CATHY SEIBEL, U.S.D.J.
Before the Court are the appeals of Appellant Ann Froman (Doc. 1 (16-CV-5898); Doc. 1 (16-CV-5322); Doc. 1 (16-CV-5324)), from United States Bankruptcy
Only the facts relevant to this appeal will be discussed. In March 2011, Ms. Fein, individually and on behalf of the estate of Benjamin Fein, sued Ms. Froman in New York state court to recover "Survival," a sculpture that Ms. Froman allegedly removed without permission from Mr. Fein's premises in 2010. (Fein Mem. 5322 Part II, at ER000068-75.)
On April 5, 2016, Ms. Froman filed a voluntary Chapter 13 petition in the United States Bankruptcy Court for the Southern District of New York. (Bankr. Doc. 1.) Ms. Froman's bankruptcy schedules indicate that she had over $18,000,000 in assets and approximately $800,000 in liabilities. (See Fein Mem. 5322 Part IX, at ER000811.) Her proposed Chapter 13 plan obligated her to pay the trustee $300 per month from May 1, 2016 through April 1, 2021, and to sell Survival, in order to satisfy her creditors. (Id. Part IX, at ER000859, ER000864.) On April 8, 2016, Ms. Froman demanded that the Sheriff's Office turn Survival over to her. (Id. Part XI, at ER001032-34.) From approximately April 11, 2016 to May 4, 2016, as discussed in more detail below, the parties agreed that Survival would remain in the possession of the Sheriff's Office while arrangements were made to safely transport, store
On May 5, 2016, after these negotiations broke down, Ms. Fein sent a letter to the Sheriff's Office stating that she did not consent to the removal of Survival from the Sheriff's Office and that she would be filing appropriate motion papers with the Bankruptcy Court. (Id. Part XII, at ER001094-95.) On May 6, 2016, Ms. Froman demanded that the Sheriff's Office release Survival to her. (Id. Part XII, at 1099-1100.) That same day, Ms. Fein filed in the Bankruptcy Court a motion for i) relief from the automatic stay, pursuant to 11 U.S.C. § 362(d), ii) adequate protection, pursuant to 11 U.S.C. § 363(e), or iii) dismissal of Ms. Froman's Chapter 13 case for cause, pursuant to 11 U.S.C. § 1307. (Bankr. Doc. 15.) Ms. Fein requested a hearing on her motion on shortened notice and a temporary restraining order prohibiting Ms. Froman from moving Survival pending the Bankruptcy Court's ruling on her motion. (Id. ¶ 5.) May 9, 2016, the Bankruptcy Court granted Ms. Fein's request for a hearing on shortened notice and enjoined Ms. Froman and her representatives and agents from removing Survival from the Sherriff's Office pending the decision on the motion. (Bankr. Doc. 21.) That same day — presumably before the Bankruptcy Court injunction came to Ms. Froman's attention — Mr. Silvernail retrieved Survival from the Sheriff's Office. (Fein Mem. 5322 Part XII, at ER001113.)
On May 17, 2016, the Bankruptcy Court held a preliminary hearing on Ms. Fein's motion, at which time Ms. Froman agreed to retain a broker and sell Survival by September 30, 2016. (See Bankr. Doc. 81 at 33:11-17.) The Bankruptcy Court adjourned the hearing on Ms. Fein's motion to allow Ms. Froman to begin to carry out the agreed-upon sale of Survival. (Id. at 32:13-33:12.) On May 24, 2016, Ms. Froman moved for an order finding that Ms. Fein had violated the automatic stay and awarding attorneys' fees, costs, damages, and sanctions pursuant to 11 U.S.C. §§ 362(a), (k). (Bankr. Doc. 36.)
On June 28, 2016, the parties reconvened before the Bankruptcy Court to continue the hearing on Ms. Fein's motion and to address Ms. Froman's motion. (Bankr. Doc. 68.) The Bankruptcy Court analyzed the factors commonly regarded as indicative of bad faith warranting conversion or dismissal under 11 U.S.C. § 1307, (see id. at 9:17-11:10), and found that Ms. Froman had filed her case in bad faith, (see id. at 10:6-7; 14:3-5). Judge Morris therefore announced that she would convert the case to one under Chapter 7, (see id. at 12:10), lift the stay, (see id. at 14:7), and deny Ms. Froman's application for sanctions for the alleged stay violation, (see id. at 14:8, 16:11-13).
