MEMORANDUM OPINION

KEITH L. PHILLIPS, Bankruptcy Judge.

These three adversary proceedings involve similar claims for damages resulting from willful violations of the automatic stay by NC Financial Solutions of Utah, LLC, d/b/a NetCredit ("NetCredit" or the "Defendant"). The individual plaintiffs (individually, the "Plaintiff" and jointly, the "Plaintiffs") are seeking actual damages pursuant to § 362(k)(1) of the Bankruptcy Code, 11 U.S.C. § 362(k)(1),1 including compensatory damages, punitive damages, and attorneys' fees. The cases were tried consecutively on January 12, 2017. In all three cases, NetCredit admitted liability, and the issues at trial were limited to a determination of the appropriate amount of damages.

Prior to trial, a consent order was entered in each case granting a motion to bifurcate the claim for attorneys' fees from the other damage claims and providing that an award of attorneys' fees would be addressed pursuant to a subsequent motion process. At the conclusion of the trials, the Plaintiffs were instructed to submit their requests for attorneys' fees within twenty-one days, and the Defendant was allowed an additional fourteen days to respond. The Court also ordered NetCredit to submit financial information pertaining to its value within twenty-one days, allowing the Plaintiffs fourteen days thereafter to respond.

In each adversary proceeding, on February 2, 2017, the Plaintiffs filed a "Consolidated Application by Counsel for Plaintiffs for Award of Attorney Fees and Reimbursement of Expenses" (the "Application"), to which NetCredit objected. On that same date, NetCredit submitted the required financial information pertaining to its value and moved that the information be filed under seal. The Plaintiffs objected to the motion to file the documents under seal.

A hearing on the Application and NetCredit's request to seal its financial information was held on March 1, 2017. The Court denied NetCredit's motion to seal and took the Application under advisement. Following the March 1 hearing, counsel for each of the three law firms collectively representing the Plaintiffs filed Disclosures of Compensation pursuant to section 329(a) of the Bankruptcy Code, and Bankruptcy Rule 2016(b), Fed. R. Bankr. P. 2016(b),2 in each case. On March 16, the Plaintiffs submitted supplemental, post-trial briefs on the "outstanding issues," and on March 30, NetCredit filed responsive briefs. The matters are ripe for adjudication on all issues.

Jurisdiction and Venue

The Court has subject matter over each of these adversary proceedings pursuant to 28 U.S.C. §§ 157(a) and 1334 and the General Order of Reference from the U.S. District Court for the Eastern District of Virginia dated August 15, 1984. These are core proceedings under 28 U.S.C. § 157(b)(2)(A) and (O) in which final orders and judgments may be entered by a bankruptcy judge subject to the right of appeal under 28 U.S.C. § 158. Venue is proper in this Court pursuant to 28 U.S.C. § 1408.

Findings of Fact

These cases involve similar facts and common issues of law. Nevertheless, each of the Plaintiffs is seeking discrete compensatory damages. In each case, the parties submitted joint stipulations of uncontroverted facts that were supplemented by additional evidence in the form of testimony and exhibits offered at trial.

Joint Stipulations Applicable to All Cases

The following identical stipulations were submitted in each case:

Common Facts

Before filing bankruptcy, Mekeanna Lane, Bobbie Edmonds, and Regina Charity (jointly, the "Borrowers") each obtained an unsecured loan (in principal amounts ranging from $2,100.00 to $4,020.00) from NetCredit and signed a document entitled Consumer Installment Loan Agreement (the "Agreement").3 The Agreement provided that the Borrowers would pay semi-monthly installments of principal and interest to NetCredit. The Agreement also authorized NetCredit to receive payment by electronic funds transfer from a bank account through the ACH network (the "ACH Authorization").4 Payments were automatically withdrawn when due.

At the time of their bankruptcy filings, each Borrower had an active ACH Authorization in place. In each case, NetCredit, after receiving notice of the bankruptcy filing, continued to demand payment and continued to withdraw funds from the Borrowers' bank accounts.5

Mekeanna Lane (Adv. Pro. No. 16-03150-KLP)

Stipulated Evidence

The parties stipulated to the following:6

Evidence Presented at Trial

Ms. Lane filed bankruptcy because she was behind on her mortgage payments, credit cards and automobile payments and, despite working overtime, was unable to catch up. The income from her employment is the sole source of funds to support herself and her nine year old son. She filed under chapter 13 in order to consolidate her debts into a single, more manageable payment and ultimately obtain a discharge.

Sometime after filing her petition, Ms. Lane accessed her bank account electronically and learned that a payment had been withdrawn by NetCredit. This worried and confused her because she understood that the debits from her bank account would cease when she filed bankruptcy. In order to replace the funds and cover outstanding checks, she borrowed money from her mother.

A second postpetition debit by NetCredit required Ms. Lane to again borrow money from her mother. Although her mother has not asked for repayment, borrowing from her mother embarrassed Ms. Lane and made her feel like a burden, as she knew that her mother had limited resources. She worried that something might be wrong with her bankruptcy case. She was upset and angry.

Ms. Lane testified that she had to sign up for overtime to increase her income, requiring her to work extra hours. Because of this, she spent less time with her son. Ms. Lane makes $28.92 per hour. She missed seven hours of work in order to appear at the trial.

NetCredit's sole live witness was Joseph Banks, the Bankruptcy Manager for an entity known as Enova International, Inc. ("Enova"). NetCredit is an online lender that is wholly owned by Enova. Enova also owns at least three other subsidiaries,7 including an entity known as CashNetUSA, a United Kingdom entity (the "UK entity"), and a "business unit" known as Headway. Measuring by volume of loans to customers, NetCredit is smaller than CashNetUSA and the UK entity, although Mr. Banks testified that "its volume kind of exploded in the last couple of years." As the bankruptcy manager for Enova, Mr. Banks is responsible for delegating and overseeing tasks, making personnel decisions, managing his team to ensure that each are properly performing his or her duties, conducting quality assurance tasks, conducting planning related to bankruptcy business practices, and resolving "escalated" customer complaints.

As bankruptcy manager, Mr. Banks supervises a team of four Enova employees. Each individual is solely responsible for bankruptcy-related duties for one of the four Enova subsidiaries specified by Mr. Banks. One of these individuals is solely responsible for managing all the NetCredit accounts of customers who have filed bankruptcy. At the time of Ms. Lane's filing, the individual assigned to handle all of NetCredit's bankruptcy related duties was Dansler Dover.

Mr. Banks testified that NetCredit has tens of thousands, possibly hundreds of thousands, of customers. He estimated that close to ten thousand of those customers have filed bankruptcy. Mr. Dover was assigned all responsibilities relating to these customers, including the processing of bankruptcy notices and the preparation and filing of proofs of claim. In addition, Mr. Dover was tasked with taking phone calls from customers in bankruptcy, which Mr. Banks estimated to average 20 calls a day.

NetCredit's bankruptcy representatives utilize and are primarily guided by a computer-based application known as a "Wiki." Mr. Banks described the Wiki as "a website where our representatives or our employees can search for information. . . . [I]t has our business practices, policies and procedures. And the bankruptcy best practices are held . . . on our Wiki."8 Mr. Dover, as the designated person to manage bankruptcies for NetCredit, was instructed to follow the "business practices" and "process" as set forth on the Wiki.9

When a representative is informed that a customer has filed bankruptcy, Enova's standard practice requires that a bankruptcy case be "opened" by accessing the Wiki and entering the relevant information on the customer's account.10 This process is intended to ensure that no further collection action takes place, and if postpetition ACH withdrawals have already occurred, ensures that refunds to the customers are initiated.11

According to Mr. Banks, the postpetition collection action that took place in Ms. Lane's case occurred because Mr. Dover did not access and follow the correct process on the Wiki. He did not open a bankruptcy case and did not terminate the ACH Authorization.12 Mr. Dover's employment was terminated, and the funds improperly debited from Ms. Lane's account were returned to her.

Mr. Banks stated that after discovering Mr. Dover's mistakes, a quality assurance check was initiated. He did not, however, identify any changes in NetCredit's business practices resulting from the quality assurance check. Aside from the opening of a bankruptcy case on the Wiki and a return of the postpetition withdrawals to Ms. Lane, no remedial action was taken.

