509 B.R. 523
E.D. Va.2014Background
- On Oct 19, 2012, Loudoun County General District Court entered an in personam judgment against Debtor Hafer in favor of Skillforce for $12,997.11.
- On Dec 27, 2012, Tichenor, as Skillforce's counsel, filed a summons to answer debtor’s interrogatories directed to Hafer and a subpoena for documents.
- On Feb 6, 2013, Hafer filed a Chapter 7 bankruptcy; Hafer listed Skillforce as creditor and filed a proof of claim.
- At the Feb 6 hearing, Hafer disclosed the bankruptcy; the State Court stayed the proceeding but continued the interrogatories for a status hearing.
- Tichenor did not press to proceed or request a status continuation; the judge sua sponte continued to May 1, 2013.
- May 1, 2013 was a status hearing; Hafer later received a discharge on May 20, 2013; Skillforce sought dismissal as discharged on May 28 and August 23, 2013.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May 1 status hearing continuation violated automatic stay | Hafer: continuation violated stay | Skillforce/Tichenor: status hearing ministerial/appropriate | Yes, violated stay; remand for damages findings |
| Whether the violation was willful | Hafer: knowledge of stay; intentional act | Skillforce/Tichenor: lack of willfulness | Willful; affirmed the finding of a stay violation |
| Damages for the stay violation | Lost time and fees were incurred and reasonable | Evidence insufficient and fees may not be recoverable | Remand for specific damages findings (hourly rate and actually incurred fees) |
Key Cases Cited
- Dornier Aviation (N. Am.), Inc. v. Dornier Aviation, 453 F.3d 225 (4th Cir. 2006) (legal standard for de novo/factual review of stay violations)
- In re Williams-Nobles, 459 B.R. 242 (Bankr.E.D.Va. 2011) (creditor's duty to stop downhill snowballing of continuing garnishment)
- Budget Serv. Co. v. Better Homes, 804 F.2d 289 (4th Cir. 1986) (willfulness requires knowledge of the stay and intentional act)
- In re Seaton, 462 B.R. 582 (Bankr.E.D.Va. 2011) (actual damages must be proven by preponderance)
- In re Atlas Machine & Iron Works, Inc., 239 B.R. 322 (Bankr.E.D.Va. 1998) (foreclosure-postponement notices preserve status quo; not stay violation)