America's Servicing Co. v. Schwartz-Tallard (In Re Schwartz-Tallard)

facts different than that addressed in Sternberg. Unlike in Sternberg, where a debtor filed an adversary proceeding in pursuit of damages, the debtor in this case is seeking attorneys’ fees incurred in defense of America’s Servicing Company’s (“ASC”) appeal of the bankruptcy court’s determination that ASC had violated the automatic stay. Because the attorneys’ fees at issue in this case were incurred for a different purpose than those in Sternberg, Sternberg does not prohibit the awarding of the attorneys’ fees at issue here. Moreover, following the reasoning in Sternberg, the fees at issue in this case fall within the meaning of “actual damages” in § 362(k)(1). Therefore, we affirm the

IN RE: SCHWARTZ-TALLARD

Bankruptcy Appellate Panel (“BAP”) and grant Schwartz- Tallard’s request for an award of attorneys’ fees.

I. FACTS

ASC serviced a mortgage on Schwartz-Tallard’s home. On March 30, 2007, Schwartz-Tallard filed for Chapter 13 bankruptcy, but continued to make mortgage payments. ASC believed Schwartz-Tallard had fallen behind on her payments, and moved for relief from the automatic stay to foreclose on the property. On April 6, 2009, following ASC’s…

*1098 ORDER AND OPINION

ORDER

The opinion and dissent in the above-captioned matter filed on April 16, 2014 and published at 751 F.3d 966 are WITHDRAWN. The superseding opinion and dissent shall be filed concurrently with this order.

The parties shall have fourteen (14) days from entry of the superseding opinion to file petitions for rehearing or petitions for rehearing en banc in the above-captioned matter.

IT IS SO ORDERED.

OPINION

The issue on appeal is whether a debtor in bankruptcy can recover, as damages, attorneys’ fees for defending against a creditor’s appeal of a finding that the creditor violated the automatic stay. The Bankruptcy Code provides that “an individual injured by any willful violation of a stay ... shall recover actual damages, including costs and attorneys’ fees.” 11 U.S.C. § 362 (k)(1). We recently held that a debtor’s attorneys’ fees for work on an adversary proceeding seeking damages for a stay violation were not actual damages under § 362. Sternberg v. Johnston, 595 F.3d 937, 948 (9th Cir.2010). In Sternberg , we stated that “the proven injury is the injury resulting from the stay violation itself. Once the violation has ended, any fees the debtor…

dissenting:

I respectfully dissent. Our decision in Sternberg, properly read, controls this case and requires reversal. However, even if it did not control, we should still reverse.

*1103 Although these errors are significant, they solely affect the outcome of this case. More troubling is the BAP’s decision to rely upon one of its own cases, notwithstanding the fact that we had previously rejected the statement of law at issue. The implications of such cavalier disregard by the BAP for its subordinate status within the federal judiciary are far-ranging, and merit much greater attention than the majority bestows on them.

I.

Schwartz-Tallard voluntarily petitioned for Chapter 13 bankruptcy in March 2007 in the Bankruptcy Court for the District of Nevada. In February 2009, America’s Servicing Company (ASC), a creditor of Schwartz-Tallard’s, contended that she failed to make payments on a note held by ASC. ASC moved the bankruptcy court to lift the automatic stay so it could foreclose upon property Schwartz-Tallard owned in which ASC held a security interest. On April 6, 2009, the bankruptcy court vacated the automatic stay so ASC could foreclose on the property.

Schwartz-Tallard…