NetCredit relies upon the efficacy of its automated system, the Wiki, and the adherence by its employees to its use in order to comply with bankruptcy-related requirements. The Wiki generates automated standard form emails to customers in response to certain prompts.13 An email similar to the "Your Payment Authorization Has Been Revoked" email sent to Ms. Lane (stating that "cancellation of your electronic authorization does not relieve you of your obligation to repay your loan, and . . . all payments are still due on your scheduled installment dates") is automatically generated and routinely sent to customers whose ACH Authorization has been revoked, even if the ACH Authorization was revoked because the customer has filed bankruptcy.14 Mr. Banks believes that the purpose of this email is not to collect a debt and that if he were in bankruptcy he would not think that this email was an attempt to collect a debt. He does not think the words of the email show an attempt to collect a debt.15 NetCredit has not changed the text of this form email and intends to use it whenever an ACH is cancelled for a client who has declared bankruptcy.16

James and Regina Charity (Adv. Pro. No. 16-03121-KLP)

Stipulated Evidence

The parties stipulated to the following:17

Mr. and Mrs. Charity filed bankruptcy because Mr. Charity was out of work due to injury and the couple was behind on their bills. They had been receiving calls from bill collectors and were facing a foreclosure on their home. The bankruptcy was intended to provide relief from creditors' calls, stop the foreclosure, and enable them to pay their debts through the Chapter 13 trustee.

Mrs. Charity testified that she was upset and angry when she continued to receive calls from NetCredit after her bankruptcy filing, although she did not answer most of the calls or they were received by her husband. She wondered whether her attorneys were properly representing her and whether the Chapter 13 trustee was making payments as she had been told he would.

Mrs. Charity discovered the post-bankruptcy debits of her credit union account by checking her account online. She borrowed money from her husband in order to prevent checks she had written from bouncing.19 She had to call other creditors to seek delays in payment and on at least one occasion placed a stop payment to prevent further debits from NetCredit. Her fear that NetCredit would continue to make withdrawals prompted her to close her credit union account, relying upon the advice of counsel.

On May 18, 2016, Mrs. Charity and Jennifer Williams, a representative of NetCredit who works in Enova's call center, spoke by telephone. At that time, Ms. Williams asked Mrs. Charity for the name and telephone number of her bankruptcy attorney, verified Ms. Charity's email address and demanded proof of Mrs. Charity's bankruptcy filing within seven business days before NetCredit would cease collection action. This conversation further confused Mrs. Charity because she had understood that creditor action would cease automatically. NetCredit's demands caused her to again question whether her attorneys were properly advising her.

Mrs. Charity testified that NetCredit's actions affected her work performance,20 created tension and loss of sleep, made her short tempered and adversely affected her relationship with her husband and daughter. After NetCredit ceased collection activities, she testified that these problems largely disappeared.

Mr. Charity's testimony corroborated that the decision to file bankruptcy stemmed from his work-related injury. He recalled Mrs. Charity asking him for money to cover shortfalls resulting from NetCredit's debit of her credit union account. He confirmed that NetCredit continued to call their home phone following the bankruptcy filing but stated that he avoided answering most of the calls or would just hang up the phone.

Mr. Charity stated that Mrs. Charity's attitude and spirit were negatively impacted by NetCredit's actions, which adversely affected her interactions with their children. Their marital relationship and sex life were also negatively affected. Mr. Charity testified that Mrs. Charity's stress was manifested in physical ways, such as developing knots and wrinkles in her face and other changes to her appearance "even to the point that she had hair falling out of her head."21 He added that in their forty years of marriage, he had never seen her so dispirited.

Joseph Banks' prior testimony in the Lane case was incorporated into the record of the Charity case by agreement. In supplemental testimony, Mr. Banks added that the automatic stay violations in this case occurred because Dansler Dover failed to properly follow Enova's business practices related to bankruptcy. He also testified that NetCredit's collection calls to customers are computer-generated. A record is kept of the call, including the date and time, and all calls are recorded. The system is designed to terminate telephone calls automatically once a bankruptcy case is opened. He further testified that once Mrs. Charity informed Ms. Williams of her bankruptcy, Ms. Williams should have "open[ed] a case and utilize[d] the proper scripting."22

Mr. Banks testified that the May 18, 2015, email with the subject line "Bankruptcy Documentation Received" was sent to Mrs. Charity by Ms. Williams after their telephone conversation. Ms. Williams chose the text of this email from an "email bank" contained on the Wiki. The email informed Mrs. Charity that after NetCredit confirmed her bankruptcy no further collection activity would take place. Mr. Banks stated that Ms. Williams chose the incorrect email from the email bank and should have sent an email stating that Mrs. Charity had informed NetCredit of her bankruptcy instead of stating that NetCredit had received documentation of the bankruptcy.23

Collin Edmonds and Bobbie Lane Edmond (Adv. Pro. No. 16-03122-KLP)

Stipulated Evidence

The parties stipulated to the following:24

Evidence Presented at Trial

The Edmondses26 filed bankruptcy because they had gotten behind on their mortgage after paying for a new furnace. They also had IRS debt and "lots of credit cards."27 Another creditor had attached her bank account. They were receiving numerous calls from creditors. They understood that filing bankruptcy would allow them to pay what they could afford, stop the calls from creditors and relieve them from the stress they were under.

Mrs. Edmonds routinely checks her bank account status each morning. On May 31, 2016, she discovered that her account was overdrawn by $544.00 and that NetCredit had debited her account $132.69. She found this very upsetting because she had thought that filing bankruptcy would prevent something like this from happening. Part of the overdraft was $144.00 that was charged in bank fees as a result of the NetCredit debit. She was unable to deposit sufficient funds to bring her account current, and her bank subsequently closed the account.

On June 15, 2016, Mrs. Edmonds received an email from NetCredit thanking her for an ACH payment of $132.69. Mrs. Edmonds was aware that her bank account did not have funds available for this debit and assumed it would add to her overdraft.

A few days later, Mrs. Edmonds began receiving collection calls from NetCredit at home and at work. The calls at work were particularly disruptive and affected her disposition. The phone calls were also upsetting to Mr. Edmonds, though he usually reported them to Mrs. Edmonds and didn't answer them himself.

Before trial, Mrs. Edmonds started working in a new department with her employer. She took two days off from work to attend the trial in this adversary proceeding, which made her nervous about how her new supervisors would perceive her work habits. She works five days a week and makes $63,000.00 annually.

Joseph Banks' prior testimony in the Lane case was incorporated into the record of the Edmonds case by agreement. In supplemental testimony, Mr. Banks testified that the postpetition collection calls and ACH debits took place because the bankruptcy representative for NetCredit, Dansler Dover, did not follow business practices related to NetCredit's bankruptcy process. He acknowledged that NetCredit had attempted, without success, to debit Mrs. Edmonds' bank account on June 15, 2016. In order to "fix" NetCredit's mistakes, the funds improperly debited from Mrs. Edmonds' account were returned to her and Mr. Dover was terminated from his employment. Mr. Banks also initiated "quality-assurance checks related to NetCredit and bankruptcy."28 In connection with the quality-assurance check, Mr. Banks did not verify how many cases Mr. Dover mishandled nor did he investigate how many times NetCredit engaged in improper postpetition conduct with a debtor who had declared bankruptcy.

A couple of months before Mr. Dover's mishandling of the Charity bankruptcy, Mr. Banks had discussed Mr. Dover's job performance with him. He had additional conversations with Mr. Dover after receiving the complaint in the Charity case. Mr. Banks had thought his conversations with Mr. Dover about the importance of not violating the automatic stay were adequate steps to address Mr. Dover's performance problems at that time.

Conclusions of Law

The parties agree that in each of the three cases before the Court NetCredit willfully violated the automatic stay.29 As stipulated by the parties, the only issues here are to what extent the Court should award damages.

The remedies for willful violations of the automatic stay are set forth in § 362(k)(1) of the Bankruptcy Code. That section provides generally that "an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages." An award of actual damages is mandatory. Ojiegbe v. Walter (In re Ojiegbe), 539 B.R. 474, 479 (Bankr. D. Md. 2015).30 The burden is on the debtor to establish damages by a preponderance of the evidence, and the award "must be founded on concrete, non-speculative evidence." Id. (quoting In re Seaton, 462 B.R. 582, 595 (Bankr. E.D. Va. 2011)).31

Compensatory Damages

Actual damages include those actually incurred by the debtor. Skillforce, Inc. v. Hafer, 509 B.R. 523, 534 (E.D. Va. 2014). Actual losses may include lost time damages, out-of-pocket expenses and emotional damages. In re Ojiegbe, 539 B.R. at 479.

Although emotional distress is generally included as an available component of "actual damages" under § 362(k),32 courts are divided over when it is appropriate to award emotional distress damages. This Court, in In re The Original Barefoot Floors of America, Inc., 412 B.R. 769, 776-77 (Bankr. E.D. Va. 2008) and more recently in In re Seaton, 462 B.R. 582, 600-603 (Bankr. E.D. Va. 2011), after noting the absence of definitive precedent in the Fourth Circuit, examined cases decided by other circuit courts and the decisions of other courts within the Fourth Circuit before concluding that damages for emotional distress may be allowed under § 362(k)(1).

