Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-canb-5_14-ap-05022/USCOURTS-canb-5_14-ap-05022-0/pdf.json

Parties Involved:
Eloy Cardenas
Plaintiff
Matilde Cardenas
Plaintiff
Luna Auto Sales
Defendant
Aurelio Luna
Defendant

Document Text:

UNITED STATES BANKRUPTCY COURT

 For The Northern District Of California

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UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

In re ] Case No. 11-58313-ASW

]

ELOY CARDENAS and ] Chapter 13

MATILDE CARDENAS, ]

]

Debtors. ]

]

]

ELOY CARDENAS and ] Adv. Proc. No. 14-05022-ASW

MATILDE CARDENAS, ]

]

Plaintiffs, ]

]

v. ]

]

LUNA AUTO SALES and ] 

AURELIO LUNA, ]

] 

Defendants. ]

___________________________________]

MEMORANDUM DECISION RE: PLAINTIFFS’ MOTION FOR CONTEMPT

Before the Court is the motion of Plaintiffs Eloy Cardenas and

Matilde Cardenas, who are represented by attorney Ray Hacke, for an

order of contempt and for an award of compensatory and punitive

damages and other relief. Defendants are pro se, and have not

filed an opposition to this motion.

On March 28, 2014, this Court entered an order (the “March 28

Order”) granting Plaintiffs’ motion for an injunction requiring

IT IS SO ORDERED.

Signed May 6, 2014

Arthur S. Weissbrodt

U.S. Bankruptcy Judge

________________________________________

Entered on Docket 

May 06, 2014

EDWARD J. EMMONS, CLERK 

U.S. BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA

Case: 14-05022 Doc# 18 Filed: 05/06/14 Entered: 05/06/14 09:30:10 Page 1 of 8
UNITED STATES BANKRUPTCY COURT

 For The Northern District Of California

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Defendants Luna Auto Sales (“LAS”) and its owner, Aurelio Luna, to

return the Debtors’ 1999 Isuzu pickup truck (the “truck”). At the

hearing on March 18, 2014, the Court found that Defendants’

retention of the truck after February 13, 2014 was a violation of

the automatic stay and that Plaintiffs are entitled to damages

according to proof. 

According to the declaration of Plaintiff Eloy Cardenas, on

April 1, 2014, Mr. Cardenas, who was accompanied by an officer from

the San Jose Police Department, went to Defendants’ premises to

serve a copy of the March 28 Order and demand the return of the

truck. However, Mr. Luna refused to comply with the order and has

not returned the truck.

Based on the foregoing, the Court finds Defendants in contempt

for failure to comply with the March 28 Order. See Barrientos v.

Wells Fargo Bank, N.A., 633 F.3d 1186, 1190 (9th Cir. 2011) (remedy

for violating an injunction is an order of contempt).

With respect to damages, § 362(k) provides 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.” 

A willful stay violation occurs when (1) the creditor know of the

automatic stay; and (2) the actions that violate the stay are

intentional. Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1215

(9th Cir. 2002). As noted, the Court has previously found that

Plaintiffs are entitled to their actual damages incurred from

February 13, 2014. Plaintiffs request compensatory damages of

$20,564.54, comprised of the following:

Personal items left in truck $ 920.00

Truck rental (U-Haul) $ 170.00

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UNITED STATES BANKRUPTCY COURT

 For The Northern District Of California

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Truck rental (Cargo van) $ 900.00

Purchase of 1994 Isuzu truck $ 1,074.00

Repairs to Isuzu $ 1,940.54

Extra time required to complete

deliveries $ 2,560.00

Attorney’s fees $13,000.00

TOTAL $20,564.54

Although the Court finds that an award of damages is

appropriate, the request appears to be premature. Additionally,

there are some problems with the evidence in support of some of the

amounts requested.

First, the $920 requested for the personal items assumes Mr.

Cardenas will not recover those items. However, Plaintiffs have

requested that the Court issue a writ authorizing a law enforcement

agency to seize the truck and return it to Plaintiffs. If

Plaintiffs get their property back, they would not be entitled to

compensation for the loss of those items.

Second, although Mr. Cardenas has submitted a declaration that

he spent $1,070 on truck rental, Mr. Cardenas also indicates he has

no receipts for these expenditures. The Court is reluctant to award

damages for these expenses without those receipts, which Plaintiffs

could probably obtain from the truck rental companies. Mr.

Cardenas should provide evidence that he tried to obtain such

evidence, but cannot and as to why he cannot obtain proof from the

truck rental companies. 

