2015 BNH 003 Note: This is an unreported opinion. Refer to LBR 1050-1 regarding citation. ____________________________________________________________________________________

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW HAMPSHIRE

In re: Bk. No. 08-13522-JMD

Chapter 7

Timothy J. Bates and

Cathy N. Bates,

Debtors

Timothy J. Bates and

Cathy N. Bates,

Plaintiffs,

v. Adv. No. 13-1043-JMD

CitiMortgage, Inc. s/b/m to

ABN AMRO Mortgage Group, Inc., and 

Federal Home Loan Mortgage Corp.,

Defendants

Terrie Harman, Esq. 

Kristina Cerniauskaite, Esq.

Harman Law Offices

Portsmouth, New Hampshire

Attorneys for Debtors/Plaintiffs

Gregory N. Blase, Esq.

David D. Christensen, Esq.

K&L Gates LLP

Boston, Massachusetts

Attorneys for Defendant CitiMortgage, Inc. s/b/m to

ABN AMRO Mortgage Group, Inc.

MEMORANDUM OPINION

I. INTRODUCTION

Timothy J. and Cathy N. Bates (the “Plaintiffs” or “Debtors”) filed a complaint (Doc. No.

12) (the “Complaint”) against CitiMortgage, Inc. s/b/m to ABN AMRO Mortgage Group, Inc.

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(“Citi”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively the

“Defendants”) contending they violated the discharge injunction of 11 U.S.C. § 524(a). The

Plaintiffs seek to hold the Defendants in contempt pursuant to 11 U.S.C. § 105(a) and collect

damages. The Court previously granted summary judgment in favor of the Defendants with

respect to Counts I through V and in favor of the Plaintiffs as to liability with respect to Count

VI (Doc. No. 73). The Court held a trial on February 18, 2015, on the issue of damages. The

Court took the matter under advisement (Doc. No. 110) and gave the parties time to file written

closing arguments, which they did (Doc. Nos. 118, 119, and 120).

 This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§

1334 and 157(a) and Local Rule 77.4(a) of the United States District Court for the District of

New Hampshire. This is a core proceeding in accordance with 28 U.S.C. § 157(b).

II. FACTS

The Plaintiffs filed a chapter 7 bankruptcy petition on November 26, 2008 (Doc. No. 1). 

At the time the Debtors filed bankruptcy, they resided at 94 Bascom Road in Newport, New

Hampshire. The Debtors’ residence served as security for a loan held by Citi. The Debtors did

not reaffirm their mortgage debt with Citi while in bankruptcy. On February 3, 2009, Citi was

granted relief from the automatic stay (Doc. No. 14). On April 2, 2009, the Debtors received a

discharge (Doc. No. 19) (the “Discharge Order”). Notice of the Discharge Order was sent to Citi

on April 4, 2009 (Doc. No. 20). On May 13, 2009, the Debtors’ case was closed (Doc. No. 21).

After the Debtors’ bankruptcy case was closed, the Debtors received a notice of

foreclosure. Subsequently, the Debtors executed a loan modification with Citi. The loan

modification contained a separate rider that specifically provided that the loan modification

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agreement did not affect the bankruptcy discharge of the Debtors’ personal liability on the debt

to Citi. The Debtors made payments pursuant to the terms of the loan modification agreement

until sometime in 2010. After payments stopped, Citi recommenced foreclosure proceedings

and, on April 25, 2011, the Debtors’ home was foreclosed. The Debtors moved out of their

residence sometime in October of 2011. In January of 2012, the Debtors each received an IRS

Form 1099-A from Freddie Mac; the form indicated that certain information relating to Citi’s

foreclosure and acquisition of the Debtors’ property would be reported to the Internal Revenue

Service.

On May 14, 2013, the Debtors filed a motion seeking to reopen their bankruptcy case so

they could file a complaint seeking damages for the Defendants’ alleged violations of the

Discharge Order in connection with their activities related to Citi’s mortgage and Freddie Mac’s

issuance of the Form 1099-A (Doc. No. 24). The Debtors filed their complaint on May 15, 2013.

 Shortly thereafter, during the evening of June 11, 2013, Mr. Bates answered the

telephone at their new home (which had the same phone number as the one when they resided at

94 Bascom Road) and heard an automated message from Citi stating:

According to our records we have been unable to obtain current insurance

information. This information is required based on the terms of your mortgage

agreement. Please provide your insurance carrier and policy information to us.