In Seaton, Judge St. John found that a number of courts, recognizing that emotional damages may be more easily manufactured than other types of damages, have held that emotional damage awards under § 362(k) must be supported by "specific information" rather than "generalized assertions." 462 B.R. at 601 (citing Young v. Repine (In re Repine), 536 F.3d 512, 521-22 (5th Cir. 2008); Fleet Mortg. Grp., Inc. v. Kaneb, 196 F.3d 265, 270 (1st Cir.1999)).33 Judge St. John held that the appropriate standard is that genuine emotional distress damages should be compensable, even in the absence of related financial loss, but only if the debtor can clearly establish that he suffered a significant harm and demonstrates a causal connection between the significant harm and the actions taken in violation of the stay. 462 B.R. at 603.34 This standard has been adopted by other circuits and is the standard that should be applied in the instant cases.35

Mekeanna Lane's Compensatory Damages

After Ms. Lane's bankruptcy filing, NetCredit withdrew $83.94 from her bank account on two separate occasions. All of the improperly withdrawn funds, totaling $167.88, were returned to Ms. Lane by NetCredit prior to the trial in this case.

Ms. Lane established that she missed seven hours of work due to NetCredit's improper actions. She makes $28.92 per hour. Accordingly, Ms. Lane's actual damages include $202.44 in lost income. Ms. Lane presented no other evidence of financial loss associated with NetCredit's actions. She claimed no other out of pocket expenses.

Ms. Lane's claim for damages for emotional distress is primarily based on the embarrassment and guilt she claims to have suffered by having to borrow money from her mother after NetCredit debited her bank account. NetCredit's improper postpetition communications and the improper withdrawals caused her to feel confused and angry. Ms. Lane also testified that it was necessary to increase her hours at work in order to make up for her financial loss and that her increased time at work left her unable to devote as much time to her nine year old son as she would have liked.

Applying the standard set forth in Seaton for an award of emotional distress damages, the Court finds that Ms. Lane has failed to establish that she suffered significant emotional harm as a result of NetCredit's actions. Her assertions of emotional distress were vague, generalized, and otherwise not established with any degree of specificity.36

Ms. Lane's claim that her relationship with her son suffered due to NetCredit's actions is based on her assertion that debiting her bank account a total of $167.88, an amount that she was able to borrow from her mother and that was subsequently returned by NetCredit, required her to work extra hours and spend less time with her son. The Court does not find this claim of distress to be credible. Ms. Lane acknowledged that she had already been working overtime in an effort to avoid a bankruptcy filing. The additional hours worked after her bankruptcy filing that could be attributable to NetCredit's automatic stay violations would have been relatively inconsequential.37 More importantly, Ms. Lane again presented no evidence of specific harm to her relationship with her son but instead offered only generalized assertions.

Ms. Lane incurred actual compensatory damages in the amount of $202.44 resulting from lost income. She has not met her burden of establishing by a preponderance of the evidence that she is entitled to damages for emotional distress.

James and Regina Charity's Compensatory Damages

NetCredit withdrew $175.22 from Mrs. Charity's credit union account on two occasions, once on April 29, 2016, and again on May 18, 2016, after Mr. and Mrs. Charity filed bankruptcy. On July 22, 2016, NetCredit returned $350.44 to Mr. and Mrs. Charity. Therefore, at the time of trial, all funds improperly withdrawn had been returned.

Mrs. Charity incurred two overdraft fees of $30.00 each, along with a stop payment fee of $25.00, that were caused by NetCredit's improper withdrawals from her credit union account. Those charges, totaling $85.00, were not reimbursed by NetCredit. Mr. and Mrs. Charity drove a total of 132 miles to attend the trial.38 There is no evidence that Mr. and Mrs. Charity incurred any other financial losses as a result of NetCredit's stay violations.

NetCredit's post-bankruptcy collection calls and credit union account withdrawals caused Mrs. Charity to suffer inconvenience, confusion, stress, disappointment, and anger. She was required to borrow money from her husband in order to replenish her credit union account and contend with other creditors whose payments were delayed. It became necessary to place a stop payment on her credit union account in order to prevent future unauthorized withdrawals.

The effect that NetCredit's continuing collection activities had on Mrs. Charity went beyond the normal stress and frustration that would ordinarily be associated with dealing with a creditor that fails to readily comply with a bankruptcy stay. In this case, NetCredit's actions caused an emotional harm that was manifested by changes in Mrs. Charity's behavior and physical appearance. Mr. Charity testified that there was a change in Mrs. Charity's attitude and spirit that he had not previously seen during their forty years of marriage. He stated that her demeanor and appearance changed "even to the point that she had hair falling out of her head." The evidence clearly establishes that Mrs. Charity incurred some degree of significant emotional harm as a result NetCredit's stay violations.

Despite Mr. Charity's unchallenged testimony, the extent of Mrs. Charity's emotional distress is difficult to ascertain. Without corroborating medical evidence or circumstances that would make the reasonable likelihood of significant emotional harm obvious, it is difficult to distinguish the harm caused by a violation of the automatic stay from other sources of stress typically experienced by many debtors in bankruptcy.39 In Mrs. Charity's case, her questionable contention that NetCredit's stay violations led to work-related stress and had adverse effects on her employment creates some uncertainty regarding the sources of her emotional distress. Mrs. Charity testified that she was employed as a teacher at Surry County High School and that the collection calls, some of which came to her in the classroom and others through the school office, were very embarrassing and frustrating. Her testimony was that these workplace calls contributed to the emotional distress she claims to have suffered due to NetCredit's stay violations. The record is clear, however, that Mrs. Charity retired from teaching on July 1, 2015, which was more than nine months before her bankruptcy filing. Therefore, the embarrassing calls to her place of employment must have occurred before she filed bankruptcy. Moreover, as she and Mr. Charity acknowledged, their bankruptcy filing was intended to provide relief from stressful creditor calls and foreclosure proceedings. It is therefore reasonable to conclude that some degree of Mrs. Charity's emotional distress was derived from sources other than the stay violations. Mrs. Charity's association of NetCredit's pre-bankruptcy workplace calls to her emotional damages claim bears this out.

Although the Court concludes that Mrs. Charity has established by a preponderance of the evidence that she clearly suffered significant emotional harm, it can award only those actual damages proximately caused by NetCredit's stay violations.40 In this case, as in Seaton, the amount of damages should be proportionate to the actions of NetCredit that took place after Mrs. Charity's bankruptcy filing.41 Accordingly, the Court will award damages for emotional distress to Mrs. Charity in the amount of $1,000.00.

Although the Amended Complaint includes Mr. Charity as a plaintiff and seeks actual damages on his behalf, it is clear that the debt to NetCredit was owed solely by Mrs. Charity, NetCredit's post-bankruptcy collection actions were directed only at Mrs. Charity, and the improper withdrawal of funds were from a credit union account owned solely by Mrs. Charity.42 Furthermore, Mr. Charity offered no evidence of actual damages on his own behalf.43 Mr. Charity has failed to meet his burden of proving by a preponderance of the evidence that he incurred any actual damages. He is not entitled to an award for actual damages.

Mrs. Charity has established by a preponderance of the evidence that she has incurred actual damages in the amount of $1,155.63, representing $85.00 in unreimbursed credit union charges, $70.63 in travel expenses44 and $1,000.00 for emotional distress. Accordingly, she is entitled to actual compensatory damages in the amount of $1,155.63.

Collin and Bobbie Lane Edmonds' Compensatory Damages

Mr. and Mrs. Edmonds filed a joint Chapter 13 bankruptcy on May 20, 2016. After receiving the Notice of Bankruptcy, NetCredit withdrew $132.69 from Mrs. Edmonds' bank account. She was charged an overdraft fee of $144.000 as a result of NetCredit's withdrawal. NetCredit subsequently returned $132.69 to Mrs. Edmonds. She has not been reimbursed for her overdraft fee.

Mrs. Edmonds testified that she used two vacation days in order to appear at trial. She is a salaried employee, making $63,800.00 annually. She drove fifteen miles each way to attend trial, which took place over one day.

Much of the testimony at trial centered on the distress suffered by Mrs. Edmonds upon discovering that her bank account was overdrawn by $544.00 after NetCredit withdrew $132.69 on May 31, 2016. Mrs. Edmonds testified that it was "very emotional" for her. Mr. Edmonds described it as upsetting.

NetCredit also placed numerous postpetition collection calls to Mrs. Edmonds, both to her cell phone and to her workplace. Mrs. Edmonds was not particularly disturbed by the calls directed to her cell phone but felt harassed by the calls to her work phone; nevertheless, her only indication of any associated emotional harm was her testimony that it affected her in how she "carried herself" at work. Mr. Edmonds described the calls as upsetting to both himself and his wife, although he did not answer the calls.

Other than the overdraft fee of $144.00 and the expenses associated with attending the trial, Mrs. Edmonds presented evidence of no other unreimbursed expenses as a consequence of NetCredit's actions. Mr. Edmonds presented no evidence of financial loss.

