IN RE: Lavosha Sherrill Jones (2025)

Chapter 7

ORDER ON TRIAL TO DETERMINE DAMAGES

THIS PROCEEDING came on for trial on September 10, 2025, on the Complaint filed by the Debtor (Doc. No. 1). The trial followed the Court's Order Granting in Part and Denying in Part Plaintiff's Motion for Summary Judgment against Sir Finance Corporation (Doc. No. 64). The Court granted summary judgment to the Plaintiff on liability, finding that the Defendant, Sir Finance Corporation, violated the discharge injunction by initiating and perpetuating a garnishment action post-discharge. And it granted summary judgment to the Plaintiff on her request for attorney's fees and costs in the amount of $18,962 in fees and $397.48 in costs. The Court also granted summary judgment on entitlement to punitive damages. However, the Court denied summary judgment on the Plaintiff's request for other actual damages and set trial to determine additional actual damages, if any. The Court also reserved jurisdiction to quantify punitive damages based upon the determination of actual damages.

Under 11 U.S.C. § 524, a discharge operates as an injunction against the continuation of any action to collect a discharged debt of a debtor. The discharge injunction requires creditors to cease any garnishment action that would violate the discharge order.¹ The burden is on the creditor to take affirmative action to undo such action.² Failure to take required action can be considered a willful violation of the automatic stay or discharge injunction, ultimately warranting sanctions.³ Here, the Court determined at the summary judgment phase that the repeated notice of the bankruptcy provided to the Defendant clearly warned of the risk of continuing the garnishment action. A reasonable creditor in such circumstances would have, therefore, rescinded the wage deduction summons that caused the Plaintiff's employer to withhold the Plaintiff's wages and deliver them to the Defendant.

As the Eleventh Circuit explained in In re McLean, “[b]ankruptcy courts may impose compensatory sanctions for actual damages that a debtor incurs as a result of a creditor's violation of the discharge injunction” under 11 U.S.C. § 105(a).⁴ Having considered the evidence at trial, the Court finds the Plaintiff suffered actual damages in addition to the previously awarded attorney's fees and costs.

A short recap shows the basis for the Court's finding: In November 2022, the Plaintiff received a discharge in her bankruptcy case. During this time frame, she had resided in the same apartment complex for approximately three years. In January 2023, she signed a one-year lease renewal that would expire in February 2024. At around the same time, the Defendant sent the Plaintiff's employer a wage deduction summons, and the employer began to withhold a portion of each of the Plaintiff's bi-weekly paychecks. In March 2023, the Plaintiff was unable to pay her rent under the new lease and accumulated various late fees, which ultimately led to her eviction. To be approved for another apartment, the Plaintiff had to pay $3,000.00 to cover the cost of an accommodation cosigner. The monthly rate of the Plaintiff's prior lease was $1,500.00, and the rate for her new lease was substantially more expensive at $2,400.00 a month.

The Plaintiff's actual damages include the lease rent differential over the seven months from August 2023 through February 2024 when her prior lease term ended, during which the Plaintiff paid an additional $900.00 a month for her new lease after breaching the prior lease when she was unable to pay rent due to the garnishment. The Plaintiff would not have been forced to incur this additional monthly expense if her wages were not withheld and thus had the funds to pay her prior landlord through the full lease term. Further, $3,000.00 paid by the Plaintiff to cover the cost of an accommodation cosigner on her new lease are also actual damages incurred due to the wage garnishment. The Court finds that the appropriate award for additional actual damages is, therefore, $900.00 for each month beginning August 2023 through February 2024, and $3,000.00 for the cost of the accommodation cosigner. Accordingly, the Court awards $9,300.00 in actual damages in addition to the attorney's fees and costs already awarded. The Plaintiff may seek a supplemental award for additional fees incurred through trial.

Under § 105(a) of the United States Bankruptcy Code, this Court has the authority to enforce a discharge order by issuance of contempt orders and imposition of sanctions, including punitive damages.⁵ “As a general matter, punitive damages serve both as punishment for wrongful conduct and as a deterrent of future wrongful conduct.”⁶ The Court awards $8,000.00 in punitive damages as an appropriate punishment of and deterrent for the Defendant. This amount aligns with the guideposts established by the United States Supreme Court for punitive damages awards,⁷ and it is commensurate with awards in other cases dealing with violations of the automatic stay or discharge injunction.⁸

Accordingly, it is

ORDERED:

1. The Debtor is awarded $9,300.00 in actual damages.

2. The Debtor is awarded $8,000.00 in punitive damages.

3. Attorney Alan Borden may file a supplemental fee application (including narrative time entries) on negative notice within 14 days.

4. The Court will enter a separate final judgment that includes a supplemental fee award.

The Clerk's office is directed to serve a copy of this order on any interested parties who do not receive service via CM/ECF.

FOOTNOTES

1.   Poole v. U.B. Vehicle Leasing, Inc. (In re Poole), 242 B.R. 104 (Bankr. N.D. Ga. 1999).

2.   See Jove Engineering, Inc. v. Internal Revenue Service (In re Jove Engineering, Inc.), 92 F.3d 1539, 1557 (11th Cir. 1996); In re Poole, 242 B.R. at 111.

3.   Thigpen v. GMAC Mortgage LLC (In re Thigpen), No. 3:07-BK-05626-JAF, 2009 WL 10742947, *5 (Bankr. M.D. Fla. Mar. 30, 2009); In re Briskey, 258 B.R. 473, 477 (Bankr. M.D. Ala. 2001); In re Poole, 242 B.R. at 110-13.

4.   Green Point Credit, LLC v. McLean (In re McLean), 794 F.3d 1313, 1325 (11th Cir. 2015).

5.   In re Wallace, No. 09-BK-594-PMG, 2011 WL 1335822, *7 (Bankr. M.D. Fla. Apr. 5, 2011).

6.   In re White, 410 B.R. 322, 327(Bankr. M.D. Fla. 2009).

7.   The United States Supreme Court has considered the following factors when reviewing an award of punitive damages: (1) the degree of reprehensibility of the violator's conduct; (2) the disparity between the harm or potential harm suffered by the debtor and the punitive damages awarded; and (3) the difference between the award granted and the civil penalties imposed in similar cases. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575–585, 116 S. Ct. 1589, 134 L. Ed.2d 809 (1996).

8.   See Nibbelink v. Wells Fargo Bank (In re Nibbelink), 403 B.R. 113, 122 (Bankr. M.D. Fla. 2009) (awarding $15,000 in punitive damages for violation of the discharge injunction); In re White, 410 B.R. at 328 (awarding $10,000 in punitive damages and explaining that such an award is in line with Supreme Court guidelines on punitive damages as the ratio between the award of punitive and actual damages is only 2:1).

Catherine Peek McEwen United States Bankruptcy Judge