## Facts

- Rupanjali Snowden obtained a $575 payday loan from Check Into Cash of Washington Inc. (CIC) and provided a post-dated check as security.
- Before the loan came due, Snowden placed a stop-payment order and told CIC she was considering bankruptcy, providing her bankruptcy attorney’s contact information.
- Snowden filed a Chapter 7 petition and listed CIC as an unsecured creditor.
- After the bankruptcy filing, CIC repeatedly called Snowden at her workplace despite being directed to her attorney and asked to stop.
- About a month after the filing, CIC cashed the post-dated check, triggering overdrafts and charges that left Snowden’s account overdrawn by more than $800.
- Snowden sought sanctions under 11 U.S.C. § 362(k)(1) for a willful automatic-stay violation, requesting reimbursement, emotional-distress damages, punitive damages, and attorneys’ fees.
- CIC sent an email offering to pay $1,445 only if Snowden settled, while denying fault; Snowden rejected the offer and proceeded to trial.

## Issues

1. Whether § 362(k)(1) permitted emotional-distress damages as “actual damages” on Snowden’s evidentiary showing and causal link to the stay violation.
2. Whether the bankruptcy court abused its discretion by awarding punitive damages based on CIC’s conduct after notice of the bankruptcy.
3. Whether § 362(k)(1) allows recovery of attorneys’ fees incurred litigating the stay-violation claim after a creditor makes a conditional settlement offer that does not fully remedy the violation.
4. Whether additional sanctions were warranted under the court’s inherent authority based on alleged bad-faith litigation conduct.

## Decision

- Affirmed the award of emotional-distress damages; Snowden credibly proved significant emotional harm caused by CIC’s post-petition collection conduct.
- Affirmed the award of punitive damages; the record supported a finding of reckless or callous disregard of the automatic stay.
- Reversed the limitation on attorneys’ fees; § 362(k)(1) permits recovery of reasonable fees incurred litigating the stay violation even after a creditor’s conditional settlement offer.
- Affirmed the denial of inherent-authority sanctions for lack of a required bad-faith finding.
- Remanded for recalculation of attorneys’ fees consistent with the ruling.

## Legal Principles

- Under 11 U.S.C. § 362(k)(1), an individual injured by a willful automatic-stay violation must recover actual damages, including costs and attorneys’ fees, and may recover punitive damages in appropriate circumstances.
- Emotional-distress damages qualify as actual damages when the debtor shows (1) significant emotional harm, (2) clear evidence of that harm (including credible testimony), and (3) a causal connection to the stay violation.
- Punitive damages may be awarded for willful stay violations when the creditor’s conduct reflects reckless or callous disregard for the law or the debtor’s rights.
- Reasonable attorneys’ fees incurred prosecuting and litigating a § 362(k)(1) claim are compensable as actual damages; a creditor cannot cut off fee recovery through a conditional, partial settlement offer that does not fully resolve the violation.

## Conclusion

The Ninth Circuit held that willful stay violations can support emotional-distress and punitive damages and that § 362(k)(1) also covers reasonable attorneys’ fees incurred litigating the violation, including fees incurred after a creditor’s conditional settlement offer, and remanded to recalculate fees accordingly.


In re Snowden, 769 F.3d 651 (9th Cir. 2014)