584 B.R. 259
Bankr. N.D. Ill.2018Background
- Debtor Daryl Swindle filed Chapter 13 on June 20, 2017; notice was mailed to Parkside and attorney Ebony Lucas on June 23, 2017.
- A state-court order of possession was entered June 23, 2017 (post-petition); enforcement was scheduled but stayed until Aug 24, 2017.
- Parkside (through Ms. Lucas) communicated an imminent eviction to the association and its agents in October 2017; the Debtor learned of a scheduled eviction and took time off work and paid subcontractors in response.
- Debtor's counsel alerted Ms. Lucas to the bankruptcy and warned eviction should not proceed; the eviction was later cancelled but only after the Debtor had suffered lost income and emotional distress.
- Debtor moved for sanctions and a rule to show cause; the court found Ms. Lucas willfully violated the automatic stay by failing to undo the post-petition order of possession and awarded actual damages of $1,652.74 and $1,000 punitive damages (total $2,652.74).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the June 23 order of possession violated the automatic stay | Debtor: petition filed June 20; any post-petition possession order is void | Parkside/Lucas: claimed delay in notice and attempted administrative steps to stop enforcement | Court: order of possession was void ab initio as it continued a judicial proceeding after petition date |
| Whether Ms. Lucas' violation was willful | Debtor: Lucas had notice (June 23) yet failed to timely undo the order and even assisted Sheriff efforts | Lucas: argued she learned later and attempted to notify Sheriff/court; error at Sheriff’s office | Court: violation was willful — knowledge of stay plus failure to restore status quo establishes willfulness |
| Entitlement to actual damages (lost wages, emotional distress) | Debtor: lost income for days preparing/defending eviction; emotional distress from imminent homelessness risk | Lucas: contested facts and claimed good-faith conduct to halt eviction | Court: awarded $1,152.74 lost income and $500 emotional distress ($1,652.74 total) based on testimony and plan status |
| Whether punitive damages are appropriate and amount | Debtor: seek punitive damages for deterrence given attorney’s sophistication and delayed cure | Lucas: argued remedial efforts and lack of malice | Court: punitive damages of $1,000 awarded to deter similar conduct by sophisticated creditor counsel |
Key Cases Cited
- Fidelity Mortg. Investors v. Camelia Builders, Inc., 550 F.2d 47 (2d Cir. 1976) (stay centralizes debtor affairs and prevents conflicting creditor actions)
- Middle Tenn. News Co., Inc. v. Charnel of Cincinnati, Inc., 250 F.3d 1077 (7th Cir. 2001) (acts in violation of the automatic stay are void ab initio)
- Smith v. Albert (In re Smith), 111 F.3d 133 (7th Cir. 1997) (creditor’s affirmative duty to undo stay-violating acts)
- In re Price, 42 F.3d 1068 (7th Cir. 1994) (willfulness requires knowledge of bankruptcy and stay)
- In re Aiello, 239 F.2d 880 (7th Cir. 2001) (discusses interplay of emotional distress awards and financial loss)