478 B.R. 235
Bankr. S.D. Miss.2012Background
- Debtor Touya Johnson filed a Chapter 13 petition on June 10, 2011; Magee Rentals was listed as a secured creditor with a TV cabinet collateral valued at $1,000.00 and a claimed amount of $1,700.00.
- Magee Rentals allegedly violated the automatic stay by post-petition debt collection efforts, including door hangers at the Debtor’s home (Sept. 1, 12, 19, 2011) and telephone calls.
- The store’s policy on bankruptcy notices was disputed; Debtor testified Magee Rentals knew of the filing via oral notice, while Magee Rentals argued written notice was required for knowledge.
- Debtor sought damages including lost wages, travel expenses, emotional distress, and attorney’s fees, plus punitive damages; Magee Rentals argued against liability or excessive damages.
- The Court found willful stay violation by Magee Rentals, awarded capped actual damages of $3,300 after mitigation, denied punitive damages, and awarded $13,215 in attorney’s fees as part of the mitigation discussion, with total actual damages summing to a reduced amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Knowledge of the stay element | Johnson argues oral notice suffices to establish knowledge. | Magee Rentals argues only written Clerk-confirmed notice establishes knowledge. | Oral notice sufficient to establish knowledge (no clerks’ written notice required). |
| Willfulness and violation of the stay | Magee Rentals intentionally pursued collection after learning of bankruptcy. | Actions were not willful violations; policy complied with law. | Magee Rentals willfully violated the automatic stay. |
| Damages and mitigation | Debtor seeks full damages including emotional distress and attorney’s fees. | Damages should be limited or mitigated due to Debtor’s actions. | Actual damages capped at $3,300 after mitigation; punitive damages denied. |
| Attorney’s fees | Entitled to reasonable fees incurred prosecuting § 362(k). | Fees should be carefully evaluated for reasonableness. | Lodestar reasonable; fees evaluated but overall damages capped; $13,215 considered reasonable in context. |
Key Cases Cited
- Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. 2008) (establishes willful stay violation standard and damages remedy under § 362(k))
- In re Chesnut, 422 F.3d 298 (5th Cir. 2005) (purpose of automatic stay and breathing spell considerations)
- In re Repine, 536 F.3d 512 (5th Cir. 2008) (egregious conduct standard for punitive damages under § 362(k))
- In re Cahill, 428 F.3d 536 (5th Cir. 2005) (lodestar method and Johnson factors for attorney’s fees)