WILLIAM T. MOORE, Jr., District Judge.
This case is before the Court on appeal (Doc. 1) from the January 23, 2009 Memorandum and Order of Bankruptcy Court Judge Lamar W. Davis, Jr. (Doc. 1 at 962-971). Jurisdiction over appeals from orders of bankruptcy courts is vested in the district courts by 28 U.S.C. § 158(a). For the reasons that follow, the order of the bankruptcy court is AFFIRMED. The Clerk of Court is DIRECTED to close this case.
This matter is once again before this Court on appeal of the Bankruptcy Judge's decision awarding Appellee
On remand, the Bankruptcy Court concluded that Appellee failed to sufficiently prove lost profits or any other measure of loss, awarding no damages based on any losses. (Doc. 1 at 964.) In addition, the Bankruptcy Court reimposed its prior award of $30,000 for attorney's fees, adding an additional $8,202.49 in appellate attorney's fees, for a total of $38,202.49. (
While this case was on remand, the Bankruptcy Court dismissed Appellee's Chapter 12 petition. (Doc. 1 at 2739-61.) As the basis for dismissal, the Bankruptcy Court cited a litany of fraudulent and misleading acts with respect to his bankruptcy petition. (
On April 5, 2011, Appellant filed his Notice of Appeal from the Bankruptcy Judge's order awarding Appellee no lost profits, but awarding $38,202.49 in attorney's fees and $5,000.00 in punitive damages. (Doc. 1.) on appeal, Appellant argues that the Bankruptcy Court abused its discretion when retaining jurisdiction over the adversary proceeding after dismissing the underlying bankruptcy petition for fraud. (Doc. 3 at 9-16.) Second, Appellant contends that the Bankruptcy Court incorrectly concluded that the adversary proceeding was necessary to deter Appellant from violating the Stay. (
On review from an order of a bankruptcy court, the district court will only set aside findings of fact if they are found to be "clearly erroneous." Fed. R. Bankr. P. 8013. During this review, this Court will give due regard to the "opportunity of the bankruptcy court to judge the credibility of the witnesses." (
In contrast, the Bankruptcy Court's conclusions of law are subject to
Appellant argues that the Bankruptcy Court abused its discretion by retaining jurisdiction over this adversary proceeding despite dismissing the underlying Bankruptcy Petition due to Appellee's fraud. (Doc. 3 at 9-16.) The Eleventh Circuit Court of Appeals has previously concluded that "the dismissal of an underlying bankruptcy case does not automatically strip a federal court of jurisdiction over an adversary proceeding which was related to the bankruptcy case at the time of its commencement."
In this case, Appellant bases his argument that the Bankruptcy Court abused its discretion on the fact that the underlying petition had been dismissed due to Appellee's fraud. Specifically, Appellant seems to contend that as a reward for him bringing before the Bankruptcy Court the numerous instances of Appellee's fraud, the Bankruptcy Court should have dismissed the adversary proceeding against him. (Doc. 3 at 14 ("By retaining jurisdiction, the bankruptcy court is penalizing the one individual who painstakingly proved the numerous instances of fraud practiced by the debtor/appellee on the bankruptcy court and debtor/appellee's creditors over the course of three years and is rewarding debtor/appellee for his fraud.").) While Appellant would like to fashion himself as the White Knight coming to rescue the Bankruptcy Court from Appellee, the Bankruptcy Judge's factual conclusions belie that characterization. For example, the Bankruptcy Court concluded that the commencement of the adversary proceeding was the only way to insure that Appellant would not violate the Stay. (Doc. 1 at 963.) Indeed, that court concluded Appellant knew of the pending bankruptcy case, and intentionally violated the Stay by entering onto Appellee's land and digging up the fields Appellee had prepared for his peanut crop. (
Based on these facts, the Court concludes that the Bankruptcy Judge acted within his discretion in retaining jurisdiction over the adversary proceeding. To the extent that Appellant is arguing for a blanket rule that the Bankruptcy Court cannot retain jurisdiction where the underlying bankruptcy petition has been dismissed because of the debtor's fraud, the Court is unable to find any legal support for this position and declines to create such a broad exception. Accordingly, the Court AFFIRMS the decision of the Bankruptcy Court with respect to this issue.
Appellant argues that the Bankruptcy Court erroneously concluded that the adversary proceeding was necessary to deter Appellant from violating the Stay. (Doc. 3 at 16-19.) In support of this argument, Appellant contends that the "record is devoid of any facts which would lead to this conclusion." (
Appellant argues that the Bankruptcy Court cannot award either attorney's fees or punitive damages if it concludes that there was no harm suffered. (Doc. 3 at 19-25.) The statute authorizing the assessment of damages for a willful violation of an automatic bankruptcy stay provides that the injured individual `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 language of this section makes clear that part of the actual damages a debtor suffers for a violation of an automatic stay is attorney's fees. Indeed, the intent of Congress to incorporate attorney's fees as part of actual damages becomes quite apparent when compared with other attorney fee statutes.
Based on these provisions, it appears congress knew how to make an award of attorney's fees separate and distinct from an award of actual damages. However, Congress did not do so with respect to the award of damages for violations of automatic stays. The Court concludes, therefore, that attorney's fees and costs are recoverable as actual damages under 11 U.S.C. § 362(k) (1). As a result, the Bankruptcy Court correctly awarded Appellee attorney's fees and was within its discretion in assessing punitive damages. Accordingly, the Court AFFIRMS the decision of the Bankruptcy Court with respect to this issue.
Appellant argues that Appellee is estopped from contending that Appellant violated the Stay because Appellee perpetrated fraud during the course of the bankruptcy proceedings. (Doc. 3 at 26.) Appellant offers no supporting case law or statute for this position, and the Court has been unable to locate any. Normatively, Appellant's argument makes little sense. As best the Court can discern, Appellant is claiming that the resulting damage from any violation of the Stay was against Graham Farms, an entity not a party to this case and in which Appellee fraudulently denied any ownership interest. According to Appellant, Appellee cannot now claim that he suffered injury based on the injury to Graham Farms because he fraudulently disclaimed any ownership interest in the farm during the bankruptcy proceedings.
After consideration of Appellant's argument, the Court can find no reason to reverse the decision of the Bankruptcy Court, which explicitly found that Appellee suffered damages as a result of Appellant's willful violation of the Stay. To the extent Appellant is arguing that the Bankruptcy Court was incorrect in concluding that Appellee was the injured party, the Court finds no merit to that contention. Accordingly, the Court AFFIRMS the decision of the Bankruptcy Court with respect to this issue.
For the reasons above, the decision of the bankruptcy court is AFFIRMED. The Clerk of Court is DIRECTED to close this case.
SO ORDERED.