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

Summarized by Joel Newell , Ballard Spahr, LLP
11 years 6 months ago

Citation:

America's Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard) Case No. 12-60052 (9th Cir. CA August 29, 2014)

Tag(s):

Ruling:

Judge Huck delivered the Opinion of the majority. Legal fees incurred defending an appeal by a creditor previously determined to have violated the automatic stay are included in § 362(k)(1)'s definition of actual damages.

Procedural context:

The bankruptcy court denied Schwartz-Tallard's motion seeking an award of attorneys fees as actual damages, and Schwartz-Tallard appealed to the Bankruptcy Appellate Panel ("BAP"). The BAP held that Schwartz-Tallard's attorneys' fees for defending America's Servicing Co. ("ASC") appeal were actual damages under § 362(k)(1). ASC now appeals.

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 motion, the bankruptcy court lifted the automatic stay. Schwartz-Tallard moved to reinstate the stay and the bankruptcy court orally granted the motion on May 13, 2009. ASC did not appear at the hearing. On May 20, 2009, ASC caused Schwartz-Tallard's home to be sold at a trustee's sale. It was not until June 3, 2009—after the property had been sold—that the bankruptcy court entered the written order reinstating the stay. On June 9, 2009, Schwartz-Tallard filed a motion asserting that ASC had violated the automatic stay in her Chapter 13 bankruptcy, and seeking sanctions. Schwartz-Tallard presented evidence that she was current on her mortgage payments through March 2009, but that ASC returned her April 2009 payment with a letter stating that her loan was in foreclosure. Schwartz-Tallard also established that when the bankruptcy court reinstated the stay, she sent ASC the payments for April and May 2009, and enclosed a letter notifying ASC of the stay's reinstatement. Inexplicably, ASC rejected the payments, still asserting that the property was in foreclosure.

Judge(s):

J. Clifford Wallace and Ronald M. Gould, Circuit Judges, and Paul C. Huck, Senior District Judge (for the U.S. District Court for the Southern District of Florida, sitting by designation)

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