In Snowden v. Check Into Cash of Washington Inc. (In re Snowden), 2014 DJDAR 12677, the United States Court of Appeals for the Ninth Circuit decided a bankruptcy case involving the award of attorney fees.
The debtor obtained a loan from Check Into Cash (“CIC”). The debtor filed for Chapter 7 bankruptcy and listed CIC as an unsecured creditor. After the bankruptcy petition was filed, CIC cashed a check the debtor had written to secure the loan. CIC’s actions resulted in the bank account to be overdrawn.
The debtor filed a motion for sanctions, alleging that CIC willfully violated the automatic stay provisions of the U.S. Bankruptcy Code. CIC denied it violated the automatic stay. In response to the debtor’s request to settle, CIC sent an email offering to resolve the entire matter for approximately $1,000. The debtor did not agree to those terms.
Subsequently, the bankruptcy court concluded that CIC violated the automatic stay and awarded damages totaling $27,484, including attorney fees. The debtor was not satisfied with the fee award and pursued an appeal. On appeal, the debtor argued she was entitled to additional attorney fees for the entire time period before the court determined that CIC had violated the automatic stay.
The Ninth Circuit partially reversed the decision of the lower court. The Ninth Circuit noted that attorney fees are recoverable when the automatic stay is willfully violated. The Ninth Circuit concluded that the lower court improperly calculated the fee award and should have awarded fees incurred to end a violation of the automatic stay.