The Bankruptcy Court for the Northern District of Illinois took decisive action to sanction an internationally active telecommunications company, Owtel Inc., for persistent violations of the automatic stay under section 362(a)(6). In re Galutan, No. 12-31837 (Bankr. N.D. Ill. Nov. 16, 2012). The court found that Owtel was informed of the debtor’s bankruptcy filing on August 12, 2012, but continued to dun her for payments of the $74.00 debt with repeated letters and telephone calls to her home phone and cell phone as often as twice a day. Finding that the conduct was willful the court turned to the appropriate damage award under section 362(k). Although the Seventh Circuit does not permit monetary awards for emotional distress the court found actual damages in the amount of $2,940.00 for attorney fees and costs incurred in pursuing the stay violation. In addition, the court found that the egregious nature of Owtel’s relentless pursuit warranted a punitive damage award of $15,000.00. The court ended with the warning that if the violations continue, it would consider further sanctions in the amount of $500.00 per day.
Ninth Circuit BAP Permits Appellate Attorney Fee Award for Stay Violation
When a debtor is forced to defend both the ruling that the creditor violated the automatic stay and the award of sanctions for that violation, the debtor may recover her appellate attorney fees under section 362(k). Schwartz-Tallard v. America’s Servicing Co., No. 11-1429 (B.A.P. 9th Cir. June 28, 2012). [Read more…] about Ninth Circuit BAP Permits Appellate Attorney Fee Award for Stay Violation
$3,000,000.00 Award Against Wells Fargo
In Charles Dickens’ “A Tale of Two Cities,” there is a scene in which the wealthy Monsieur the Marquis riding in his carriage through a crowd runs over and kills a small, poor, child. When the crowd cries out in outrage, he carelessly throws a few coins out of the window of the carriage with the words, “It is extraordinary to me, that you people cannot take care of yourselves and your children.” With that, he rides on. Thus begins the French Revolution.
For many years, Wells Fargo has been carelessly throwing coins out its carriage window at the debtors overrun by its policies that unfairly compound their already onerous financial burdens. But, debtors, with the help of the courts, are fighting back.
The recent battlefield was the Bankruptcy Court for the Eastern District of Louisiana in the case of Jones v. Wells Fargo Home Mortgage, No. 03-16518 (Bankr. E.D. La, April 5, 2012). In that case Judge Elizabeth Magner reviewed an order for sanctions after remand by the Fifth Circuit, in light of the Fifth Circuit’s decision in Wells Fargo Bank, N.A. v. Stewart (In re Stewart), 647 F.3d 553 (5th Cir. 2011) (finding that Bankruptcy overstepped its mandate in ordering Wells Fargo to audit every case it was involved in in the district). [Read more…] about $3,000,000.00 Award Against Wells Fargo