Mr. Bates testified that he listened to the recorded message multiple times. When he hung up, he

relayed the substance of the message to his wife. 

Contrary to the impression left by the summary judgment record, Mr. Bates

acknowledged at trial that there was no back and forth discussion with any Citi representative

during the course of the phone call. Citi did not demand that the Debtors go out and buy

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insurance if they did not already have it; however, Mr. Bates interpreted the phone call to mean

that the Debtors were required to show that they had insurance on their former home. 

Both Debtors testified that the automated phone call from Citi upset them. They did not

understand why Citi would be contacting them, more than two years after their home had been

foreclosed. The phone call dredged up old feelings that they had experienced when their home

was foreclosed and after they had received the Form 1099-A. The Debtors felted harassed and

bullied. Mr. Bates testified that he felt the phone call was made in retaliation for the Debtors not

being able to pay off their mortgage. Both Debtors testified that they believed Citi was going to

continue coming after them. It seemed that they would never be able to move on. 

The Debtors described feeling generally stressed after the phone call. The couple

resumed drinking and arguing again. Mrs. Bates got angry, would shake, and experienced

episodes of diarrhea. Despite such issues, she did not see a doctor after the phone call and

testified inconsistently upon cross-examination that she did not have any health problems after

the phone call. After being contacted by Citi in June of 2013, Mrs. Bates again asked for a

divorce as “it would be easier just to walk away from everything.” Mr. Bates testified that he

was concerned that his heart issues were returning but his doctor confirmed that he was okay. 

Mr. Bates indicated his pride was hurt, he felt depressed, and he did not socialize as much. 

After the phone call Mr. Bates and the couple’s son returned to therapy, which they had

begun around the time their home had been foreclosed in 2011, as the couple’s stress caused

problems with their son. Mrs. Bates testified that she did not return to therapy. Mr. Bates

testified that they had co-payments for these sessions that their insurance did not cover, but he

did not know how much they totaled. The Plaintiffs presented no corroborating medical

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evidence and no documentary evidence that would show the amount of any medical expenses

they incurred as a result of the June 2013 phone call. 

Before the phone call, back in 2011, the Debtors had hired Attorney Terrie Harman to

represent them in dealing with Citi prior to the Debtors’ vacating their residence. Attorney

Harman continued to represent the Debtors and filed suit against the Defendants on May 15,

2013, for alleged violations of the discharge injunction. Attorney Harman’s firm performed

327.39 hours of services between September 21, 2011, through February 18, 2015, the date of

trial, with fees totaling $72,502.16 and expenses totaling $502.57. 

III. DISCUSSION

The Court previously found that Citi violated the discharge injunction contained in 11

U.S.C. § 524(a)(2) when it contacted the Plaintiffs requesting proof of insurance on the Debtors’

former residence on June 11, 2013, at which time (1) the Debtors’ personal liability associated

with their home had been discharged, the Discharge Order having entered on April 2, 2009, and

(2) the in rem liability associated with the Debtors’ mortgage had been extinguished, the

property having been foreclosed in April of 2011. In the Complaint, the Plaintiffs state that

“CitiMortgage should be held in contempt for violating the discharge injunction and sanctioned

pursuant to 11 U.S.C. § 105(a) by an award of actual damages, including damages for emotional

distress, as well as attorney’s fees and costs in favor of the Plaintiffs.” Complaint ¶ 74.

Section 524 of the Bankruptcy Code does not contain a specific remedies provision. 

United States v. Rivera Torres (In re Rivera Torres), 309 B.R. 643, 647 (B.A.P. 1st Cir. 2004),

rev’d on other grounds, 432 F.3d 20 (1st Cir. 2005). The First Circuit Court of Appeals has

ruled that “a bankruptcy court is authorized to invoke § 105 to enforce the discharge injunction

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imposed by § 524 and order damages . . . if the merits so require.” Bessette v. Avco Fin. Servs.,

Inc., 230 F.3d 439, 445 (1st Cir. 2000); see also Canning v. Beneficial Maine, Inc., 706 F.3d 64,

69 (1st Cir. 2013); Pratt v. Gen. Motors Acceptance Corp. (In re Pratt), 462 F.3d 14, 17 (1st Cir.

2006); Duby v. United States (In re Duby), 451 B.R. 664, 670 (B.A.P. 1st Cir. 2011); Lumb v.