On July 1, 2016, the Bankruptcy Court entered its order granting Ms. Fein's motion for relief from the automatic stay because Ms. Froman had filed her petition in bad faith and allowing Ms. Fein to enforce her rights and remedies in and to Survival. (Bankr. Doc. 56.) That same day, the Bankruptcy Court entered its order denying Ms. Froman's motion brought under 11 U.S.C. § 362 for an order finding that Ms. Fein had violated the automatic stay and awarding attorneys' fees, costs, damages, and sanctions. (Bankr. Doc. 57.) On July 5, 2016, Ms. Froman appealed both of these decisions. (Doc. 1 (16-CV-5322); Doc. 1 (16-CV-5324).) On July 14, 2016, the Bankruptcy Court entered its order converting Ms. Froman's case from one under Chapter 13 of the Bankruptcy Code to one under Chapter 7 pursuant to 11 U.S.C. § 1307, (Bankr. Doc. 70), an order that Ms. Froman appealed on July 22, 2016, (Doc. 1 (16-CV-5898)).
This Court has jurisdiction pursuant to 28 U.S.C. § 158(a)(1) to hear appeals from final judgments, orders, and decrees of a bankruptcy court. "On appeal, the [district] court `may affirm, modify, or reverse a bankruptcy judge's judgment, order, or decree or remand with instructions for further proceedings.'" W. Milford Shopping Plaza, LLC v. The Great Atl. & Pac. Tea Co. (In re Great Atl. & Pac. Tea Co.), No. 14-CV-4170, 2015 WL 6395967, at *2 (S.D.N.Y. Oct. 21, 2015) (quoting former Fed. R. Bankr. P. 8013).
11 U.S.C. § 1307(c) "enumerates 11 specific occurrences which constitute sufficient cause for the dismissal or conversion of a chapter 13 case to chapter 7. The grounds enumerated in subsections 1307(c)(1) through (11) are not exhaustive." 8 Alan N. Resnick & Henry J. Sommer, Collier on Bankruptcy ¶ 1307.04 (16th ed. 2016). "Although bad faith is not expressly enumerated in the statute, it is well established that lack of good faith may also be cause for conversion or dismissal under § 1307(c)." In re Prisco, No. 11-CV-474, 2012 WL 4364311, at *4 (N.D.N.Y. Sept. 24, 2012) (alteration and internal quotation marks omitted), aff'd, 574 Fed.Appx. 19 (2d Cir. 2014). Bad faith may be found where at the time of filing, there is "no reasonable probability of emerging from bankruptcy" or successfully reorganizing, In re C-TC 9th Ave. P'ship, 113 F.3d 1304, 1310 (2d Cir. 1997), or "where there is evidence of an intent to delay or frustrate the efforts of secured creditors to enforce their legitimate rights," In re Northtown Realty Co., L.P., 215 B.R. 906, 914 (Bankr. E.D.N.Y. 1998); see In re RCM Glob. Long Term Capital Appreciation Fund, Ltd., 200 B.R. 514, 522 (Bankr. S.D.N.Y. 1996) (bad faith inquiry "is meant to insure that the Debtor actually intends to use chapter 11 to reorganize and rehabilitate itself and not simply to cause hardship or delay to its creditors by invoking the automatic stay"). In determining whether a petition was filed in bad faith, a bankruptcy court "must review the totality of the circumstances," In re Eatman, 182 B.R. 386, 392 (Bankr. S.D.N.Y. 1995), including the following factors:
In re Cornelius, 195 B.R. 831, 836 (Bankr. N.D.N.Y. 1995); see Campora v. HSBC Bank USA, N.A. (In re Campora), No. 14-CV-5066, 2015 WL 5178823, at *11 n.10 (E.D.N.Y. Sept. 3, 2015) (listing similar factors). "[A]n order converting a bankruptcy case for cause is reviewed for an abuse of discretion." Blaise v. Wolinsky (In re Blaise), 219 B.R. 946, 950 (2d Cir. BAP 1998).