Mrs. Edmonds' claim for damages for emotional distress due to NetCredit's stay violations fails on two accounts. First is her failure to demonstrate that she suffered significant harm. Mrs. Edmonds presented only generalized assertions that NetCredit's actions were upsetting. Although one might argue that the numerous phone calls placed to her place of employment were egregious, Mrs. Edmonds' general assertions that the calls distracted her and affected how she carried herself at work do not support a determination that NetCredit's actions were so egregious as to have caused her significant emotional harm.

Second, Mrs. Edmonds has failed to demonstrate that the overdraft of her bank account, which she described as a "very emotional" episode, was proximately caused by NetCredit's stay violation. NetCredit debited the sum of $132.69 and, as a consequence, her bank charged an overdraft fee of $144.00, for a total reduction in her account of $276.69. Mrs. Edmonds testified, however, that her account was overdrawn by $544.00. It follows that the overdraft did not occur solely as a result of NetCredit's actions but would have occurred, albeit to a lesser extent, even if NetCredit had not made the withdrawal.

Mrs. Edmonds incurred actual compensatory damages in the total amount of $415.25, resulting from bank overdraft charges in the amount of $144.00, lost income in the amount of $255.2045 and $16.0546 in travel expenses. She has not met her burden of establishing by a preponderance of the evidence that she is entitled to damages for emotional distress.

Mr. Edmonds' claim suffers from the same deficiencies as that brought by Mr. Charity. The debt to NetCredit was owed solely by Mrs. Edmonds, the bank account that was debited was owned solely by Mrs. Edmonds, and the post-bankruptcy collection activities were directed only at Mrs. Edmonds. Mr. Edmonds has failed to meet his burden of proving by a preponderance of the evidence that he incurred any actual damages. He is not entitled to an award for actual damages.

Punitive Damages

Section 362(k)(1) of the Bankruptcy Code provides that an individual injured by a willful violation of the stay may, in "appropriate circumstances," recover punitive damages.47 At least one Plaintiff in each of the three adversary proceedings was injured by NetCredit's willful violation of the automatic stay. Accordingly, the Court must determine whether the circumstances are appropriate for an award of punitive damages.

The term "appropriate circumstances" is not defined in § 362. In Green Tree Servicing, LLC, v. Taylor (In re Taylor), 369 B.R. 282, 289 (S.D. W.Va. 2007), Judge Copenhaver, after noting the lack of uniform guidance on what is meant by "appropriate circumstances," listed several standards that courts have adopted. Some courts have awarded punitive damages after determining that the creditor acted in "arrogant defiance of federal law." Id.48 Other courts have considered four factors: (1) the nature of the defendant's conduct, (2) the defendant's ability to pay, (3) the motives of the defendant, and (4) any provocation by the debtor. Id.49 In Seaton, Chief Judge St. John indicated that punitive damages would be appropriate if the court were to find egregious or vindictive conduct "resembling a specific intent" to violate the stay.50

Applying any of these standards, it is appropriate to award punitive damages in these cases. NetCredit is an institutional creditor that has not only repeatedly violated the automatic stay in cases involving multiple debtors in clear disregard of the provisions of the Bankruptcy Code, but it has given no indication that it will discontinue doing so.

NetCredit designated Joseph Banks to be its sole representative to appear and testify on NetCredit's behalf. His testimony essentially constitutes the entirety of NetCredit's defense.

Mr. Banks, Enova's bankruptcy manager, oversees a team of four individuals, each individual having sole responsibility for managing all of the bankruptcy accounts of a particular Enova subsidiary. One of those individuals is solely responsible for managing all of the bankruptcy accounts for NetCredit, an online lender wholly owned by Enova. Mr. Banks estimated that the individual assigned to NetCredit is responsible for close to ten thousand bankruptcy accounts.

When the violations occurred in these cases, the individual responsible for managing NetCredit's bankruptcy accounts was Dansler Dover. Mr. Dover's responsibilities included processing bankruptcy notices, preparing and filing proofs of claim and handling all telephone calls from customers who filed bankruptcy.

NetCredit's bankruptcy processes are managed by a computer based application known as a Wiki, and NetCredit's acts and omissions are totally dependent on the efficacy of the application and its appropriate implementation by the bankruptcy representative. If either the application or the individual utilizing it is deficient, then the processes for managing bankruptcy accounts will be compromised. The evidence in these cases is that both the Wiki and Mr. Dover's performance were deficient.

Mr. Banks testified that Mr. Dover's employment was terminated because he did not follow the business practices that were included on the Wiki. Before the stay violations took place in these cases, Mr. Banks had found it necessary to have discussions with Mr. Dover regarding his poor job performance; however, he took no remedial actions other than to point out Dover's mistakes.51 Mr. Banks further testified that he commenced "quality-assurance checks for NetCredit bankruptcy to mitigate risk and assure that this doesn't occur again."52 On cross examination, however, he admitted that the quality assurance program was not implemented until after months after he was made aware of these stay violations and only after litigation had been commenced.53 Upon being pressed further, Mr. Banks also acknowledged that the department charged with implementing the quality assurance program would not be responsible for revising the system-generated correspondence that routinely results in stay violations.54 After hearing Mr. Banks' testimony, the Court is of the opinion that the "quality assurance program" was designed primarily to create the erroneous perception for purposes of this litigation that NetCredit has taken significant steps to prevent future stay violations.

Mr. Banks' testimony demonstrates that NetCredit's bankruptcy department is understaffed, undertrained, and inadequately supervised. It also establishes that NetCredit has not implemented appropriate measures to address these inadequacies or the deficiencies inherent in the application utilized to manage its bankruptcy cases. His testimony concerning the routine practice whereby, in response to receiving a bankruptcy notice and terminating an ACH Authorization, NetCredit generates correspondence advising the bankrupt customer that "cancellation of your electronic authorization does not relieve you of your obligation to repay your loan, and that all payments are still due on your scheduled installment dates" is particularly telling:

Mr. Banks' testimony establishes that NetCredit's system is designed so that every customer, including those in bankruptcy, whose ACH Authorization is terminated receives correspondence demanding future payment. Even if Mr. Dover had properly employed the software application, a stay violation was inherently designed to take place.56 Moreover, NetCredit has not taken steps to initiate the process necessary to prevent future stay violations because it would be "an exhaustive process."

It is difficult to comprehend how Mr. Banks, the individual in charge of managing all of the bankruptcy accounts for Enova and its subsidiaries, would fail to recognize that sending correspondence to a customer who has filed bankruptcy stating that "all payments are still due on your scheduled installment dates" is not an "act to collect . . . or recover a claim against the debtor that arose before commencement of the case."57 It is even more baffling that Mr. Banks would continue to display this fundamental misunderstanding throughout the trial of these cases. Yet, it is evident that Mr. Banks remains of the opinion that there is no flaw in NetCredit's bankruptcy related procedures. And if Mr. Banks, who is in charge of supervising Enova's bankruptcy team,58 lacks a basic understanding of the prohibitions associated with the automatic stay, then one may infer that his lack of understanding permeates these entities.59

The Court finds that NetCredit, as an institution, either does not fully grasp or refuses to acknowledge the importance and purpose of the automatic stay.60 The Court further finds that NetCredit presently has no intention of implementing the changes necessary to prevent future violations. Such conduct constitutes a reckless disregard of NetCredit's statutory duties in arrogant defiance of federal law.

The Agreements executed by the Plaintiffs in these cases and attached as Exhibit A to each Joint Stipulation of Uncontroverted Facts contain identical provisions authorizing the lender to electronically debit installment payments from the borrowers' bank accounts. It is logical to conclude that many, if not most, of NetCredit's customers have likewise agreed to ACH Authorizations in order to make installment payments. Since NetCredit has approximately ten thousand customers who have filed bankruptcy,61 it follows that there likely are thousands of customers whose bankruptcies have triggered a termination of automatic withdrawals and who would have received correspondence from NetCredit informing them that despite their bankruptcy filings they remain obligated to make their installment payments.

NetCredit's failure to employ and properly train an adequate number of employees to manage its accounts in bankruptcy, coupled with its unwillingness to contribute the resources necessary to correctly deploy the software applications utilized in its bankruptcy processes, suggests that NetCredit's business model favors concentrating its resources on originating loans and collecting payments on active accounts while devoting minimal resources to borrowers who have filed bankruptcy.62 Even if this is not an accurate assessment of its business plan, it is evident that NetCredit's attention to its customers who have filed bankruptcy is wholly inadequate.