Cimenian (In re Lumb), 401 B.R. 1, 6 (B.A.P. 1st Cir. 2009). The First Circuit has further

explained that bankruptcy courts may use their “statutory contempt power to order monetary

relief, in the form of actual damages, attorney fees, and punitive damages, when creditors have

engaged in conduct that violates § 524.” Bessette, 230 F.3d at 445; see Pratt, 462 F.3d at 20

(concluding that the creditor wilfully violated the discharge injunction and thus the debtors were

entitled to establish and recover their “compensatory damages” together with “other appropriate

relief” under § 105(a)). The First Circuit Bankruptcy Appellate Panel (the “BAP”) has

concluded that bankruptcy judges in the First Circuit are permitted to award damages for

emotional distress attributable to a violation of the discharge injunction. Rivera Torres, 309 B.R.

at 650. “Often . . . a debtor’s out-of-pocket expenses and other economic losses will be

relatively insignificant with respect to a violation of the discharge injunction. In such instances

redress for sustained emotional injury would be a major factor in fashioning an award of full

remedial relief.” Id. at 649. “[M]onetary damages for emotional injury would be appropriate

only if the nature and extent of the injury and its reasonable relationship to the violation of the

discharge injunction are established by competent evidence. . . . Such a showing may or may not

require corroborating medical evidence.” Id. 

In this case, the Court must determine what damages, if any, the Plaintiffs may recover

due to their receipt of a single, prerecorded telephone call from Citi in June of 2013. The

Plaintiffs did not present evidence that would establish any out-of-pocket costs arising directly

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from the phone call and therefore they may not recover the same. Instead, the Plaintiffs seek to

recover damages for emotional distress, the attorney’s fees and costs they incurred in pursuing

their discharge violation claim against Citi, and a monetary sanction.

A. Emotional Distress Damages

At trial, the Plaintiffs testified at length about the emotional distress they suffered around

the time their home was foreclosed in 2011 and before the phone call was received in June of

2013. It is clear that the Debtors were devastated by the foreclosure of their family home, a

house they had lived in for more than twenty years and in which they raised their two sons. 

They were also upset that in 2012 Freddie Mac sent them an IRS form, which they claim stated

they were still liable for the mortgage debt. It was against this backdrop that the Debtors

received the phone call in 2013. 

The evidence is clear that the Debtors were experiencing emotional and family problems

before the June 2013 phone call. Mr. Bates testified that his drinking had picked up prior to the

phone call, Mrs. Bates testified that their family life was always in a constant state of turmoil,

and both parties testified that their son had started to experience problems before the phone call. 

To establish a claim for emotional damages, the Debtors must show that the problems

they experienced after June 2013 were brought about, or made worse, by Mr. Bates’ receipt of

Citi’s automated telephone message. Rivera Torres, 309 B.R. at 649 (explaining that “monetary

damages for emotional injury would be appropriate only if the nature and extent of the injury and

its reasonable relationship to the violation of the discharge injunction are established by

competent evidence”) (emphasis added). 

The emotional distress described by the Debtors in this case mirrors that described in

Rivera Torres:

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Antonio testified that he had made four or five trips from his new home in Florida

to Puerto Rico to try to resolve the problem with the IRS. He also said that he

had experienced an upset stomach, nervousness and stress, and that the situation

had adversely affected his marriage. 

Sofia did not testify at the hearing, but her deposition transcript was admitted into

evidence by agreement of the parties and is included in the record on appeal. It

shows that Sofia had made telephone calls to the IRS each time she and her

husband had received a collection letter. She testified that the threat to garnish

her husband’s wages and the request of the IRS that they describe all of their

belongings had caused her to feel worry and panic. The collection activity also

had caused marital problems and times when the couple had not spoken to each

other for days. Sophia also said that she had suffered anxiety and stress-related

neck pains, muscle spasms, and sleep problems and that she had taken medication

to help her sleep. There is no evidence that either Debtor had consulted a doctor

and no corroborating medical evidence was offered.

. . .

Antonio testified that the communications from the IRS made him nervous and

unable to concentrate, caused him an upset stomach, and caused him and his wife

to argue about their debt to the IRS, and his wife would get so upset that they

would not talk for days. Sofia testified in her deposition that the stress caused by

the IRS’s communications manifested itself in neck pain, lack of sleep, and

muscle spasms. 

