Laboy v. Doral Mortgage Corp., No. 09-9022 (1st Cir. 2011)Annotate this Case
While the recording of the deed to mortgaged property was in "limbo" because of a defect, the borrowers declared bankruptcy, resulting in a stay under 11 U.S.C. 362. The lender nonetheless presented a corrected deed for registration. The borrowers filed suit and the court ordered that the deed be withdrawn, but denied damages and fees. The bankruptcy appellate panel affirmed. The First Circuit reversed and remanded, stating that there was no justification for disregarding the statutory language concerning awards of damages and fees for willful violation of a stay.