In re Harrison, 599 B.R. 173

Background

Debtor Dahlia Harrison filed Chapter 13 on March 26, 2018—one day before a scheduled foreclosure sale of her claimed homestead (the Chipley Property).
Despite notice of the bankruptcy filing (Debtor delivered petitions to state counsel and the county clerk), Deltona proceeded with the foreclosure sale on March 27, 2018 and was sole bidder.
Deltona obtained a certificate of title, changed locks, posted no-trespassing signs, turned off utilities, and kept Debtor out of the property for ~94 days post‑petition.
Debtor, proceeding pro se, filed a sanctions motion; Deltona and its bankruptcy counsel (Fuqua & Milton) delayed admitting the sale and took no immediate action to undo the post‑petition possession.
After evidentiary hearings, the bankruptcy court found Deltona and its counsel willfully violated the § 362 automatic stay, awarded compensatory (including emotional distress) and punitive damages, and ordered counsel to show cause why additional Rule 9011 sanctions should not be imposed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the post‑petition foreclosure sale and continued possession violated the automatic stay and were willful	Harrison: sale and continued lockout occurred with actual notice of petition; failure to undo conduct makes violations willful	Deltona: initial sale was mistake of state counsel; argued stay annulled or Debtor acted in bad faith	Court: Violations occurred and were willful; knowledge + intentional acts satisfied Eleventh Circuit willfulness test
Whether bankruptcy counsel should be liable for stay violations	Harrison: counsel learned of sale on appearance and failed to undo it; their inaction and misleading filings aided continuing violations	Counsel: asserted legal grounds (bad faith, stay annulled) and did not immediately vacate sale	Court: Counsel willfully violated stay by failing to act and making false/misleading representations; liable under § 362(k) and § 105(a)
Whether Debtor proved emotional distress damages without medical evidence	Harrison: proved significant, non‑fleeting distress via testimony, video, and corroboration of conduct (lockout, stalking, law‑enforcement encounter)	Deltona: argued medical evidence required or distress was insufficient (relied on Lodge)	Court: Emotional distress awarded—evidence met Eleventh Circuit standard for significant distress; medical proof not required for egregious violations
Whether punitive damages and other sanctions are appropriate	Harrison: defendants acted egregiously, vindictively, and in bad faith—punitive damages needed to deter	Deltona: challenged multiplier limits and sought offset against amounts due under foreclosure judgment	Court: Punitive damages appropriate as conduct was egregious; offset denied (no mutuality/equity); counsel ordered to show cause re: Rule 9011 sanctions

Key Cases Cited

In re Horne, 876 F.3d 1076 (11th Cir. 2017) (attorney liability and inclusion of attorney fees in § 362(k) actual damages)
Lodge v. Kondaur Capital Corp., 750 F.3d 1263 (11th Cir. 2014) (standards for emotional distress damages under § 362(k))
In re Soares, 107 F.3d 969 (1st Cir. 1997) (automatic stay operates immediately upon filing)
Jove Eng’g, Inc. v. I.R.S., 92 F.3d 1539 (11th Cir. 1996) (court may impose sanctions under inherent authority)
Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004) (creditor knowledge of stay sufficient for willfulness analysis)
In re Lansaw, 853 F.3d 657 (3d Cir. 2017) (emotional distress may be recoverable as actual damages under § 362(k))
Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) (Supreme Court discussion of punitive/compensatory ratios)