Id. at 651. The BAP concluded that the bankruptcy court did not abuse its discretion when it

awarded emotional distress damages in the amount of $5,000.00 to each debtor for a total of

$10,000.00. Id. On appeal, the First Circuit expressed skepticism that the debtors had met the

standard for emotional distress damages. Rivera Torres, 432 F.3d at 23 n.2 (“We will assume,

with some skepticism, that the debtors have met the standard for emotional distress damages.”)

(emphasis added). However, the First Circuit did not rule on this issue but instead reversed the

award of emotional damages against the United States on sovereign immunity grounds.

Having considered the standard outlined by the BAP and the comments of the First

Circuit, the Court finds that the Debtors have not demonstrated with competent evidence a

reasonable relationship between Citi’s violation of the discharge injunction (i.e., making an

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automated call requesting proof of insurance on their foreclosed residence) and any emotional

distress experienced by the Debtors. The record is clear that the Debtors had issues with their

son both before and after the phone call; the Debtors did not establish that any problems after

June 2013 were directly attributable to the phone call. The record is also clear that the Debtors

drank both before and after the phone call; the Debtors did not establish that any drinking after

June 2013 was directly attributable to the phone call. Further, while Mrs. Bates renewed her

request for a divorce after the phone call, she had asked for a divorce before the phone call; the

evidence at trial did not establish that her second request for a divorce was directly attributable

to the phone call. Mrs. Bates described various physical problems that occurred both before and

after the phone call; however, she testified that these problems were not so severe that she went

to see her doctor. Mr. Bates also described concerns that his heart issues were returning after the

phone call; however, he testified that his doctor told him he was doing okay. 

Overall, the Debtors testified that they were experiencing difficulties on many fronts, but

the evidence did not establish that the difficulties they described were caused by the June 2013

phone call rather than from the foreclosure and receipt of the tax forms, which the Court

previously found did not violate the Discharge Order, or from the normal stress of daily living

and being married and raising children. While the phone call may have aggravated their already

fragile state, and caused them to feel harassed by Citi, the record does not demonstrate that the

phone call did so in any direct or quantifiable way. Accordingly, the Court is unable to find a

basis for awarding emotional distress damages.

B. Attorney’s Fees and Expenses

Attorney’s fees and expenses are available as compensatory damages under § 105(a) for

violation of the discharge injunction and are analyzed under the same standard as attorney’s fees

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that are awarded as damages under 11 U.S.C. § 362(k) for violation of the automatic stay. Duby,

451 B.R. at 674. To calculate fee awards bankruptcy courts use the lodestar approach. Berliner

v. Pappalardo (In re Sullivan), 674 F.3d 65, 69 (1st Cir. 2012); see Rifken v. CapitalSource Fin.,

LLC (In re Felt Mfg. Co., Inc.), 402 B.R. 502, 523 (Bankr. D.N.H. 2009); In re Porter, 399 B.R.

113, 117 (Bankr. D.N.H. 2008). The lodestar method involves multiplying the number of hours

productively spent by the attorney (excluding hours that are excessive, redundant, or otherwise

unnecessary or spent on overworked tasks) by a reasonable hourly rate (which is benchmarked to

the prevailing rates in the community for lawyers with like qualifications, experience, and

competence). Joyce v. Town of Dennis, 720 F.3d 12, 27 (1st Cir. 2013); Sullivan, 674 F.3d at

69; Torres-Rivera v. O’Neill-Cancel, 524 F.3d 331, 336 (1st Cir. 2008); Lipsett v. Blanco, 975

F.2d 934, 937 (1st Cir. 1992); Wilson v. Port City Air, Inc., Civil No. 13-cv-129-LM, 2014 WL

7333016, at *2 (D.N.H. Dec. 19, 2014); Porter, 399 B.R. at 117. Courts “may adjust the lodestar

itself, upwards or downwards, based on any of several different factors, including the results

obtained and the time and labor actually required for the efficacious handling of the matter.” 

Torres-Rivera, 524 F.3d at 336; see Lipsett, 975 F.2d at 937. Courts may also disallow time

spent in litigating failed claims, subject to principles of interconnectedness and interrelatedness. 