Third, the calculation of the extra time required to complete

deliveries is unclear. Mr. Cardenas states that it takes him up to

ten hours per day to make deliveries with the new truck because the

new truck has a smaller capacity than the old truck. Mr. Cardenas

states that this works out to roughly $24 per hour, approximately

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UNITED STATES BANKRUPTCY COURT

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$16 per hour less than he earned with the truck. Mr. Cardenas goes

on to state, and I quote “since we are now in the 16th week of

April, and I work approximately five days per week, and I now need

approximately four additional hours per day to complete my

deliveries, I am seeking $2,560 for the extra time that I have

required to complete my deliveries. That amount represents $40 per

hour, multiplied by four hours per day, multiplied by five days per

week.” Forty dollars times four times five works out to $800 per

week. Presumably the $2,560 is intended to correspond to the time

that Mr. Cardenas’ income has been reduced, but the calculation is

too vague to be understood. Plaintiffs need to provide a clear

calculation of the $2,560 requested.

Finally, Mr. Hacke has not provided any billing statements to

support his request for attorney’s fees. Additionally, the request

appears premature because further fees may be incurred in enforcing

the Court’s orders.

Accordingly, the Court will defer ruling on compensatory

damages until such time as this matter is finalized and sufficient

evidence is presented.

Plaintiffs also request punitive damages, which are authorized

under § 362(k) “in appropriate circumstances.” The Court will not

award such damages at this time due to the fact that the issue of

compensatory damages is being deferred. The Court notes that the

standard for imposition of punitive damages for violation of the

automatic stay is whether the violator engaged in “egregious,

intentional misconduct.” In re McHenry, 179 B.R. 165, 168 (9th

Cir. BAP 1995). The Ninth Circuit Court of Appeals has observed

that it has “traditionally been reluctant to grant punitive damages

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absent some showing of reckless or callous disregard for the law or

rights of others.” In re Bloom, 875 F.2d 224, 228 (9th Cir. 1989). 

Punitive damages are aimed deterrence and retribution. State Farm

Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003). 

Plaintiffs argue that punitive damages are warranted here

because Defendants have refused to turn over the truck despite

having knowledge of the bankruptcy, and of this Court’s order

requiring turnover. In re Knaus, 889 F.2d 773, 775 (8th Cir. 1989). 

Plaintiffs request that the Court award nine times the compensatory

damages requested, or $185,080.86. Plaintiffs cite Dukes v. WalMart, Inc., 509 F.3d 1168, 1197-98 n.22 (9th Cir. 2007) for the

proposition that punitive damages may be awarded at a 9-to-1 ratio

to compensatory damages

In reversing an award of 145-1 punitive damages in State Farm

Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), the Supreme

Court noted that although there is no specific formula for awarding

punitive damages, the Court has previously concluded that an award

of more than four times the amount of compensatory damages might be

close to the line of constitutional impropriety. 538 U.S. at 425

(citing Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23–24

(1991), and BMW of North America, Inc. v. Gore, 517 U.S. 559, 581

(1996)). While acknowledging that greater awards “may comport with

due process where a particularly egregious act has resulted in only

a small amount of economic damages,” the Supreme Court also stated

that “courts must ensure that the measure of punishment is both

reasonable and proportionate to the amount of harm to the plaintiff

and to the general damages recovered.” State Farm, 538 U.S. at

426.

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Here, although the Court finds that punitive damages are

appropriate for Defendants’ refusal to turn over the truck in the

face of a Court order, the Court is not inclined to award nine

times the amount of compensatory damages. In any event, the Court

will not rule on punitive damages until the amount of compensatory

damages has been determined.

Turning to the additional relief requested by Plaintiffs, the

request for a refund of funds paid for the truck and an order

cancelling the outstanding debt and declaring lien void is

premature for the reasons set forth above. The Court notes that,

if the truck is returned, it can see no reason why the outstanding

debt should be cancelled or the lien declared void. 

Regarding the issuance of a writ of execution, this Court has

authority to enforce judgments for possession of property through

writs and other orders under § 105(a). See In re Kerlo, 311 B.R.

256 (Bankr. C.D. Cal. 2004) (chapter 7 trustee entitled to writ of

execution to enforce turnover order). The Court will issue a writ

of execution pursuant to Fed. R. Civ. P. 70 (applicable via Fed. R.

Bankr. P. 7070).

The motion is granted in part. The issues of damages,

including the request for punitive damages, and the additional

relief requested are continued to July 1, 2014 at 2:30 p.m. 

Plaintiffs shall file with the Court a status conference statement,

as well as the additional evidence requested, not later than one

week prior to the continued hearing. Counsel for Plaintiffs shall

submit a proposed form of order, and a proposed writ of execution.

///

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 For The Northern District Of California

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Again, Defendants are strongly advised to seek the advice of

counsel.

***END OF MEMORANDUM DECISION***

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Court Service List

Luna Auto Sales

2070 Alum Rock Avenue

San Jose, CA 95116

Aurelio Luna

2070 Alum Rock Avenue

San Jose, CA 95116

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