Ms. Froman appeals the conversion of her case on the basis that the Bankruptcy Court i) failed to apply the totality of the circumstances test, ii) did not provide the parties with notice that it was considering converting the case, and iii) did not conduct an evidentiary hearing on the motion. (See, e.g., App. Mem. 5898 at 14.)
In ruling on whether there was cause to dismiss or convert Ms. Froman's case, the Bankruptcy Court acknowledged that it was required to "examine the totality of the circumstances," and analyzed the relevant factors that may indicate a bad faith filing. (Bankr. Doc. 68 at 9:4-11:10.) The Bankruptcy Court concluded that Ms. Froman filed her case in bad faith because: i) she had only two unsecured creditors, ii) her pre-petition conduct was improper,
Without citing to any authority, Ms. Froman suggests that it was improper for the Bankruptcy Court to find bad faith based on the fact that she filed for bankruptcy shortly before the scheduled foreclosure on her mortgage because "it is common knowledge that Chapter 13 [c]ases filed in the Southern District of New York are more often than not ... filed for the sole purpose of dealing with secured creditors." (App. Mem. 5898 at 15.) She further argues "[o]ften times, a debtor will file a `Chapter 20 [c]ase' (to wit: the filing of a Chapter 13 on the he[e]ls of receiving a Chapter 7 [d]ischarge) for the sole purpose of engaging in Loss Mitigation on the First Mortgage and Voiding the Lien on a Second Mortgage or other personal or real property." (Id. at 15-16.) This is not a so-called Chapter 20 case, and the cases on which Ms. Froman relies in support of her argument related to the Bankruptcy Court's consideration of the timing of the filing are therefore inapposite. Bankruptcy courts may consider filing a petition on the eve of a foreclosure as a possible indication of bad faith. See, e.g., In re Syndicom Corp., 268 B.R. 26, 47-48 (Bankr. S.D.N.Y. 2001) ("[T]he filing of a bankruptcy petition on the eve of a foreclosure... is only one of several indicia that a court may appropriately look to in determining whether, under the totality of the circumstances, resort to the Bankruptcy Code has been in good faith, on the one hand, or inappropriate, on the other."), and the record demonstrates that the Bankruptcy Court put no greater emphasis on this factor than any others, (see Bankr. Doc. 68 at 10:6-11:10). Indeed, the Bankruptcy Court seemed at least as concerned, if not more, that the petition allowed Ms. Froman to evade the state court order regarding the sale of Survival, which was to be taken up a few weeks after the bankruptcy filing. (See id. at 10:12-16.) In any event, the Bankruptcy Judge's order was based on far more than the fairly commonplace occurrence of an eve-of-foreclosure filing.
Ms. Froman unpersuasively argues that the Bankruptcy Court erred in concluding that she had only two unsecured creditors. (See App. Mem. 5898 at 14-15.) Schedule D titled "Creditors Who Have Claims Secured by Property" lists Ms. Fein as a creditor with a claim for $137,181.25. (Fein Mem. 5322 Part IX, at ER000822.) Schedule E/F titled "Creditors Who Have Unsecured Claims" lists only two entities: American Express and Stenger, Roberts, David, et al. (Id. Part IX, at ER000824-25.) That Ms. Fein's claim might later have become unsecured in part, if Survival turned out to be worth well less than what Ms. Froman represented, does not change this fact. Therefore, the Bankruptcy Court did not err in relying on the face of Ms. Froman's bankruptcy schedules and concluding that she had two unsecured creditors. Ms. Froman cannot complain that the Bankruptcy Judge accepted Ms. Froman's own representations in her bankruptcy petition, In re Edwards, No. 03-10018, 2003 WL 22016324, at *8 (Bankr. D. Vt. Aug. 26, 2002) ("The integrity and effectiveness of the bankruptcy process is founded upon the premise that debtors file complete and accurate schedules, upon which the Court, trustees and creditors can rely."), especially when the bad-faith inquiry goes to the debtor's state of mind at the time of filing, see In re RCM, 200 B.R. at 522 ("[T]he inquiry into the Debtor's intent (or lack of
Ms. Froman also contends that the Bankruptcy Court had no basis for finding that Survival is one of her major assets. (App. Mem. 5898 at 16-17.) The Bankruptcy Court did not have an appraisal of the sculpture but noted that Ms. Fein valued Survival at $20,000 and Ms. Froman valued it at approximately $1,200,000. (Bankr. Doc. 68 at 13:7-15.) While the precise value of Survival is not known, it was not clearly erroneous for Judge Morris to conclude it was one of Ms. Froman's major assets in light of the fact that Ms. Froman indicated in Schedule D that it had a value of over one million dollars — a significant portion of her claimed almost $19 million in assets — and that it was the collateral securing Ms. Fein's six-figure claim. (See Fein Mem. 5322 Part IX, at ER000811, ER000822.) Again, Ms. Froman cannot be heard to complain that the Bankruptcy Judge assumed Ms. Froman had been truthful in her schedules.