Torres-Rivera, 524 F.3d at 336; Lipsett, 975 F.2d at 940-41. Reasonableness in the context of

awarding fees is largely a matter of a court’s informed judgment. Torres-Rivera, 524 F.3d at

336. The First Circuit has further explained that “[a] bankruptcy court’s explanation of its fee

award need not proceed line by line through the fee application. . . . There is no requirement that

a bankruptcy court, in explaining a fee award, be precise to the point of pedantry. Instead, the

explanation need only be sufficiently detailed to allow a reviewing court to ascertain the trial

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court’s thought processes and glean the basis for its award.” Sullivan, 674 F.3d at 70-71

(citations omitted). 

At trial, the Debtors presented a copy of their lawyers’ billing records, which show that

between September 21, 2011, and February 18, 2015, their lawyers provided 327.39 hours of

services at a total cost of $72,502.16, at an average rate of $221.45 per hour. While the billing

records include a description of services that generally detail the tasks that were performed and

the length of time spent on each task, the billing records omit key information, including the

identify of each person rendering services and whether they were an attorney, paralegal, or legal

assistant, the billing rate for each person providing services, the amount charged for each task

detailed in the billing records, the total amount of time spent by each person providing services,

and the total compensation sought by each person providing the services. See LBR 2016-

1(c)(2)(C) (outlining the items that should be included in a fee application filed in this district). 

“Where [a] party furnishes time records that are ill-suited for evaluative purposes, the court is

hampered in ascertaining whether those hours were excessive, redundant, or spent on irrelevant

issues. In such a circumstance, the court may adjust those entries to achieve an equitable result.” 

Torres-Rivera, 524 F.3d at 340 (citation omitted).

Attorney Harman testified at trial that twelve employees from her office worked on the

Debtors’ case. Although not provided in the written billing records submitted into evidence, at

trial, she outlined the rates charged by each employee. Attorney Harman was the lead attorney

on the case and charged $295.00 per hour when the litigation began and increased her rate to

$325.00 per hour as of August 1, 2014. 

Citi does not challenge the rates billed by the employees in Attorney Harman’s office,

and the Court finds that the rates are comparable to those charged by other law firms in this

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district with like qualifications, experience, and competence. Instead, Citi contends that the fees

requested are excessive, noting in particular that the fees requested include eighteen months of

services prior to the June 2013 phone call, which are unrelated to Count VI of the Complaint

concerning the phone call. Further, Citi points out that the billing records after June 2013 do not

make clear whether time was spent pursuing the Debtors’ claim concerning the phone call or the

Debtors’ other unsuccessful claims. Attorney Harman admitted at trial that other than the four

billing entries that expressly mention the phone call, there was no way for her (and thus the

Court) to determine what time was spent pursuing the Debtors’ claim under Count VI of the

Complaint. 

In addition, Citi argues that the time spent after the June 2013 call is far in excess of what

should have been reasonably spent given the complexity of the case and the fact that the

Plaintiffs did not suffer any significant damage as a result of the phone call. Citi points to the

fact that Attorney Harman exercised little or no control over the amount of time spent on tasks

and the number of timekeepers that were allowed to work on the case. 

The Court agrees with Citi. The time counsel spent litigating prior to the June 2013

phone call are not recoverable as damages related to Citi’s violation of the discharge injunction,

outlined in Count VI of the Complaint, with one exception: Count VI was added to an existing

complaint and therefore it would be reasonable to include some time for the drafting of the initial

complaint. Overall, upon review of the billing records, the Court estimates that the services

performed prior to June 11, 2013, total approximately 70 hours and should not be included in

any damage calculation.

The Court notes further that the time spent between June 17, 2013, when the Debtors first

contacted Attorney Harman about the phone call, and September 23, 2014, when the Court

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issued its order granting the Plaintiffs’ motion for summary judgment with respect to Count VI,

was spent on all six counts of the Complaint. Attorney Harman admitted that it would be

impossible to determine how much of the time spent during this period, which the Court

estimates totals 180 hours, was spent solely on issues related to the Debtors’ one successful

claim. There are other issues, however, with respect to this time. 

