In re: Snowden, No. 13-35291 (9th Cir. 2014)Annotate this Case
This appeal stemmed from debtor's listing of a $575 payday loan from CIC. Debtor filed a motion for sanctions in the Bankruptcy Court, alleging that CIC willfully violated the automatic stay provision of the bankruptcy code, 11 U.S.C. 362, and seeking a return of the funds and overdraft fees, emotional distress and punitive damages, and attorneys' fees. On appeal, CIC challenged the district court's emotional distress and punitive damages awards, and debtor cross-appealed the attorneys' fees and sanctions rulings. The court concluded that the district court did not err in confirming the emotional distress award where debtor suffered significant and emotional distress as a result of CIC's actions in cashing the check and in continuing to call her post-petition. The award of punitive damages was not an abuse of discretion where the bankruptcy court reasonably concluded that CIC demonstrated reckless and callous disregard for the law. The court held that a bankruptcy petitioner, such as debtor, could collect attorneys' fees incurred litigating the violation of an automatic stay after the violator sends an e-mail conditionally offering partial reimbursement under section 362(k)(1) where the bankruptcy laws do not permit a stay violator to undermine the remedies available under section 362(k) by forcing a bankruptcy petitioner to accept a conditional offer in lieu of pursuing fair compensation and attorney's fees. Finally, the district court did not abuse its discretion in denying sanctions under its inherent authority when it declined to find that CIC acted in bad faith.