Nissan Motor Acceptance Corp. v. Baker - 239 B.R. 484 (N.D. Tex. 1999)

Rule:

The automatic stay is a fundamental protection afforded by the bankruptcy laws. Courts hold that a creditor's continued retention of estate property after notice of a bankruptcy filing constitutes an exercise of control over property of the estate in violation of the automatic stay. A willful violation of the stay does not require a specific intent to violate the stay. A post-petition repossession is unquestionably a violation of the automatic stay.

Facts:

Appellees Hubert Baker et al., filed a Chapter 7 bankruptcy petition. At the time of filing, appellees listed the truck, for which appellees were in arrears to appellant Nissan Motor Acceptance Corporation by more than two monthly payments. Appellant, without knowledge of appellees' bankruptcy, repossessed the vehicle. Appellant did not turn-over the vehicle upon notice of appellees' bankruptcy, but retained possession of the truck. Almost two months after the bankruptcy was filed, appellant filed its motion for relief from stay, or, in the alternative, adequate protection. However, while this motion was pending before the Bankruptcy Court, appellant sold the vehicle. The Bankruptcy Court, which did not know of the sale of the vehicle, eventually granted appellant's motion. Appellees filed the adversary proceeding subject to this appeal seeking damages for violation of the automatic stay provided by § 362. The Bankruptcy Court entered a final judgment in favor of appellees. The Bankruptcy Court granted appellant the option to fulfill the actual and punitive damages portion of the judgment by providing appellees with a new vehicle, together with its title free and clear of all liens. Before this Court was appellant's appeal of the Bankruptcy Court's judgment. 

Issue:

Was the decision of the bankruptcy court proper?

Answer:

Yes.

Conclusion:

The court affirmed decision as the court found that appellants willfully violated automatic stay provision by using self-help procedures not authorized by statute to maintain possession and sell appellees' truck. The court ruled that nothing in statutes allowed appellant to use such egregious self-help procedures, thus, the court determined that the award of punitive damages was appropriate. The court also held that there was evidence of actual damages because appellees paid for rides and financed another vehicle. However, the court held that appellees were not required to mitigate damages because any damages could have been avoided had appellant returned truck after being notified of bankruptcy. Lastly, the court found that appellant failed to produce evidence that attorneys' fees were unreasonable or excessive.