This matter is before the Court following the judgment of the United States Bankruptcy Appellate Panel (the “BAP”), reversing this Court’s October 26, 2016 ruling that the Defendant’s (“FAME”) retention of funds garnished post-petition did not constitute a willful violation of the stay for which relief was warranted under § 362(k)(1) of the Bankruptcy Code. The BAP held that although FAME’s one time, post-petition garnishment of $117.90 of the Debtor’s benefits was not a willful violation of the automatic stay, its retention of those benefits after receiving notice of her bankruptcy filing was willful. The BAP remanded the matter to this Court for findings and rulings as to injury and, if appropriate, quantification of damages
Debtor listed FAME on Schedule F. The Bankruptcy Noticing Center mailed notice of the filing to FAME on November 1, 2014. On November 3, 2014, FAME garnished $117.90 from the Debtor’s social security disability income.
Debtor filed an adversary proceeding against FAME, alleging that , “Upon information and belief, throughout the pendency of her Chapter 7 bankruptcy proceeding, [FAME] garnished Debtor’s social security income, without seeking prior bankruptcy court approval.”
On January 5, 2016, FAME issued a check to the Debtor in the amount of $132.90, representing the November 3, 2014 garnishment in the amount of $117.90 plus an “IRS fee” in the amount of $15.00.
The Debtor was deprived of $132.90 for approximately fourteen months.
The Debtor did not argue that any particular interest rate should be applied to her loss of use of the garnished funds, but FAME asserts that the prime rate is the applicable interest rate.
Ten months after the trial — and after the BAP entered its judgment — Debtor’s counsel filed an Affidavit of Attorney Fees, which stated, in pertinent part:
I incurred 6.2 hours in fees solely pertaining to the bankruptcy proceeding, all at $185.00 per hour ($1,147.00). Of the remaining $12,035.00, only 4.2 hours ($840.00) can be clearly determined to pertain to only the automatic stay violations. All other fees, including drafting briefs, proposed orders, legal research, client meetings, and attendance at hearings, pertained to both the student loan and automatic stay violation matters.
The affidavit attached itemized fee detail for all of the services provided by counsel to the Debtor, beginning with the drafting of the Debtor’s petition on October 23, 2014 and ending with an August 1, 2017 meeting with the Debtor to discuss the status of the Debtor’s case following the BAP’s judgment.
In accordance with the BAP’s mandate, this Court now reviews the record for a determination as to whether the Debtor is entitled to any actual or punitive damages as a result of FAME’s retention of the garnished funds in willful violation of the automatic stay.
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