In these circumstances — including a debtor who had for years been trying every which way to shield the sculpture from her creditor; a last-ditch filing; only two unsecured creditors; assets greatly exceeding liabilities; and proposed payments that would not come close to paying off the debts — the Bankruptcy Court was more than justified in concluding that Ms. Froman had no real intention of fulfilling her obligations to her creditors pursuant to the proposed plan but had filed just to gain the benefit of the automatic stay.
Ms. Froman argues that the Bankruptcy Court should not have relied on her schedules to conclude that she had no real intention of reorganizing herself, claiming that it was clear that she intended to sell all of her artwork to repay her debts. That alleged intent was nowhere indicated in the petition she filed
Judge Morris committed no error in crediting Ms. Froman's schedules in assessing her intent at the time of filing, and nothing that happened thereafter undermined the conclusions that the Bankruptcy Judge reached. It simply cannot be said on this record that the Bankruptcy Court's consideration of the bad faith issue was
Ms. Froman further asserts that the Bankruptcy Court failed to "provide to the parties notice that [it] was considering the entry of an Order Converting the Case." (App. Mem. 5898 at 14.) Under 11 U.S.C. § 1307(c) a bankruptcy court may convert or dismiss a case after notice and a hearing, and Ms. Froman does not deny that she had notice of the hearing at which the Bankruptcy Court was to consider Ms. Fein's motion under that section. "Use of the word `may' indicates that the decision to dismiss or convert is committed to the discretion of the bankruptcy court." In re Blaise, 219 B.R. at 949-50. On June 28, 2016, before deciding to convert the case, Judge Morris correctly noted that "[i]n deciding between conversion and dismissal, a [bankruptcy c]ourt must consider the best interest of the creditors and the estate." (Bankr. Doc. 68 at 12:8-10); see In re Blaise, 219 B.R. at 950. Given the motion that was filed on May 6, 2016 seeking dismissal, the plain language of 11 U.S.C. § 1307 allowing dismissal or conversion, Judge Morris's comments at the hearing on June 28, 2016, and the fact that the same standards apply to find cause to dismiss or convert a bankruptcy case, Ms. Froman could not have been surprised when the Bankruptcy Court on June 28, 2016 found appropriate the arguably less drastic step of converting, rather than dismissing her case, and ordered the same on July 14, 2016.