First, the Court finds that allowing twelve timekeepers to work on the case inevitably led

to duplication of work and loss of efficiencies. For example, the Court can find several entries in

the billing records that reflect time was spent getting employees up to speed on the case. On

June 20, 2014, there is an entry for “Review MB’s transfer memo on status of case.” On July 1,

2014, .5 hours was spent on “Conference with Vicki re: distinction between what was done on

November 8, 2013 as to the Bates’ Affidavits and what was done June 11, 2014 as to their

Affidavits.” On August, 25, 2014, a staff member spent .5 hours on “Draft[ing] transition memo

to MB.” On December 22, 2014, .7 hours was spent on “Conference with TH - intro to case;

discussed work to be done.” Further, the Court can find several examples where office

conferences were attended by multiple staff, some by as many as three or four employees. 

Exhibit 11 at 9/17/13, 1/14/14, and 10/28/14.

Second, the Court notes that many tasks took longer than reasonably required. For

example, it took Attorney Harman and another employee more than 9 hours to discuss, draft, and

review changes to the original complaint, which consisted of the addition of seven sentences

regarding the phone call, the addition of four sentences to deal with jurisdictional issues raised

by the Court at the initial pretrial conference, and other non-substantive, minor edits in the

introductory paragraphs of the complaint. Exhibit 11 at 7/25/13, 7/29/13, 7/31/13, and 8/1/13. It

also appears to have taken three staff members approximately 2.5 hours to get a court hearing reCase: 13-01043-JMD Doc #: 121 Filed: 04/16/15 Desc: Main Document Page 13 of 18
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scheduled, which should have been a routine task requiring minimal time and effort. Exhibit 11

at 5/21/14, 5/27/14, 5/29/14, and 6/4/14.

Third, the Court notes that the billing records may reflect some duplicate entries. For

example, on October 1, 2013, there are two entries each for .2 hours of time by the same

timekeeper with the entries described as “Office conference with MB re: extending deadlines”

and “Office conference with MB re: extension of deadlines.” On April 17, 2014, there are two

entries one for 1.2 hours and one for .7 hours, both by the same timekeeper with the exact same

description of “Prepare outline for hearing on motion for partial summary judgment.” On May

20, 2014, there are two entries each for .1 hours of time by Attorney Harman with the entries

described identically as “Office conference with MB regarding trial schedule.” On June 27,

2014, there are two entries each for .1 hours by the same timekeeper with the entries described as

“Conference with TH regarding steps to be taken in Bankruptcy Court; file declarations” and

“Telephone conference with TH regrding [sic] steps to be taken per Bankruptcy Court to file

declarations.” 

In addition, some of the billing records clearly show that time was spent on issues

unrelated to Count VI of the complaint. On July 17, 2013, an entry for 2.8 hours reflects time

was spent researching “tax consequences of bankruptcy discharge.” On April 16, 2014,

additional time was spent “regarding tax ramifications to discharge.” That same day another

entry for 4.6 hours includes time on “legal research re: whether filing 1099-A form violates

discharge injunction.” On May 6, 2014, time was spent discussing “potential Truth in Lending

Act claim.” On May 5, 2014, .8 hours was spent on “Legal research regarding appeal.” 

 In the final analysis, the Court concludes that the case was overworked. The Debtors

were unsuccessful on five of their six claims that the Defendants violated the discharge

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 Attorney Harman testified that her rate was $295.00 per hour through July 31, 2014, and

$325.00 thereafter. Accordingly, her rate was $295.00 for approximately two-thirds of the case, i.e., from

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injunction; they were only successful with respect to the June 2013 phone call. However, the

Debtors did not suffer any real damage as a result of Citi’s phone call to them. In a typical

violation of discharge case, counsel would have sent the creditor a demand letter and, if

unsuccessful, would have filed suit. Given the nature of the violation, and the lack of damages,

the parties would or should have settled the case. 

Here, Citi did not seriously contest that it erred by making the automated phone call in

June 2013. The Debtors never actually tried the liability issue as they won that issue on

summary judgment. The time spent preparing and trying the damage issue under Count VI was

not productive because the Debtors were unable to establish any actual damages. See Duby v.

United States (In re Duby), 2010 BNH 025, 3 (noting, in the violation of the automatic stay

context, that courts “may consider a lack of actual damages when determining the

reasonableness of attorneys’ fees and costs”), aff’d in part and rev’d in part, Duby, 451 B.R. 664.

