Bankruptcy: Debtor’s Attorney’s Fees Incurred In Successfully Defending Against Creditor's Stay Violation On Appeal Are Recoverable As Damages Under 11 U.S.C. § 362(k)(1)

 

Contrast That With Nonrecoverability of Fees For Adversary Proceeding Work Related to Pursuit of Damages From Stay Violation.

     The Ninth Circuit in In re Schwartz-Tallard, Case No. 12-60052 (9^th Cir. Apr. 16, 2014) (published) dealt with a different issue leading to a different result than that reached in Sternberg v. Johnston, 595 F.3d 937 (9^th Cir. 2010). Sternberg determined that a debtor’s fee for work on an adversary proceeding seeking damages for a stay violation were not “actual damages” under a bankruptcy statute, namely, 11 U.S.C. § 362(k)(1) (one stating that an individual injured by willful stay violation shall recover actual damages, including costs and attorneys’ fees). However, in contrast to Sternberg, the Schwartz-Tallard panel decided debtor’s successful appellate defense of a bankruptcy court determination that a creditor violated a stay was much different and did constitute “actual damages” under section 362(k)(1). Goes to show you how distinguishing between different purposes and how different procedural contexts can drive a result in a diametrically opposite direction.