Ms. Froman further argues that the Bankruptcy Court erred in failing to conduct an evidentiary hearing before converting her case to one under Chapter 7. (App. Mem. 5898 at 23-24.) A bankruptcy court need only provide notice and opportunity for a hearing "as is appropriate in the particular circumstances." In re Blaise, 219 B.R. at 949. The lack of an evidentiary hearing does not constitute grounds for error where, as here, a party had the opportunity to contest a conversion motion but never requested a separate evidentiary hearing. See Bernheim v. Damon & Morey, LLP, No. 06-BK-3386, 2007 WL 1858292, at *2 (2d Cir. June 28, 2007) (summary order) (because "[b]ankruptcy judges enjoy broad discretion as to the type of hearing to conduct," court did not abuse discretion by failing to conduct evidentiary hearing where debtor had "more than ample opportunity to present its arguments to the [Bankruptcy] Court" through written submissions); In re Blaise, 219 B.R. at 949 ("Appellant had the opportunity to contest the Conversion Motion at the hearing.... He submitted his own affidavit but such affidavit left essentially undisputed the Creditor's core allegations. Accordingly, an evidentiary hearing was not required."); Wilmington Trust Co. v. AMR Corp. (In re AMR Corp.), 490 B.R. 470, 479 (S.D.N.Y. 2013) ("It is unnecessary to conduct an evidentiary hearing on a contested matter unless there are disputed issues of material fact that a Bankruptcy Court cannot decide based on the record.... [W]here the parties do not request an evidentiary hearing or the core facts are not disputed, the bankruptcy court is authorized to determine contested matters on the pleadings and arguments of the parties, drawing necessary inferences from the record.") (alteration and internal quotation marks omitted); Powers v. Am. Honda Fin. Corp., 216 B.R. 95, 97 (N.D.N.Y. 1997) (evidentiary hearing not required where party did not request one, and where party had opportunity to contest at oral argument).
Under 11 U.S.C. § 362, the filing of a bankruptcy petition operates as a stay against, among other things, "the ... continuation ... of a judicial ... proceeding against the debtor that was ... commenced before the commencement of the [bankruptcy] case," "the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of a [bankruptcy] case," and "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." The automatic stay provides a debtor with breathing room from the claims of its creditors, and "`allows the bankruptcy court to centralize all disputes concerning property of the debtor's estate in the bankruptcy court so that reorganization can proceed efficiently, unimpeded by uncoordinated proceedings in other arenas.'" Tenas-Reynard v. Palermo Taxi Inc., No. 14-CV-6974, 2016 WL 1276451, at *3 (S.D.N.Y. Mar. 30, 2016) (quoting In re Ionosphere Clubs, Inc., 922 F.2d 984, 989 (2d Cir. 1990)). "The scope of the automatic stay is broad and is a fundamental debtor protection that not only protects debtors but protects creditors as well." In re Great Atl. & Pac. Tea Co., 467 B.R. 44, 51 (S.D.N.Y. 2012) (internal quotation marks omitted).
A bankruptcy court has the discretion under 11 U.S.C. § 362(d)(1) to grant relief from the automatic stay "for cause," by "terminating, annulling, modifying, or conditioning" the stay. 11 U.S.C. § 362(d)(1). The movant must make an initial showing of cause, and then the burden shifts to the party opposing the motion to prove that it is entitled to the continued protections of the automatic stay. See Barber v. Arnott (In re Arnott), 512 B.R. 744, 753 (Bankr. S.D.N.Y. 2014). "Neither Section 362(d)(1) nor the legislative history defines `cause.' `Cause' is an intentionally broad and flexible concept which must be determined on a case-by-case basis." In re Project Orange Assocs., LLC, 432 B.R. 89, 103 (Bankr. S.D.N.Y. 2010) (citations and internal quotation marks omitted). A bankruptcy court can grant relief from the automatic stay for cause under 11 U.S.C.
Ms. Froman appeals the order granting Ms. Fein relief from the automatic stay on the basis that the Bankruptcy Court abused its discretion by failing to properly apply the totality of the circumstances test and by not holding an evidentiary hearing. (See, e.g., App. Mem. 5322 at 19.)
The Bankruptcy Court noted that lifting a stay "is an extraordinary remedy that requires careful examination of facts on a case-by-case basis." (See Bankr. Doc. 68 at 13:16-23.) Having "determined that there [wa]s cause to dismiss for bad faith or cause to convert for bad faith," it went on to find that "for th[e] same reason[s], there [was] cause to lift the stay for bad faith." (Id. at 14:3-7.) The Bankruptcy Court thoroughly evaluated the totality of the circumstances in determining that there was cause based on bad faith to lift the stay. (Id. at 9:17-11:10.) The Bankruptcy Court's decision "should not be disturbed on appeal [because] the record shows that [Judge Morris] considered the appropriate factors for determining whether cause for relief from the stay exists." In re Great Atl. & Pac. Tea Co., 467 B.R. at 55 (internal quotation marks omitted). Therefore, for the reasons discussed above with respect to the decision to convert the case, it was not an abuse of discretion for the Bankruptcy Court to find cause to lift the stay based on bad faith.
