Opinion ID: 705215
Heading Depth: 3
Heading Rank: 2

Heading: Trustee as Individual

Text: 34 Although we agree with the conclusions of both the bankruptcy court and the BAP that the Appellants' conduct amounted to a violation of the automatic stay, our inquiry does not end there. Section 362(h) states, in relevant part, that An individual injured by any willful violation of a stay ... shall recover actual damages, including costs and attorney's fees[.] 11 U.S.C. Sec. 362(h) (emphasis added). The Appellants argue that, even if their conduct amounted to a willful violation of the automatic stay, they cannot be held liable for the costs and attorney's fees incurred by Taxel, because he incurred those costs and fees as a trustee, i.e., as the representative of a legal entity (the bankruptcy estate), and not as an individual. We agree. 35 There is no controlling authority from this or any other circuit that answers the question posed. Even the BAP split on this issue, with one judge concluding that the trustee was an individual for purposes of section 362(h) because he was an individual representing the estate of an individual, while the other two judges held that, because a trustee represents a thing and not a natural person, a trustee is not an individual entitled to recover damages under section 362(h). In re Pace, 159 B.R. at 903-904, 905-906. 36 Perhaps because paragraph (h) was only added to section 362 in 1984, 8 there is little case law dealing with the question of whether a Chapter 7 trustee is an individual entitled to recover as damages the costs and attorney's fees incurred by the trustee on behalf of the bankruptcy estate. However, two of the leading bankruptcy treatises hint that individual in this context should not be read so narrowly as to preclude either trustees, see 2 Collier on Bankruptcy pp 362.11 & n. 8, 362.12 & n. 4 (Lawrence P. King et al. eds., 15th ed. 1995), or their counterparts, e.g., corporate debtors. See 1 David G. Epstein, et al., Bankruptcy Sec. 3-33a at 362 (1992). Moreover, many of the reported decisions involving Chapter 7 trustees seeking damages under section 362(h) point in favor of treating such trustees as individuals. See, e.g., Shimer v. Fugazy (In re Fugazy Express, Inc.), 124 B.R. 426, 431 (S.D.N.Y.1991) (trustee was awarded damages consisting of one-third of the trustee's costs and fees), appeal dism'd, 982 F.2d 769 (2d Cir.1992); Uecker v. Davidson (In re Bair Island Marine & Office Ctr.), 116 B.R. 180, 185 & n. 2 (Bankr.N.D.Cal.1990) (individual is synonymous with entity, and can include a U.S. Trustee); In re M & J Feed Mill, Inc., 112 B.R. 985, 989 (Bankr.W.D.Mo.1990) (award of $1,100 against individual, representing ten hours of the trustee's time). See also cases collected at Martino v. First Nat'l Bank in Harvey (In re Garofalo's Finer Foods, Inc.), 164 B.R. 955, 972 (Bankr.E.D.Ill.1994). 37 Nevertheless, we find the analyses of the majority in In re Pace, and of the bankruptcy judge in In re Garofalo's Finer Foods, Inc., to be persuasive. In those two cases, the judges noted that, while a trustee can be an individual if the trustee is a natural person (as opposed to, e.g., a corporate entity), the individual's status as trustee precludes any finding that the trustee suffered any damages as an individual, because any harm suffered in the form of costs and attorney's fees is actually incurred by a thing, viz., the bankruptcy estate, and not by the trustee as a natural person. In re Pace, 159 B.R. at 905-906; In re Garofalo's Finer Foods, Inc., 164 B.R. at 972-73. See also Sosne v. Reinert & Duree, P.C. (In re Just Brakes Corp. Sys.), 175 B.R. 288, 291-92 (Bankr.E.D.Mo.1994) (the trustee was not entitled to recover damages under section 362(h) because he acted as the representative of a corporate entity's bankruptcy estate). 38 This analysis and result comport with our holding in Johnston Environmental Corp. v. Knight (In re Goodman), 991 F.2d 613 (9th Cir.1993). In that case we held that, while a corporate entity can be a person, it cannot be an individual for purposes of section 362(h), because individual is not synonymous with person under the relevant provisions of the Bankruptcy Code. Id. at 619-20. In light of the above, we conclude that a Chapter 7 trustee is not an individual for purposes of 11 U.S.C. Sec. 362(h) entitled to recover attorney's fees as damages. 39