The Court is not bound by specific statue or precedent when determining the amount of punitive damages to award under § 362(k)(1). "Although the Supreme Court has emphasized that punitive damage awards violate due process when they constitute an arbitrary deprivation of property, the Court has repeatedly `decline[d] . . . to impose a bright-line ratio which a punitive damages award cannot exceed.'" Saunders v. Equifax Info. Servs., L.L.C., 469 F.Supp.2d 343, 348 (E.D. Va. 2007), aff'd sub nom. Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (4th Cir. 2008) quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). See also Cisson v. C.R. Bard, Inc. (In re C.R. Bard, Inc.), 810 F.3d 913, 931 (4th Cir. 2016).63 Unlike compensatory damages, which address a party's "concrete loss," punitive damages aim at "deterrence and retribution." Saunders, 469 F.Supp.2d at 348, quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003).

The Supreme Court has identified "three guideposts" that a lower court should consider when evaluating punitive damages awards: (1) the degree of reprehensibility of the defendant's misconduct, (2) the disparity between the actual or potential harm suffered and the punitive damages award (the ratio between punitive and compensatory damages), and (3) the difference between the punitive damages awarded and civil penalties authorized or awarded in comparable cases. State Farm, 538 U.S. at 418; accord Cisson v. C.R. Bard, Inc., 810 F.3d at 931; Saunders, 469 F.Supp.2d at 350.64 In short, a punitive damages award "must be based on the facts and circumstances of the defendant's misconduct" and the punishment must be "reasonable and proportionate to the amount of harm caused." Saunders, 469 F.Supp.2d at 350 (citing State Farm, 538 U.S. at 425-26).

The reprehensibility of a defendant's conduct, the first of the Supreme court's guideposts, may be assessed by considering various factors including, but not limited to, whether the conduct "evinced an indifference to or a reckless disregard" for the rights of others, whether the target of the conduct was financially vulnerable and whether the conduct involved repeated actions. State Farm, 538 U.S. at 418 (citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996)).65 In each of these cases, NetCredit's conduct showed a reckless disregard of the rights of the Plaintiffs, targeted individuals who were financially vulnerable (debtors in bankruptcy) and involved repeated actions.66 Therefore, under Fourth Circuit standards, NetCredit's conduct is "sufficiently reprehensible to justify an award of punitive damages." Saunders, 526 F.3d at 153.

The second guidepost involves the actual harm suffered by the Plaintiffs compared to the punitive damages award. Without including the Plaintiffs' attorneys' fees, this consideration would seem to favor a more modest punitive damages award in light of the relatively small compensatory damages awarded in these cases. Various courts, including the Fourth Circuit, have recognized, however, that the ratio of compensatory to punitive damages has less significance when the amount of compensatory damages is relatively small.

Saunders, 526 F.3d at 154. Despite the small amount of compensatory damages awarded in these cases, the award of punitive damages must be significant enough to punish the violator and serve as a meaningful deterrent. Id. Thus, a sum based on a modest multiple of the parties' actual damages is insufficient.

The third guidepost requires an examination of amounts awarded in comparable cases. Penalties for automatic stay violations vary depending on the circumstances and the parties involved; as such, there are few opportunities for comparison. There are, however, numerous cases in which violations of the automatic stay have resulted in considerable punitive damage awards. See, e.g., Sundquist v. Bank of Am., N.A. (In re Sundquist), 566 B.R. 563 (Bankr. E.D. Cal. 2017), appeal docketed, No. EC-17-1103 (B.A.P. 1st Cir. Apr. 11, 2017) (awarding debtors $1,074,581.50 in actual damages and $45,000,000.00 in punitive damages);67 In re Johnson, No. 15-50053, 2016 WL 659020 (Bankr. W.D.N.C. Feb. 17, 2016) (awarding debtors $300 in actual damages for expenses in traveling to and from court, legal fees of $3,297.23 and $54,000.00 in punitive damages, calculated at $100 per phone call for 540 calls made to debtors over a six month period in violation of the automatic stay).

One of the primary purposes of awarding punitive damages for automatic stay violations is to deter future misconduct. Saunders, 526 F.3d at 152; In re Johnson, 2016 WL 659020 at *4 ("In determining the amount of a punitive damages award, the court is primarily concerned with changing the behavior that resulted in the stay violation, so the amount awarded should motivate the creditor to correct its conduct. Deterrence to others may be a relevant factor as well.") (internal citation omitted); In re Riddick, 231 B.R. 265, 269 (Bankr. N.D. Ohio 1999) ("[T]he primary purpose of punitive damages is to cause change in the [offending party's] behavior."). The amount of punitive damages assessed in these cases must be sufficient to motivate NetCredit to devote the resources necessary to correct the deficiencies in its bankruptcy procedures.

The Plaintiffs are seeking an award of punitive damages in the approximate amount of $600,000.00 in each of these cases.68 The Plaintiffs argue that these awards would be appropriate given that Enova, NetCredit's parent company, has a net worth of $233,000,000.00.69 The Court does not have reliable evidence that the value of NetCredit, as an independent entity, approaches that of its parent company;70 however, the parent company's value reflects the existence of considerable worth in its subsidiaries. NetCredit has tens of thousands, perhaps hundreds of thousands of customers.71 While it is smaller than Enova's other subsidiaries, "its volume kind of exploded in the last couple of years."72 Therefore, the Court has sufficient information available to consider NetCredit's value as one factor in determining punitive damages awards, particularly since awarding punitive damages in these cases is intended to deter future misconduct.73

The Court does not consider NetCredit's value to be a reason to consider reducing the punitive damages awards. NetCredit chose not to introduce reliable evidence of its net worth and, therefore, failed to meet its burden to do so.74

NetCredit's conduct is sufficiently reprehensible to impose punitive damages awards in each of these cases, and its size and sophistication suggest that a substantial award is necessary to deter it from routinely engaging in future stay violations. Nevertheless, the amounts sought by the Plaintiffs are too high. The Court is of the opinion that the goals of punishment and deterrence may be achieved by a more measured response than that sought by the Plaintiffs, albeit one that not only properly addresses NetCredit's harm to the Plaintiffs but also recognizes its societal harm.

In recent years, courts, legislators, and commentators have questioned whether the traditional model of giving large punitive damage awards solely to a claimant who is already receiving compensatory damages properly serves the interests of justice.75 If the claimant is already being made whole by the compensatory award, many argue that it is appropriate to consider the extent to which societal interests are implicated and to allocate a portion of a punitive damages award to an entity that furthers those interests. Otherwise, the claimant receives a windfall in the form of this societal interest component.76

The dilemma involved in achieving the goal of awarding sufficient punitive damages for automatic stay violations without simultaneously providing an individual windfall was recently confronted by Judge Klein in Sundquist v. Bank of Am., N.A. (In re Sundquist), 566 B.R. 563 (Bankr. E.D. Cal. 2017), appeal docketed, No. EC-17-1103 (B.A.P. 1st Cir. Apr. 11, 2017). There, Judge Klein, after examining the judicial, legislative and scholarly support for split recoveries of punitive damage awards, concluded "that § 362(k)(1) permits a portion of punitive damages awarded to an individual injured by willful violation of the automatic stay to be channeled . . . to entities that serve the interests of preventing the willful violator's transgressions in the future." Id. at 618.

The decision in Sundquist to allocate a portion of the punitive damages award to entities serving societal interests was based, in part, on federal common law.77 The court pointed to circuit court precedent in Engquist v. Oregon Department of Agriculture, 478 F.3d 985 (9th Cir. 2007), aff'd on other grounds, 553 U.S. 591 (2008), in which the Ninth Circuit struck down constitutional and common law challenges to Oregon's statutory allocation of a portion of a punitive damages award in a tort case to the Oregon Criminal Injuries Compensation Account. 478 F.3d at 999-1007.

Precedent similar to Engquist exists in the Fourth Circuit. In Cisson v. C.R. Bard (In re C.R. Bard, Inc.), 810 F.3d 913, 931 (4th Cir. 2016), the Fourth Circuit upheld a district court's ruling that a Georgia split-recovery statute directing that seventy-five percent of any punitive damages award resulting from a product liability judgment be paid to the state does not violate the Takings Clause of the Fifth Amendment. Id. at 931-32.78 The Fourth Circuit held, as did the district court from which the appeal arose, that the plaintiff failed to show that she has "a constitutionally protected property interest" in the punitive damages award. Id., citing Washlefske v. Winston, 234 F.3d 179, 184 (4th Cir. 2000).79

Neither statutory dictate nor binding precedent mandates that punitive damages awarded under § 362(k)(1) may only be directed to the Plaintiffs in these cases. The amount of punitive damages required to redress the harm caused to the parties and serve the legitimate societal interests is greater than "what principles of fairness would justify" awarding solely to the Plaintiffs. See Sundquist, 566 B.R. at 614. Accordingly, this Court will adopt the conclusions and methodologies espoused in Sundquist and apply them to these cases.