Ms. Froman argues she was entitled to an evidentiary hearing on Ms. Fein's motion for relief from the stay. (App. Mem. 5322 at 26-27.)
In re River Hills Apartments Fund, 813 F.2d 702, 706 (5th Cir. 1987); see In re 347 Linden LLC, No. 11-CV-1990, 2011 WL 2971496, at *7 (E.D.N.Y. July 20, 2011) ("Although 11 U.S.C. § 362(d) refers to the bankruptcy court's authority to dismiss a petition upon `notice and hearing,' the extent of the `hearing' required in a particular case is committed to the sound discretion of the bankruptcy judge."). Again, Ms. Froman did not request an evidentiary hearing on the motion for relief from the stay and relied on her written submissions rather than raising any additional points with the Bankruptcy Court when given the opportunity to do so. Therefore, Ms. Froman had adequate opportunity to be heard
Accordingly, the Bankruptcy Court did not abuse its discretion in granting Ms. Fein relief from the stay without conducting an evidentiary hearing.
"Where there are willful violations of the automatic stay provision, the Bankruptcy Code directs that actual damages be awarded to any individual injured by that violation." HSBC Bank USA v. Crawford (In re Crawford), 476 B.R. 83, 86 (S.D.N.Y. 2012) (citing 11 U.S.C. § 362(k)). "[A]ny deliberate act taken in violation of a stay, which the violator knows to be in existence, justifies an award of actual damages." Crysen/Montenay Energy Co. v. Esselen Assocs., Inc. (In re Crysen/Montenay Energy Co.), 902 F.2d 1098, 1105 (2d Cir. 1990).
In re Velichko, 473 B.R. 64, 69-70 (Bankr. S.D.N.Y. 2012) (quoting Sensenich v. Ledyard Nat'l Bank (In re Campbell), 398 B.R. 799, 812 (Bankr. D. Vt. 2008)). "The decision of whether [Ms. Fein] violated 11 U.S.C. § 362 is a matter of law. Thus, the relevant standard of review of [whether Ms. Fein] violated the automatic stay is [] de novo." Bank of Am., N.A. v. Adomah (In re Adomah), 368 B.R. 134, 137 (S.D.N.Y. 2007). "[T]he party seeking damages for a violation of the automatic stay bears the burden of proving that damages were actually incurred." In re Sturman, No. 10-CV-6725, 2011 WL 4472412, at *3 (S.D.N.Y. Sept. 27, 2011); see In re Clark, No. 13-CV-10904, 2014 WL 793573, at *2 (Bankr. D. Vt. Feb. 26, 2014) ("The Debtor has the burden of proof in establishing facts to show a violation of the stay and a basis for an award of sanctions under § 362(k).").
Ms. Froman asserts that Ms. Fein violated the stay because "[o]nce the [bankruptcy] estate had been created by the commencement of the [bankruptcy] case, [Ms. Fein] had an affirmative duty, without condition, to turn[]over the Survival to [Ms. Froman] or otherwise be in willful violation of the stay set forth in 11 U.S.C. § 362(a)." (App. Mem. 5324 at 8.)
