Snowden v. Check Into Cash of Washington Inc. (In Re Snowden)

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN THE MATTER OF: RUPANJALI No. 13-35291

SNOWDEN,

Debtor, D.C. No. 2:12-cv-01095-

RSL

RUPANJALI SNOWDEN, Debtor, Appellant,

v.

CHECK INTO CASH OF WASHINGTON

INC.,

Appellee.

IN THE MATTER OF: RUPANJALI No. 13-35322

SNOWDEN,

Debtor, D.C. No. 2:12-cv-01095-

RSL

CHECK INTO CASH OF WASHINGTON

INC.,

Appellant, OPINION

v.

RUPANJALI SNOWDEN, Debtor, Appellee. IN RE: SNOWDEN

Appeal from the United States District Court for the Western District of Washington Robert S. Lasnik, District Judge, Presiding

Argued and Submitted June 5, 2014—Seattle, Washington

Filed September 12, 2014

Before: Alfred T. Goodwin, M. Margaret McKeown, and Paul J. Watford, Circuit Judges.

Opinion by Judge McKeown; Concurrence by Judge Watford

SUMMARY*

Bankruptcy

The panel affirmed in part and reversed in part the district court’s affirmance of the bankruptcy court’s judgment awarding a chapter 7 debtor damages and attorneys’ fees for a creditor’s willful violation of the automatic stay under 11 U.S.C. § 362(k)(1).

The panel affirmed the district court’s affirmance of…

Opinion by Judge McKEOWN; Concurrence by Judge WATFORD.

OPINION

This is the story of how a bankruptcy filing listing a $575 payday loan snowballed into a violation of the automatic stay, and protracted litigation, which left a stressed borrower with attorneys’ fees and emotional distress. When the automatic stay that accompanies a bankruptcy filing is violated, the bankruptcy petitioner is entitled to recover damages and attorneys’ fees. 11 U.S.C. § 362 (k)(l). The issue we consider is whether a bankruptcy petitioner can collect attorneys’ fees incurred litigating the violation of the automatic stay after the violator sends an e-mail conditionally offering partial reimbursement. We conclude that such fees are recoverable under § 362(k)(l). The bankruptcy laws do not permit a stay violator to undermine the remedies available under § 362(k) by forcing a bankruptcy petitioner to accept a conditional offer in lieu of pursuing fair compensation and attorneys’ fees.

Background AND Procedural History

Rupanjali Snowden took out a $575 payday loan 1 from Check Into Cash of Washington (“CIC”) to make ends meet for herself and her daughter. Before payment was due, Snowden put a stop…

concurring:

I join the court’s opinion and write separately to add a few words on the attorney’s fees issue.

I agree with my colleagues that the fees award must be vacated, but it’s hard to fault either the bankruptcy court or the district court for that. Our court has made calculating attorney’s fees under 11 U.S.C. § 362 (k)(l) unnecessarily complicated. The problem stems from our decision in Sternberg v. Johnston, 595 F.3d 937 (9th Cir.2010), where we construed § 362(k)(l)’s authorization of fee awards more narrowly than Congress likely intended. 1 Read most naturally, the statute allows a plaintiff to recover attorney’s fees incurred both in remedying a violation of the automatic stay and in bringing an action to recover the “actual damages” caused by that violation. That’s the sensible reading of the statute the Fifth Circuit adopted. In re Repine, 536 F.3d 512, 522 (5th Cir.2008). In Sternberg , however, we rejected that reading and held instead that § 362(k)(l) imposes, a temporal limit on the plaintiffs right to recover attorney’s fees, such that no fees may be recovered for any work performed after the stay violation has ended. 595 F.3d at 947 . Thus, under our reading…