After determining that § 362(k)(1) permits the court to channel a portion of a punitive damages award to public service organizations, Judge Klein addressed the appropriate allocation and determined that "[a] solution based on common sense is to direct to a public purpose the portion of legitimate punitive damages that exceed what private victims ought to be allowed to retain—the societal interest component of punitive damages." Sundquist, 566 B.R. at 616. He further concluded that the public purpose should be aimed at redressing the underlying misconduct. Id.

In Sundquist, the court noted the disadvantages consumers have in finding effective legal representation capable of competing with counsel typically representing sophisticated creditors and found that the societal component of the punitive damages award should be directed to entities focused on consumer law education and "leading public service consumer law organizations." Id. Similarly, NetCredit's conduct in these cases reflects the need to direct additional resources to financially distressed consumers who have limited means to defend themselves against aggressive creditors.80

NetCredit's actions have been equally egregious in each of these cases. Mekeanna Lane, Regina Charity and Bobbie Lane Edmonds will be awarded punitive damages pursuant to § 362(k)(1) in the amount of $100,000.00 each. Of the $100,000.00 that each is to receive, each of these Plaintiffs is enjoined to deliver $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia81 (minus all taxes, if any, each plaintiff must pay on account of those sums). There shall be a remittitur of the § 362(k)(1) punitive damages to $15,000.00 to each plaintiff if, and only to the extent that, NetCredit contributes $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia on account of each of these Plaintiffs.

Attorneys' Fees

"[A]n individual injured by any willful violation of [the automatic] stay shall recover actual damages, including costs and attorneys' fees . . . ." 11 U.S.C. § 362(k)(1) (emphasis added). The plain language of the statute states that attorneys' fees are actual damages under this section. Duby v. United States (In re Duby), 451 B.R. 664, 674 (B.A.P. 1st Cir. 2011). In order to be recoverable, however, the attorneys' fees must be shown to be reasonable and necessary. Skillforce, Inc. v. Hafer, 509 B.R. at 534 (citing In re Seaton, 462 B.R. at 605). Furthermore, "before the analysis of reasonableness and necessity of claimed attorneys' fees even begins, a debtor must first demonstrate, by a preponderance of the evidence, that she is actually liable for the claimed fees." Skillforce at 534.

The Plaintiffs in these cases are each represented by the same attorneys. These attorneys, on behalf of all of the Plaintiffs, submitted the Application, which includes declarations and exhibits documenting hours spent by the attorneys and their staff multiplied by their hour rates. Along with subsequent filings that include additional declarations and exhibits, the Application constitutes the request for awards of attorneys' fees and expenses pursuant to § 362(k)(1).82

Counsel for the Plaintiffs contend that the Court should apply the "lodestar" method described in Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, (2010), which is based on multiplying the reasonable number of hours spent by the attorneys and their employees by reasonable hourly rates, to determine what constitutes reasonable fees. "The Supreme Court has indulged a `strong presumption' that the lodestar number represents a reasonable attorneys' fee. The Court recently explained that this presumption can only be overcome `in those rare circumstances where the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee.'" McAfee v. Boczar, 738 F.3d 81, 89-90 (4th Cir. 2013), quoting Perdue, 559 U.S. at 542.

The Application sets forth a combined lodestar amount of $169,326.29.83 A supplemental application (the "Supplemental Application") filed in each case increased this amount by $19,347.00 to $188,673.29. In the Supplemental Application, Plaintiffs' counsel seeks an upward enhancement of the lodestar amount of $188,673.29 by a multiple of 1.5 to $283,009.94 plus reimbursement of expenses and costs in the amount of $2,691.05.

In each of the adversary proceedings, Plaintiffs also filed a separate "Supplemental Brief on Outstanding Issues" (hereinafter referred to respectively as the "Charity Supplemental Brief," the "Edmonds Supplemental Brief" and the "Lane Supplemental Brief" and, collectively, as the "Supplemental Briefs"). The Charity Supplemental Brief represents that the "lodestar" attributable to the Charity case is $71,423.43. The Edmonds Supplemental Brief asserts a lodestar amount of $70,511.43 and the Lane Supplemental Brief sets forth a lodestar of $69,471.93. Their combined amounts total $211,406.79. Presumably, after their most recent supplement, the Plaintiffs are seeking combined fees in the enhanced amount of $317,110.19, which reflects a multiplier of 1.5 on the combined lodestar amounts.

NetCredit objects to the Application, arguing that the Plaintiffs have failed to demonstrate that they have incurred damages in the form of attorneys' fees and that the amounts being sought are neither reasonable nor necessary. First, NetCredit asserts that the fees should be denied due to the failure of Plaintiffs' counsel to comply with the rules applicable to retention and disclosure of compensation. Second, NetCredit maintains that if fees are to be awarded, the amount of fees sought by Plaintiffs' counsel is excessive and, were the Court to properly apply the lodestar method, the appropriate fee amount would be $139,419.82.84 Finally, NetCredit contends that the Plaintiffs should be denied their combined claim for reimbursement of costs and expenses in the amount of $2,691.05 because the claim has not been adequately substantiated.

Section 329(a) of the Bankruptcy Code provides that "[a]ny attorney representing a debtor in a case under this title, or in connection with such a case . . . shall file with the court a statement of the compensation paid or agreed to be paid . . . ." Bankruptcy Rule 2016(b) requires that the statement be filed and transmitted to the U.S. Trustee within 14 days after the order for relief or, where a supplemental statement is required, within 14 days after any payment or agreement not previously disclosed.85 The phrase "in connection with" has been broadly interpreted to include any services that affect the bankruptcy estate. See In re Frye, No. 15-10242, 2017 WL 1364973, at * 6 (Bankr. D. Vt. Apr. 12, 2017); In re Gorski, 519 B.R. 67, 72 (Bankr. S.D.N.Y. 2014) ("[I]f it can be objectively determined that the services rendered or to be rendered by the attorney have or will have an impact on the bankruptcy estate," then those services are considered to be "in connection with" the bankruptcy case).86 An action based on a violation of the automatic stay "is at the heart of enforcement of bankruptcy law." Sundquist, 566 B.R. at 596. Each of these adversary proceedings involves a claim for damages for automatic stay violations, and the outcome of each will have an effect its bankruptcy estate. Consequently, all of the attorneys representing the debtors in these adversary proceedings are representing the debtors "in connection with" their bankruptcy cases and are therefore required to comply with Bankruptcy Rule 2016(b). Furthermore, all fees sought by counsel are subject to review, regardless of the source of payment. Burd v. Walters (In re Walters), 868 F.2d 665, 668 (4th Cir. 1989) ("We are of [the] opinion that any payment made to an attorney for representing a debtor in connection with a bankruptcy proceeding is reviewable by the bankruptcy court notwithstanding the source of payment.").

All of the Plaintiffs are represented by the same three law firms.87 On March 2, 2017, a member of each law firm filed a substantially identical document entitled "Disclosure of Compensation of Attorney for Plaintiffs in Adversary Proceedings" in each of the three adversary proceedings (the "Attorney Disclosures").88 The Attorney Disclosures generally conform to the standardized Local Form 2030edva89 that is acceptable for use in disclosing the compensation of an attorney for a chapter 13 debtor in this District, pursuant to § 329(a) and Bankruptcy Rule 2016(b). Each of the Attorney Disclosures provides that counsel has "agreed to accept the Lodestar amount, calculated using my current hourly rate as of the date fees are awarded, plus expenses." Each of the Attorney Disclosures lists the source of compensation paid or to be paid as "Other" and states "[f]ees to be paid by Defendants upon approval by the Court." Each Attorney Disclosure also provides that "[f]ees approved by the Court will be shared on a pro rata basis, based upon the respective attorneys' Lodestar amounts, between [the three law firms]." Each of the Attorney Disclosures also contains a certification that the representations therein are "an accurate statement of any agreement or arrangement for payment . . . for representation of the debtor(s) in this adversary proceeding." The proof of service attached to each Attorney Disclosure certifies that it was served on the debtor/plaintiff, the standing chapter 13 trustee and the U.S. Trustee. But for their untimeliness, the Attorney Disclosures appear to satisfy the requirements of § 329(a) and Bankruptcy Rule 2016(b).90 The Attorney Disclosures establish that in each case the Plaintiffs have agreed to compensate their attorneys based on the "Lodestar" method (hourly rates multiplied by the reasonable number of hours expended), subject to approval by the Court.