A review of the correspondence between the parties reveals that there was an agreement that Survival would stay at the Sheriff's Office pending further agreement on how to transport, store, and sell the sculpture. (See Fein Mem. 5322 Parts XI, XII, at ER001030-84.) On April 11, 2016, the parties agreed that the statue would
Further, upon de novo review, I concur with Judge Morris's legal conclusion that the automatic stay had not been violated. It is evident that the Sheriff's Office, not Ms. Fein, had possession and control over the sculpture and that Ms. Froman agreed to have it remain there. (See id. Parts XI, XII, at ER001030-84.) Further, once the negotiations between the parties broke down, and Ms. Froman demanded that the Sheriff's Office release the statue to her, (id. Part XII, at ER001099-ER001100), Mr. Silvernail retrieved it promptly, (id. Part XII, at ER001113). Therefore, this case is distinguishable from those relied upon by Ms. Froman in which creditors possessed the relevant property and refused to turn it over to the debtor until particular demands were met. See, e.g., Weber v. SEFCY (In re Weber), 719 F.3d 72, 73, 81 (2d Cir. 2013) (affirming district court holding that "by declining to surrender the vehicle absent a turnover order and protection [lender] considered adequate, the lender wrongfully `exercised control' over the vehicle" and willfully violated the stay); In re Velichko, 473 B.R. at 69-70 (finding a violation of the stay where the creditor "withheld [debtor's] only means of transportation — causing her to incur more debt by forcing her to rent a car.... Then as a condition for her to receive possession of the car, which she was legally entitled to receive upon the filing of the petition, [creditor] extracted from her over $800 in arrears and a reaffirmation agreement."). None of the cases cited by Ms. Froman involved a situation like that here, where in exchange for the creditor forbearing from filing a motion for relief from the stay or adequate protection, the debtor agreed to maintain the status quo of the property remaining with a third party. See
Ms. Froman's motion also fails because even if there were a violation, she does not specify any damages that she incurred apart from litigation costs expended in pursuing her motion. "While § 362(k) is designed to discourage willful violations of the automatic stay, it does not permit recovery of unnecessary litigation costs." In re Ampal-Am. Israel Corp., 502 B.R. 361, 374 (Bankr. S.D.N.Y. 2013).
In re Sturman, 2011 WL 4472412 at *4. Ms. Froman asserts that as a result of Ms. Fein's actions, Survival was "unlawfully held by the Sheriff's Department for a period of 23 days." (App. Mem. 5324 at 7.) She further claims that she was prevented "from showing the Survival to interested purchasers or art brokers or dealers for the purpose of marketing same for sale in an expeditious manner." (Id.) But she has provided no evidence of any buyer or broker who wished to see the sculpture during that period, let alone evidence that any such person was unable to do so at the Sheriff's Office. Any alleged damages are thus purely speculative and unquantifiable. Ms. Froman has not shown that she suffered any loss as a result of Ms. Fein's conduct and thus is not entitled to damages, fees or costs. See In re Ampal-Am. Israel Corp., 502 B.R. at 374-75 (affirming bankruptcy court's decision to "decline to award attorneys' fees and costs incurred in connection with the prosecution of a willful stay violation where the only damages incurred by the injured party are the legal fees and costs incurred in bringing the motion"); In re Sturman, 2011 WL 4472412, at *3 ("Where no injury results from the violation of the automatic stay, an award of damages is clearly inappropriate.") (collecting cases).
Ms. Froman argues in a conclusory fashion that she should have been awarded punitive damages because of Ms. Fein's "willful and egregious violation of the automatic stay, pursuant to 11 U.S.C. § 362(k)." (App. Mem. 5324 at 22.) "Punitive damages ... are only appropriate where the stay violation was conducted in bad faith, with malice, or in a particularly egregious manner." In re Ebadi, 448 B.R. 308, 320 (Bankr. E.D.N.Y. 2011). "[E]ven callous disregard [of a stay] is an insufficient basis upon which to award punitive damages because it does not rise to the level of bad faith or maliciousness." In re Adomah, 368 B.R. at 139. There is nothing in the record indicating that Ms. Fein acted
Ms. Froman again argues that she was entitled to an evidentiary hearing on her motion for an order finding that Ms. Fein violated the automatic stay and awarding attorneys' fees, costs, damages, and sanctions. (App. Mem. 5324 at 28-29.) For the same reasons outlined above with respect to the other motions, the Bankruptcy Court did not err in failing to conduct an evidentiary hearing. See Bernheim, 2007 WL 1858292, at *2; In re Blaise, 219 B.R. at 949; In re AMR Corp., 490 B.R. at 479.
For the reasons set forth above, the orders of the United States Bankruptcy Court dated July 1, 2016 and July 14, 2016, (Bankr. Docs. 56, 57, 70), are hereby AFFIRMED. The Clerk of Court is respectfully directed to docket this decision in and close all three pending appeals, (16-CV-5898, 16-CV-5322, and 16-CV-5324).