588 B.R. 625
Bankr. M.D. Ala.2018Background
- Debtor Stacey H. Brodgen filed Chapter 13 on March 31, 2017; her Plan proposed to treat Holmes Motors as a secured creditor and pay $502/month on a 2007 Chevrolet Tahoe that Holmes claimed an interest in.
- Court mailed notice of the bankruptcy and Plan to Holmes; Brodgen also told Holmes' collection agent ("Chris") and dealership employees that she had filed bankruptcy.
- After the filing Holmes made ~100 phone calls and ~10 texts demanding payment and, on April 12, 2017, its agents attempted to repossess the Tahoe at Brodgen’s workplace, then blocked the vehicle at the dealership and coerced a $703 payment to release it.
- Brodgen sought medical care for stress, missed 10 days of work (computed at $11.77/hr for $941.60), and claimed emotional distress and other harms.
- The Court found Holmes received notice, willfully violated the automatic stay by repeated collection efforts and repossession, and awarded actual damages ($703 + $941.60 + $10,000 emotional distress = $11,644.60), punitive damages ($23,289.60), and attorneys’ fees to be determined.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Holmes violate the automatic stay? | Brodgen: repeated collection calls/texts and repossession were acts to exercise control/collect prepetition claim. | Holmes: lease terminated / vehicle not estate property; alternatively, any violation was inadvertent due to lack of notice. | Court: Stay was violated; Holmes had notice from the Court and debtor; violation sustained. |
| Was the violation willful? | Brodgen: Holmes knew of the filing (notice + debtor's warnings) and intentionally acted. | Holmes: denial of knowledge; any violation was inadvertent. | Court: Willful — knowledge plus intentional acts satisfied. |
| Are emotional distress/actual damages recoverable and what amount? | Brodgen: medical treatment, missed wages, stress from harassment and repossession. | Holmes: contested severity and amount. | Court: Awarded $703 (extracted payment) + $941.60 (lost wages) + $10,000 (emotional distress) = $11,644.60. |
| Are punitive damages appropriate and amount? | Brodgen: Holmes’ pattern, calculated conduct, and prior similar conduct justify punishment/deterrence. | Holmes: argued punitive damages unwarranted/too high. | Court: Punitive damages appropriate; awarded $23,289.60 (≈ double actual damages exclusive of fees). |
Key Cases Cited
- Jove Eng'g. Inc. v. IRS, 92 F.3d 1539 (11th Cir. 1996) (willfulness defined as knowledge of stay plus intentional act regardless of intent to violate stay)
- Lodge v. Kondaur Capital Corp., 750 F.3d 1263 (11th Cir. 2014) (criteria for emotional distress damages for stay violations)
- Mantiply v. Horne (In re Horne), 876 F.3d 1076 (11th Cir. 2017) (attorney's fees are recoverable as actual damages under § 362(k))
- Parker v. Credit Cent. South (In re Parker), [citation="634 F. App'x 770"] (11th Cir. 2015) (willful stay violation requires proof by preponderance; actual damages mandatory)
- Cent. Miss. Credit Corp. v. Vaughn, 555 B.R. 803 (M.D. Ala. 2016) (factors and caution in setting punitive damages for stay violations)
- In re White, 410 B.R. 322 (Bankr. M.D. Fla. 2009) (awarding per-call emotional distress damages after notice of bankruptcy)
- In re Hildreth, 357 B.R. 650 (Bankr. M.D. Ala. 2006) (awarding $100 per improper telephone call as emotional distress damages)
- In re McBride, 473 B.R. 813 (S.D. Ala. 2012) (prior Holmes repossession case finding willful stay violation; discussion of punitive damages)