The Court finds that the amount of attorney’s fees requested and the hours that were

expended were unreasonable in this case and bore no relationship to the amount of money that

was at issue (i.e., the cost of insurance on the Debtor’s former residence that arguably Citi was

requesting be procured) nor to any ascertainable emotional distress damages. Attorney Harman

and her firm could have properly represented the Debtors’ interest while accruing far fewer than

the 300+ billable hours claimed. See Sullivan, 674 F.3d at 71. In the Court’s view, the Debtors’

attorneys should have been able to resolve this matter in no more than 20 hours. Thus, using the

lodestar approach, the Court multiplies the number of hours productively spent, i.e., 20 hours, by

a reasonable hourly rate, i.e., $305.00,1 to obtain a total fee of $6,100.00. See Duby, 451 B.R. at

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June 2013 through July 2014, and $325.00 for approximately one-third of the case, i.e.. from August

2014 through February 2015. The Court calculates that her average hourly rate for the case was $304.90

(($295.00 x .67) + ($325.00 x .33)), which the Court will round to $305.00. The Court recognizes that

other employees in Attorney Harman’s office had lower rates but the Court is calculating the amount of

time that should have been spent on the case based on Attorney Harman’s qualifications and level of

experience. 

2

 $255.36 ÷ 6 = $42.56

3

 $0 + $42.46 + $136.91 = $179.47

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668 (concluding the bankruptcy court’s methodology in reducing fees to approximately sixteen

percent of the amount requested by the debtor, from $74,039.00 for 448.2 hours of service to

$11,848.50 for 79.9 hours of service, was sound and not an abuse of discretion); In re Bowling,

116 B.R. 659, 665 (Bankr. S.D. Ind. 1990) (awarding only $1,200.00 for attorney’s fees, in a

discharge violation case in which there were no actual damages, instead of the $5,000.00

requested as the requested amount was “excessive” and “out of proportion” to the $275.00

amount that was in dispute). 

In addition to attorney’s fees, the billing records show additional charges for expenses in

the total amount of $502.57. Of that total, $110.30 was incurred prior to the phone call in June

of 2013, $255.36 was incurred during their period when all six counts were pending, and

$136.91 was incurred after the Court ruled in favor of the Debtors’ with respect to liability under

Count VI. The Court shall disallow the pre-phone call expenses, allow one-sixth of the expenses

incurred when all six counts were pending,2 and allow all expenses incurred during the damages

phase. This results in allowable expenses of $179.47.3

C. Sanctions

At the close of trial, the Debtors requested that Citi be “sanctioned,” apart from any

award of emotional distress damages and attorney’s fees and costs, because Citi “never

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explained its conduct, never showed remorse, and never offered an apology.” As explained

earlier, bankruptcy courts may use their “statutory contempt power to order monetary relief, in

the form of actual damages, attorney fees, and punitive damages, when creditors have engaged in

conduct that violates § 524.” Bessette, 230 F.3d at 445. Section 105 gives bankruptcy courts

“broad authority to exercise its equitable power to ensure compliance with its own orders.” 

Duby, 2010 BNH 025, 6 (citing Fatsis v. Braunstein (In re Fatsis), 405 B.R. 1, 7 (B.A.P. 1st Cir.

2009)). In the present case, Citi does not dispute that it caused an automated phone call to be

made to the Debtors, more than two years after their home had been foreclosed, more than four

years after the Debtors’ bankruptcy discharge issued, and roughly a month after the Debtors had

already filed suit against Citi for other alleged violations of the discharge injunction. Citi

offered no explanation as to why the phone call was made. Obviously Citi’s systems and

procedures were inadequate or the phone call would not have made. The Court believes a small

sanction of $2,500.00 is appropriate in the case. The Court hopes this award of punitive

damages will act as a deterrent and motivate Citi to ensure that these types of violations do not

occur in the future.

IV. CONCLUSION

Based on the foregoing the Court finds that the Debtors did not establish any entitlement

to damages for out-of-pocket expenses or emotional distress pursuant to §105(a) on account of

Citi’s violation of the discharge injunction in § 524. The Court further finds that the Debtors are

entitled to an award of attorney’s fees in the amount of $6,100.00 and expenses of $179.47 as

well as punitive damages in the amount of $2,500.00, for a total award of $8,779.47. This

opinion constitutes the Court’s findings of fact and conclusions of law in accordance with

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Federal Rule of Bankruptcy Procedure 7052. The Court will issue a separate judgment

consistent with this opinion.

ENTERED at Manchester, New Hampshire.

Date: April 16, 2015 /s/ J. Michael Deasy

J. Michael Deasy

Bankruptcy Judge

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