614 B.R. 726
Bankr. E.D. Okla.2020Background
- Pamela Sue Christie filed Chapter 13 on December 13, 2010; assets included real estate, a 2006 boat, and a 2006 Jayco travel trailer. Fort Gibson State Bank held secured claims on those items and filed proofs of claim.
- Her confirmed Chapter 13 plan (amended June 3, 2011) provided for full payment (with interest) of the bank’s secured claims and required creditors to release liens upon entry of discharge. The Trustee filed Notice of Completion of Plan Payments on September 21, 2015.
- After plan completion but before entry of discharge, the Bank demanded additional monies before releasing liens; Christie paid $16,600.59 by money orders on December 28, 2015, and the Bank released at least the travel trailer lien (and apparently the boat lien) on December 30, 2015.
- The Bank treated certain postpetition cash advances as adding $6,048.01 to Christie’s travel-trailer loan; the Bank contended loans were cross-collateralized and the amounts were owed. Bank personnel involved in the transactions (loan officer Susan Chapman) did not testify; the Bank’s recordkeeping and accounting were described as sloppy.
- The court found the Bank willfully violated the automatic stay by creating/perfecting/enforcing liens and coercing payment; it awarded Christie $6,048.01 in actual damages, $10,000 in attorneys’ fees, and $317.84 in costs, but declined to award punitive damages.
- The court declined to find a violation of the discharge injunction because the Bank’s collection demands and lien releases occurred before the discharge was entered (discharge entered January 8, 2016).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Automatic stay violation (11 U.S.C. § 362) | Christie: Bank demanded additional postconfirmation payments and withheld lien releases despite plan paying claims in full, coercing payment in violation of the stay. | Bank: Postpetition advances and cross-collateralization justified holding liens and adding amounts to Christie's loan. | Court: Willful violation of § 362(a)(4); Bank coerced payment and extended/enforced liens against estate property. Damages awarded: $6,048.01; attorneys’ fees $10,000; costs $317.84. |
| Discharge injunction (11 U.S.C. § 524) | Christie: Bank’s demands and collection violated the discharge injunction. | Bank: Demands and releases occurred before discharge entry; no § 524 violation. | Court: No violation of § 524(a); actions took place prior to entry of discharge. |
Key Cases Cited
- In re Calder, 907 F.2d 953 (10th Cir. 1990) (actions in violation of the automatic stay are void even without actual notice).
- Johnson v. Smith (In re Johnson), 501 F.3d 1163 (10th Cir. 2007) (elements and willfulness standard for § 362 damages).
- Diviney v. NationsBank of Texas, N.A. (In re Diviney), 225 B.R. 762 (10th Cir. BAP 1998) (willful stay-violation analysis and remedies).
- Kline v. Deutsche Bank N'tl Trust Co. (In re Kline), 472 B.R. 98 (10th Cir. BAP 2012) (discussing willfulness and the creditor’s obligations once aware of bankruptcy proceedings).