th Circuit is also considering an appeal of an order granting sanctions against creditors and their counsel in the amount of $11,217 for violation of the automatic stay under section 362(a). In re Knapp, No. 12-1092 (B.A.P. 9th Cir.). Like King, that case involves pursuit of a state court lawsuit against chapter 7 bankruptcy debtor even after debtor’s counsel sought to educate creditor’s counsel about the automatic stay.
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