Paugh v. Graham (In re Paugh)

• Decision Date: 19 April 2023
• Docket Number: 1:21-bk-00673,Adversary 1:22-ap-00006
• Parties: IN RE: LESTER O. PAUGH, JR. Debtor. v. RUTH E. GRAHAM, Defendant. LESTER O. PAUGH, JR. Plaintiff,
• Court: United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Northern District of West Virginia

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IN RE: LESTER O. PAUGH, JR. Debtor.

LESTER O. PAUGH, JR. Plaintiff,
v.
RUTH E. GRAHAM, Defendant.

No. 1:21-bk-00673

Adversary No. 1:22-ap-00006

United States Bankruptcy Court, N.D. West Virginia

April 19, 2023

Chapter 7

MEMORANDUM OPINION

David L. Bissett, United States Bankruptcy Judge

On February 6, 2023, the court granted summary judgment as to liability in favor of Lester O. Paugh, Jr. (the "Plaintiff" or "Paugh") in the above-referenced adversary proceeding and determined that Ruth E. Graham (the "Defendant") willfully violated the automatic stay that arose in the Plaintiff's Chapter 7 bankruptcy case. To assess the extent of damages available under 11 U.S.C. § 362(k)(1), the court required Plaintiff's counsel, Thomas E. McIntire ("McIntire"), to file a motion in that regard and provided the Defendant with an opportunity to respond. For the reasons set forth herein, the court concludes that the Plaintiff is entitled to an award of damages in the amount of $13,025.72.

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I. BACKGROUND

On February 6, 2023, the court entered a memorandum opinion granting the Plaintiff's motion for summary judgment. It found that the Defendant willfully violated the stay under § 362(k)(1). Consistent with the court's order, in that regard a preliminary hearing was held on February 14, 2023, at which the court requested that the Plaintiff timely file a written motion for damages and provided opportunity for the Defendant to respond.

Ultimately, the Plaintiff seeks thirty-eight (38) hours billed at $375 per hour and alleges overall damages of $14,454.19 (i.e., $14,250 in reasonable attorney fees plus $204.19 in advanced costs).^[1] Other than attorney fees and advanced costs, no other damages are requested. Notably, however, the Plaintiff seeks damages in his complaint of $2,173.91 for wages garnished in willful violation of the stay, as outlined in the order granting summary judgment.^[2] Of relevance, the Plaintiff's attorney fee (and, in some instances, advanced cost) descriptions include ministerial work for sending affidavits; making copies; transcribing/revising a transcript; efforts in the Circuit Court of Preston County, West Virginia; matters regarding a different adversary proceeding (i.e., the Defendant's adversarial proceeding against the Plaintiff to determine nondischargeability of her claim); and efforts coupling attempted resolution(s) for this adversary proceeding and the nondischargeability proceeding filed by the Defendant in this action. In further support, the exhibits include the Plaintiff's Bankruptcy Fee Agreement which, in relevant part, contains the following "[attorney fee] of $375 per hour along with $175 per hour for all paralegal services and $50 per hour for work completed by the staff." In response, the Defendant apologizes for her actions in willful violation of the stay but asserts that she should not have to pay any (requested) damages.^[3]

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II. ANALYSIS

The Plaintiff seeks $14,250 in attorney's fees incurred in connection with the filing and prosecution of his § 362(k)(1) claim. Additionally, his complaint alleged $2,173.91 for garnished wages in willful violation of the stay. In support of the fee request, the Plaintiff provides contemporaneous time records that show the total expenditure of thirty-eight (38) hours compensated at his customary hourly rate of $375. Additionally, he requests $204.19 in advanced costs. In reply, the Defendant asserts she should not have to pay damages despite the court's determination that she willfully violated the stay.

Section 362(k)(1) provides, in relevant part, "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). The lodestar method (which defines reasonable hours expended times a reasonable rate) is "appropriate to employ . . . to determine a reasonable fee award for successfully prosecuting a § 362(k) claim." In re Imperial Petroleum Recovery Corp., No. 13-30466, 2021 WL 3668382, at *5 (Bankr.S.D.Tex. Aug. 18, 2021), aff'd, No. AP 14-03375, 2022 WL 2806456 (S.D. Tex. July 18, 2022). In fact, "[c]ourts frequently apply the standards used in determining the reasonableness of compensation under § 330 in determining what fees and costs are reasonable and necessary in the prosecution of a § 362(k) cause of action . . .." In re Voll, 512 B.R. 132, 141 (Bankr. N.D.N.Y. 2014).^[4] Discretion remains with the court to eliminate unrelated or excessive fees. See, e.g., America's Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), 803 F.3d 1095, 1101 (9th Cir. 2015) (en banc) (holding that "[o]nly an award of fees reasonably incurred is mandated by the statute; courts awarding fees under § 362(k) thus retain the discretion to eliminate unnecessary or

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plainly excessive fees. Sound exercise of this discretion ... provide[s] a sufficient check on any abuses that might otherwise...