Bankers Healthcare Group, Inc. v. Bilfield (In re Bilfield)
494 B.R. 292
Bankr. N.D. Ohio2013Background
- Debtors filed Chapter 7; Bankers Healthcare sought to deny discharge and declare a debt nondischargeable.
- Bankers Healthcare admitted stay violations but claimed they were inadvertent; debtors asserted damages.
- Bankers Healthcare had actual notice of the filing via debtor’s phone calls and PACER notice.
- Bankers Healthcare filed a state court collection action six days after bankruptcy filing.
- Process servers repeatedly served the debtors after filing, including at home and at the dental office.
- Court awarded the debtors damages for willful stay violations, including punitive damages and attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Willful stay violation occurred? | Bankers knowingly violated the stay after notice. | Violations were inadvertent; no intent to violate. | Yes; violations were willful. |
| Are actual damages recoverable? | Damages from lost income, travel, and fees. | Limited damages; no proof for full claimed losses. | Damages awarded with limits; some losses rejected. |
| Are emotional distress damages recoverable? | Emotional distress damages allowed when proximate to stay violation. | Emotional damages not proven or sufficiently linked. | Not awarded due to lack of medical corroboration and causal link. |
| Should punitive damages be awarded? | Defendant acted recklessly; punitive damages appropriate. | Policy changes address but do not justify prior conduct. | Punitive damages awarded totaling $10,500. |
| Should attorney fees be awarded? | Fees incurred addressing stay violations should be awarded. | Fees to be resolved on fee application. | To be determined via briefing schedule. |
Key Cases Cited
- In re Daniels, 206 B.R. 444 (Bankr.E.D.Mich.1997) (willful stay violations can be established without explicit intent)
- In re Webb, 472 B.R. 665 (6th Cir. BAP 2012) (agency liability for agents under Stay)
- In re Baer, 2012 WL 2368698 ((unpublished)) (supports damages including punitive where appropriate)
- In re McCool, 446 B.R. 819 (Bankr.N.D.Ohio 2010) (causation and corroboration needed for emotional damages)
- In re Pawlowicz, 337 B.R. 640 (Bankr.N.D.Ohio 2005) (emotional damages require medical corroboration)
- In re Daniels, 206 B.R. 444 (Bankr.E.D.Mich.1997) (repeated violations can establish willfulness)
- Dawson v. Washington Mut. Bank, 390 F.3d 1139 (9th Cir.2004) (emotional damages considerations in stay violations)