America's Servicing Company v. Schwartz-Tallard (In re Schwartz-Tallard)
- Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
- 9 years 3 months ago
- Citation:
- In re Schwartz-Tallard, No. 1260052 (9th Cir. Oct. 14, 2015).
- Tag(s):
-
- Ruling:
- A debtor may recover all attorney fees incurred in prosecuting an action for damages under § 362, not just those incurred until the stay violation ceases.
- Procedural context:
- A creditor mistakenly foreclosed on and bought the home of a chapter 13 debtor. On the debtor’s motion, the bankruptcy court ordered the creditor to reconvey the property to the debtor and awarded the debtor economic and emotional distress damages, punitive damages, and attorney fees. The creditor reconveyed the property, but challenged the damages award on appeal to the district court, which affirmed. The creditor did not seek further review of the order. The debtor then asked the bankruptcy court for an award to her, under § 362(k), of additional attorney fees that she had incurred in the district court opposing the appeal. The bankruptcy court denied that request. The debtor appealed to the BAP, which reversed. On further appeal, a divided three-judge panel of the Ninth Circuit affirmed, and on rehearing, the en banc Ninth Circuit also affirmed.
- Facts:
- In 2010, the Ninth Circuit decided Sternberg v. Johnson, 595 F.3d 937 (9th Cir. 2010), where it held that § 362(k) allows a debtor to recover only fees incurred to end a stay violation, not those incurred to prosecute a damages action. But Sternberg misconstrued the plain meaning of § 362(k), and the Ninth Circuit here overrules Sternberg. When a party is entitled to an award of attorney fees in the court of first instance, she is ordinarily entitled to recover fees incurred in successfully defending the judgment on appeal. There is no reason why fee awards under § 362(k) should be subject to a different rule. The debtor is therefore entitled to recover the attorney fees reasonably incurred in opposing the creditor’s appeal in the district court.
- Judge(s):
- Sidney R. Thomas, Chief Judge, Stephen Reinhardt, Diarmuid F. O’Scannlain, M. Margaret McKeown, William A. Fletcher, Richard C. Tallman, Carlos T. Bea, Milan D. Smith, Jr., Sandra S. Ikuta, Paul J. Watford, and Andrew D. Hurwitz, Circuit Judges. Opinion by Judge Watford; concurrence by Judge Bea; dissent by Judge Ikuta.
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