BANKRUPTCY CORNER
BANKRUPTCY CORNER
The Attorney ’ s Fees Incurred by Debtor May Be the Damages
JASON S . RIGOLI
In a recent opinion from the Bankruptcy Court in Delaware , Judge Goldblatt held that the attorney ’ s fees incurred by the debtor in addressing a willful stay violation of a creditor were the “ actual damages ” that could be awarded , even if there were no other damages suffered because of the stay violation . Healthcare Real Est . Partners , LLC v . Summit Healthcare REIT , Inc . ( In re Healthcare Real Est . Partners , LLC ), 2023 Bankr . LEXIS 2757 ( Bankr . D . Del . Nov . 14 , 2023 ). Judge Goldblatt ’ s reasoning came from the language of § 362 ( k ), which reads : “[ e ] xcept as provided in paragraph ( 2 ), an individual injured by any willful violation of a stay provided by this section shall recover actual damages , including costs and attorneys ’ fees , and , in appropriate circumstances , may recover punitive damages .” 11 U . S . C . § 362 ( k )( 1 ) ( emphasis added ). Judge Goldblatt read this phrase to mean the attorneys fees and costs incurred by the debtor in connection with addressing the willful stay violation are actual damages suffered by the debtor . Healthcare Real Est . Partners , LLC , 2023 Bankr . LEXIS 2757 at * 16-20 . See also Healthcare Real Est . Partners , LLC v . Summit Healthcare REIT , Inc . ( In re Healthcare Real Est . Partners ,
LLC ), 2023 Bankr . LEXIS 1262 at * 8-17 and 52-53 ( Bankr . D . Del . May 12 , 2023 ) ( details facts of case and award under § 362 ( k )). from a creditor ’ s willful stay violation .
This article was submitted by Jason S . Rigoli , Esq ., Furr and Cohen , P . A ., 2255 Glades Road , Suite 419A , Boca Raton , FL 33431 , jrigoli @ furrcohen . com .
The Eleventh Circuit has not addressed this issue directly . In Lodge v . Kondaur Capital Corp ., 750 F . 3d 1263 ( 11th Cir . 2014 ), the Eleventh Circuit in rejecting the debtor ’ s argument that merely the willful violation of the stay was sufficient to establish a claim under the § 362 ( k ) held that “[ o ] nly individuals who have been injured may recover damages under § 362 ( k ).” 750 F . 3d at 1268 at fn . 8 ( citations omitted ).
The question remains , however , whether the attorney ’ s fees incurred by a debtor in prosecuting a willful stay violation is an injury that would give rise to an actual damages award under 11 U . S . C . § 362 ( k ), is consistent with Lodge without a separate , underlying injury to the debtor
PBCBA BAR BULLETIN 9