Although the failure to timely or properly comply with the rules governing disclosure of compensation may justify the imposition of sanctions, including the denial of attorneys' fees,91 it would not be appropriate to deny the Plaintiffs' claims for attorneys' fees in these cases due to the untimely filing of at least two of the Attorney Disclosures. First, just as reducing punitive damages solely to avoid a perceived windfall to the individual bringing the action would enable a wrongdoer to avoid paying the societal component of punitive damages, a denial of attorneys' fees based solely on the untimely filing of disclosures of compensation by Plaintiffs' counsel would primarily benefit NetCredit, the wrongdoer in these cases.92 Second, the law firm whose services comprise the majority of fees incurred timely filed Rule 2016(b) disclosures in each of the Plaintiffs' underlying chapter 13 cases that, by reference to the Local Rules of this Court, indicated that fees for representation in adversary proceedings would be determined on the basis of time and expense.93 Finally, counsel for the Plaintiffs have indicated that they will seek payment only to the extent that NetCredit is the source of their compensation.94

A sanction for failure to comply with the disclosure requirements of § 329 and Rule 2016(b) "should be `commensurate with the egregiousness of the conduct' and will depend on the particular facts of each case."95 To the extent that at least two of the law firms representing the Plaintiffs in these cases failed to timely file their disclosures, their conduct was not egregious and does not warrant the denial of their fees. Consequently, the attorneys' fees that are awarded to the Plaintiffs in these cases constitute fees actually incurred by the Plaintiffs and are a component of actual damages recoverable under § 362(k)(1). See Warren v. Dill (In re Warren), 532 B.R. 655, 664 (Bankr. D.S.C. 2015).

The Court must now consider the amount of attorneys' fees to be awarded in each of these adversary proceedings. Attorneys' fees are recoverable under § 362(k)(1) only to the extent that they are reasonable and necessary. Skillforce, Inc. v. Hafer, 509 B.R. at 534 (citing Seaton, 462 B.R. at 605).96 What constitutes "reasonable" attorneys' fees in the context of a fee-shifting statue such as § 362(k)(1) was recently and thoroughly analyzed by the Judge Davis of the Eastern District of Virginia in Denton v. PennyMac Loan Services, LLC, Civil Action No. 4:16cv32, 2017 WL 2113138 (E.D. Va. May 15, 2017).97 He instructed that the calculation of a reasonable attorney's fee should begin with employing "the lodestar method by multiplying the number of reasonable hours expended times a reasonable rate." Id. at *3, quoting McAfee v. Boczar, 738 F.3d at 88 (citation omitted).98 The lodestar figure should then be evaluated under the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).99 To the extent that these factors have already been included in the lodestar analysis, the lodestar figure is not adjusted by applying these factors again. 2017 WL 2113138, at *4 (citing McAfee v. Boczar, 738 F.3d at 91). The next step involves excluding fees related to unsuccessful claims that have no relationship to successful claims. Id. (citing Robinson v. Equifax Info. Servs., 560 F.3d 235, 243 (4th Cir. 2009)). The final step requires the court to consider reducing the award if the relief obtained is limited compared to the overall scope of the litigation. Id. (citing McAfee v. Boczar, 738 F.3d at 92).100

According to the Plaintiffs, the combined lodestar for the three adversary proceedings is $211,406.79.101 The Plaintiffs are seeking an enhanced combined amount of $317,110.19 in attorneys' fees, which reflects a multiplier of 1.5 on the combined lodestar amounts.

In each case, NetCredit has objected to the fees requested by the Plaintiffs (the "Fee Objection"),102 contending that "the appropriate fee amount is reduced to $139,419.82" when the lodestar analysis is calculated in accordance with Fourth Circuit precedent. Accompanying its Fee Objection is a detailed analysis of the time entries submitted by Plaintiffs' counsel in which NetCredit designates numerous charges as unnecessary, duplicative, inaccurate, or unrelated to the Plaintiffs and issues involved in these adversary proceedings.103 NetCredit objects to an enhancement of the lodestar, claiming that it is neither justified by the circumstances nor authorized by law. NetCredit further argues that the award of attorneys' fees should be reduced because the amounts claimed are disproportionate to the damages incurred by the Plaintiffs.

Although NetCredit does not appear to object to a combined award of attorneys' fees and costs pursuant to a consolidated application, it is undisputed that these three adversary proceedings were neither substantively nor procedurally consolidated, the parties having agreed that the matters should be tried consecutively but separately.104 It is also a matter of record that at approximately the same time that these cases were filed, the attorneys representing these Plaintiffs filed nearly identical causes of action in this Court against NetCredit on behalf of two similarly situated clients.105 These two cases, along with a third case (collectively, the "Settled Cases") filed by the attorneys representing the Plaintiffs, were scheduled to be tried on the same dates that the Plaintiffs' cases were tried but were settled prior to trial.106 Despite the fact that none of these six cases were substantively or procedurally consolidated, counsel for the Plaintiffs, by their own admission, failed to separately maintain contemporaneous time and billing records for each case, instead electing to combine their timekeeping records. Although NetCredit does not object to a consolidated application, it contends that some of the fees included in the Application are attributable to services rendered to other clients including those involved in the Settled Cases.

Although an analysis of the Johnson factors would ordinarily be the next step in calculating a reasonable fee award, an in-depth analysis such as that conducted by the court in Denton is not necessary in this case. The Court has reviewed the pleadings, exhibits, and declarations filed in connection with the claims for attorneys' fees and finds little attention given by any party to many of the twelve factors, save for the hourly rates, the experience of the attorneys involved, and efforts to justify or dispute the need for the amount of time and attention expended. For the most part, there is no dispute over the hourly rates of the attorneys.107

NetCredit's objection to the requested fee enhancement is well founded. The Plaintiffs have cited no case where reasonable attorneys' fees were awarded as damages pursuant to § 362(k)(1) were increased by the use of a multiplier. The Plaintiffs' reliance on the Fourth Circuit's decision in Berry v. Schulman, 807 F.3d 600 (4th Cir. 2015), cert. denied, 137 S.Ct. 77 (2016), is misplaced. Berry involved a large class action settlement under the Fair Credit Reporting Act that involved years of litigation and a negotiated settlement that provided for a fee enhancement. Id. at 617.108

Even if the Court does have the discretion to award an enhancement such as that being sought by the Plaintiffs, it would not elect to do so in these cases. Although the Plaintiffs have called attention to NetCredit's improper business practices, there is no evidence that extraordinary results were obtained as a result of these cases. In Berry, the "sea change" in the defendant's business practices referenced by the court was supported by expert testimony. Id. at 618. In contrast, the "sea change' in NetCredit's business practices the Plaintiffs claim to have produced is limited to quality assurance measures that the Court has found to be of dubious benefit. The Plaintiffs' contention that there is "even more change . . . on the horizon" is speculative.109 There is no basis, either factual or legal, to award a fee enhancement.110

The Court also finds merit in other objections to the Application raised by NetCredit, particularly those occasioned by the failure of Plaintiff's counsel to maintain contemporaneous time records in each case. It bears stating again that these cases were not consolidated for purposes of trial or otherwise.111 During the course of their representation of the Plaintiffs, these attorneys were representing other clients and comingling time entries for those clients' with time entries attributable to the Plaintiffs. Numerous time entries refer to "cases" without sufficient information to determine whether the matter involves one or more of the Plaintiffs, one or more of the Settled Cases, or otherwise. The explanations given by the attorneys concerning their method of allocating their time and billing among their clients vary; however, it is apparent that these allocations were made in hindsight and it is clear that anyone reviewing them, including their clients, would have no way of verifying their accuracy or reasonableness.

In Denton v. PennyMac Loan Services, the district court commented on the inability of a court to evaluate the reasonableness of an attorneys' work when counsel has submitted insufficient documentation. "It is the obligation of counsel to `maintain billing time records in a manner that will enable a reviewing court to identify distinct claims.'" 2017 WL 2113138, at *13, quoting Hensley v. Eckerhard, 461 U.S. 424, 437 (1983).

This Court has made clear what it expects in connection with applications seeking supplemental compensation112 in chapter 13 cases. See In re Vernon-Williams, 343 B.R. 766 (Bankr. E.D. Va. 2006), aff'd in part and rev'd in part sub nom. Boleman Law Firm, P.C. v. U.S. Trustee, 355 B.R. 548 (E.D. Va. 2006); In re Hackney, 347 B.R. 432, 442 (Bankr. M.D. Fla. 2006) (subsequently amended in non-relevant part at No. 6:03-bk-02488-ABB, 2006 WL 3804678 (Bankr. M.D. Fla. Sept. 26, 2006)). "[I]t is not overly burdensome to expect [a law firm] to keep contemporaneous and accurate time records for each individual case in which the firm seeks supplemental compensation; certainly, it is more practical to expect the applicant than the Court to justify fee Awards." In re Vernon-Williams, 343 B.R. at 797-98. We have also indicated our disapproval of the practice of "averaging out" client expenses because to do so "is unfair to the individual debtors and creditors, whose interests are case-specific." Id. at 806 (citing In re Williams, 102 B.R. 197, 199 (Bankr. N.D. Cal. 1989)) (holding with respect to a compensation request by a trustee that "[a]s a matter of law, the Court finds that an expense is not `actual,' and therefore not reimbursable under section 330(a)(2), to the extent that it is based on any sort of guesswork, formula, or pro rata allocation."). The "averaging out" of fees attributable to more than one client is equally problematic.113

The lack of case-specific contemporaneous records is not the Court's only concern. Another is that not all of the services for which counsel is seeking compensation are directly related to stay violations. Each of the Plaintiffs' schedules listed a cause of action against NetCredit "arising" in connection with origination of the loans. Time spent negotiating a recovery for claims that existed before their bankruptcy filings, even if NetCredit conditioned their resolution upon a potential settlement of the automatic stay violations, would not normally be recoverable as damages under § 362(k)(1).

