516 B.R. 361
Bankr. S.D. Miss.2014Background
- Debtors filed for Chapter 13 on Feb 21, 2014 and listed Taplin’s claim secured by a 2003 Ford Expedition.
- Repossession of the Ford Expedition occurred on Apr 25, 2014 despite Debtors’ bankruptcy; Debtors informed Taplin and repo agents of the filing.
- Agency: Taplin directed Repo Men; information about the bankruptcy was imputed to Taplin, giving him notice of the stay.
- Amended Motion for Contempt filed Jun 12, 2014; hearings held July 1 and July 29, 2014; other motions (strike, proof of claim, confirmation) were taken up.
- Court found willful stay violation, civil contempt, and awarded damages ($18,834.67 actual; $6,600 punitive) and ordered lien cancellation and title transfer; objections to confirmation overruled; motion to strike denied; C. Adams Objection to Proof of Claim granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Will Taplin violate the automatic stay under §362(k)? | Adams: yes, knowledge via Repo Men and agency; willful violation. | Taplin: no willful violation; lacked intent. | Yes; willful stay violation established. |
| Are civil contempt and damages proper under §362(k) for a willful stay violation? | Debtors entitled to damages, including fees and expenses. | Challenge to size/character of damages. | Civil contempt proven; damages awarded as specified. |
| Reasonableness of attorney’s fees and mitigation of damages under lodestar framework | Fees reasonable at $21,921; seek full recovery. | Fees inflated; block billing and non-relevant entries should be reduced. | Fees reduced to $17,370; total actual damages found $18,834.67 after mitigation. |
| Effect of punitive damages on Taplin’s claim and related plan/claims litigation | Punitive damages warranted; offset against Taplin’s claim. | Argues against punitive damages or offset. | Punitive damages awarded ($6,600); offset cancels lien and satisfies underlying debt; Objection to Confirmation overruled; C. Adams Objection to Proof of Claim granted; Motion to Strike denied. |
Key Cases Cited
- Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. 2008) (auto stay is a self-executing injunction; stay violations may give rise to damages under §362(k))
- In re Chesnut, 422 F.3d 298 (5th Cir. 2005) (stay provides debtor a breathing spell; purpose of automatic stay)
- Young v. Repine, 536 F.3d 512 (5th Cir. 2008) (three-part test for stay violations: knowledge, intent, and violation)
- In re Meinke, Peterson, & Damer, P.C., 44 B.R. 105 (Bankr.N.D.Tex. 1984) (contempt power in civil matters and recoverable damages for willful stay violations)
- Sanchez v. Ameriquest Mortg. Co., 372 B.R. 289 (Bankr.S.D.Tex.2007) (bankruptcy court civil contempt authority and damages authority under §105(a))
- Johnson v. Magee Rentals, Inc., 478 B.R. 235 (Bankr.S.D.Miss.2012) (knowledge of filing can be imputed to principal via agent)
- Burns v. Home Zone Sales & Lease Purchase, LLC, 503 B.R. 666 (Bankr.S.D.Miss.2013) (knowledge, stay issues and damages considerations in Miss. bankruptcy context)