Summary:
The Debtor filed Chapter 13 on January 22, 2012, after Reliable Motors repossessed a vehicle four days earlier. The Debtor’s attorney both sent notice of the bankruptcy and was called Reliable that day. The Debtor went to Reliable car lot a few days later, seeking to regain possession of the vehicle, but Reliable refused to return the vehicle. On February 3, 2012, Reliable was again provided notice of the case, proof of insurance on the vehicle and evidence that the Debtor had made his first payment under the proposed plan. Reliable continued to refuse to return the vehicle, even up to the date of the Motion for Turnover and Sanctions on March 8, 2012.
The bankruptcy court found that the Debtor had met the requirements for requiring turnover of the vehicle, by showing regular employment and providing adequate protection in the form of both car insurance and a first plan payment.
The imposition of sanctions or damages for a willful violation of the automatic stay requires a showing that:
(1) the conduct at issue constituted a violation of the automatic stay;
(2) the violation was willful; and
3) the debtor was injured as a result of the violation.
The willfulness need not, however, include a specific intent to harm the Debtor, but “[i]t is sufficient to show that the party knew of the existence of the bankruptcy case and that the creditor's actions
were intentional.” See In re Sharon, 200 B.R. 181, 200 (Bankr. S.D. Ohio 1996).
Accordingly, due to the repeated notices and attempts to regain possession of the vehicle, the bankruptcy court found that Reliable had willfully violated the automatic stay. Actual damages for a such a violation are mandatory, See Davis v. IRS, 136 B.R. 414, 423 n.20 (E.D. Va. 1992), and consisted of $2,630 in attorney’s fees. Further, because Reliable had demonstrated egregious, vindictive and intentional misconduct, punitive damages were appropriate in the amount of $3,500.
Commentary:
This case is on appeal to the district court.
For a copy of the opinion, please see:
Sauls- Failure to Turnover Repossessed Vehicle.pdf
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