The Applications also include charges for services rendered in connection with motions to compel discovery brought by the Plaintiffs in each case. These motions sought the production of discovery related to the circumstances involved in making the loans rather than the stay violations. The motions were denied.114 To the extent that fees related to these services were "spent on unsuccessful claims unrelated to successful ones" those amounts should be subtracted. Denton v. PennyMac Loan Services, 2017 WL 2113138, at *3, quoting McAfee v. Boczar 738 F.3d at 88.115

The Court also questions why it was necessary for the Plaintiffs to employ three separate law firms to pursue what would appear to be relatively straightforward complaints to recover damages for these automatic stay violations. There is no indication that novel and difficult questions of law have been implicated. See Denton v. PennyMac Loan Services, 2017 WL 2113138, at *9. The employment of three separate law firms in each of the adversary proceedings raises concerns of over-lawyering. A significant amount of travel time (two of the law firms' offices are located outside of Richmond) was included in the Application. A substantial and questionable amount of time was spent on attorney conferences and communications. Multiple attorneys attended trial on behalf of the Plaintiffs.116 The explanations given by counsel regarding the individual roles of each attorney, the steps taken to avoid duplication, and the representations that on occasion attorneys did not charge for their time do not adequately alleviate these concerns.

The Court in Seaton, when limiting its fee award, emphasized that the fees being sought were excessive in comparison to the Plaintiffs' damages. "The proportionality of the attorney's fees sought to the damages incurred by a debtor is a significant factor in determining reasonableness." 462 B.R. at 605. Concerns about proportionality are also reflected in the Johnson factor relating to the amount in controversy compared to the results obtained.

In each of these cases, NetCredit conceded that it violated the automatic stay, leaving the issues at trial confined primarily to the amount of damages to be awarded. The compensatory damages were relatively modest. Yet, the Plaintiffs incurred combined attorneys' fees in excess of $200,000, an amount that, even without a punitive damages award, would be strikingly disproportionate to the results obtained. The Court is aware that attorneys' fees will not always be directly proportionate to the amount of damages recovered and is mindful of the need to encourage the "vigorous enforcement" of statutes protecting individuals from offending creditors.117 The Court also recognizes that the punitive damage awards in these cases temper the disproportionality. On balance, however, the fees incurred in comparison to the amounts in controversy seem disproportionate and would warrant a downward adjustment.118

The Court finds that acceptance of NetCredit's $139,419.82 "Proposed Lodestar Calculation"119 sufficiently alleviates these concerns. No further adjustment will be imposed to the fees requested in the Application. In these cases, it would be inappropriate to award attorneys' fees in an amount less than what NetCredit has conceded in the Fee Objection to be the "appropriate" fee amount.120 Thus, having carefully reviewed the Application, along with the accompanying declarations and exhibits, the Fee Objection and applicable law, the Court will award attorneys' fees in the combined amount of $139,419.82, supplemented and apportioned as follows.

As previously noted, the Fee Objection does not account for the additional attorneys' fees included in the Supplemental Application and the Supplemental Briefs. Therefore, the fee awards will be increased to the extent the supplemental amounts requested are reasonable.

The Supplemental Application seeks additional attorneys' fees in the combined amount of $19,347.00. The Supplemental Briefs, for the first time, attribute separate "lodestar" amounts to each individual case.121 Unfortunately, even though Plaintiffs seek separate fees, the supporting declarations and time submissions reflect a continued stubborn unwillingness by counsel to attribute time entries to individual cases. The explanations for how counsel arrived at the final apportionment are as problematic as the explanations given in the Application addressing the apportionment between these cases and the Settled Cases.

It is unclear to what extent Plaintiffs, in the Supplemental Application and Supplemental Briefs, seek an increase of fees over the fees previously sought in the Application, since the amounts of the increases are not specifically set forth. However, by combining the amounts requested in the Supplemental Briefs and subtracting from that total from the amount sought in the Application,122 the Court calculates a combined supplemental request in the amount of $42,080.50.123

Having reviewed the Supplemental Application, the Supplemental Briefs, and the objections filed by NetCredit, and applying the same rationale as previously employed in accepting NetCredit's proposed fee reduction, the Court will award supplemental combined fees in the amount of $38,752.00.124 This amount reflects NetCredit's proposed reduction of $3,328.50 to the supplemental fee request.

The combined total attorneys' fees award is thus $178,171.22, which represents $139,419.82 awarded pursuant to the Application and a $38,752.00 supplemental award. NetCredit's objections, to the extent not already sustained in arriving at this amount, will be overruled.

The Court is aware of no logical means to apportion the attorneys' fees award to the individual cases other than to prorate this amount on the basis of the amounts being sought by counsel in the individual cases. Accordingly, attorneys' fees in the amount of $60,195.05 will be awarded in Adv. Pro. No. 16-03121-KLP (Charity), $59,426.43 will be awarded in Adv. Pro. No. 16-03122-KLP (Edmonds) and $58,550.34 will be awarded in Adv. Pro. No. 16-03150-KLP (Lane).125 Attorneys' fees shall not be payable by the Plaintiffs to counsel until those fees are received from NetCredit.

NetCredit asserts that the Plaintiffs should be denied their claim for reimbursement of costs and expenses in the amount of $2,691.05 because there are no itemized statements or invoices accompanying the claim. Adequate documentation is required before litigation costs may be awarded. Trimper v. City of Norfolk, 58 F.3d 68, 77 (4th Cir. 1995) ("an unverified `Chart of Expenses,' with no receipts or bills attached" was insufficient documentation to award costs); Fernandes v. Montgomery Cty., No. SAG-10-752, 2013 WL 6330705, at *7 (D. Md. Dec. 3, 2013) (merely listing litigation expenses "[w]ith no supporting documentation, such as vouchers, or receipts," is insufficient to enable court to verify that the amounts are accurate and reasonable). The Plaintiffs have provided only a combined listing of costs and expenses with no supporting documentation. Therefore, they cannot be allowed.

Conclusion

Mekeanna Lane (Adv. Pro. No. 16-03150-KLP)

Mekeanna Lane is awarded actual, compensatory damages in the amount of $202.44. Ms. Lane is also awarded punitive damages in the amount of $100,000.00. Of the $100,000.00 she is to receive, she is enjoined to deliver $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia (minus all taxes, if any, Ms. Lane must pay on account of those sums). There shall be a remittitur of the punitive damages to $15,000.00 to be fully retained by Ms. Lane if, and only if, NetCredit contributes $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia on account of Ms. Lane. Ms. Lane is also awarded $58,550.34 in attorneys' fees.

James and Regina Charity (Adv. Pro. No. 16-03121-KLP)

Regina Charity is awarded actual, compensatory damages in the amount of $1,155.63. Mrs. Charity is also awarded punitive damages in the amount of $100,000.00. Of the $100,000.00 she is to receive, she is enjoined to deliver to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia (minus all taxes, if any, Mrs. Charity must pay on account of those sums). There shall be a remittitur of the punitive damages to $15,000.00 to be fully retained by Mrs. Charity if, and only if, NetCredit contributes $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation on account of Mrs. Charity. Mrs. Charity is also awarded $60,195.05 in attorneys' fees.

James Charity is not entitled to recover damages associated with NetCredit's violation of the automatic stay. He shall not, however, be liable for attorneys' fees in connection with this adversary proceeding.

Collin and Bobbie Lane Edmonds (Adv. Pro. No. 16-03122-KLP)

Bobbie Lane Edmonds is awarded actual, compensatory damages in the amount of $415.25. Mrs. Edmonds is also awarded punitive damages in the amount of $100,000.00. Of the $100,000.00 she is to receive, she is enjoined to deliver $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia (minus all taxes, if any, Ms. Edmonds must pay on account of those sums). There shall be a remittitur of the punitive damages to $15,000.00 to be fully retained by Mrs. Edmonds if, and only if, NetCredit contributes $37,500.00 to the National Consumer Law Center and $37,500.00 to the Legal Services Corporation of Virginia on account of Mrs. Edmonds. Mrs. Edmonds is also awarded $59,426.43 in attorneys' fees.

Collin Edmonds is not entitled to recover damages associated with NetCredit's violation of the automatic stay. He shall not, however, be liable for attorneys' fees in connection with this adversary proceeding.

Separate orders will be entered.