Court Opinion

ID: 2757083
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:28.439961+00
Date Added: 2024-06-11T10:31:56.183488
License: Public Domain

FILED
 1                         ORDERED PUBLISHED                JUN 28 2012
                                                       SUSAN M SPRAUL, CLERK
 2                                                       U .S . B K C Y. A P P . P A N E L
                                                         O F TH E N IN TH C IR C U IT

 3                   UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                             OF THE NINTH CIRCUIT
 5
 6   In re:                           ) BAP No.   NV-11-1429-PaDKi
                                      )
 7   IRENE MICHELLE SCHWARTZ-TALLARD, ) Bk. No.   07-11730-LBR
                                      )
 8                       Debtor.      )
     _________________________________)
 9                                    )
     IRENE MICHELLE SCHWARTZ-TALLARD, )
10                                    )
                         Appellant,   )
11                                    )
     v.                               )      O P I N I O N
12                                    )
     AMERICA’S SERVICING COMPANY,     )
13                                    )
                         Appellee.    )
14   _________________________________)
15
                      Argued and Submitted on June 15, 2012,
16                             at Las Vegas, Nevada
17                            Filed - June 28, 2012
18                Appeal from the United States Bankruptcy Court
                            for the District of Nevada
19
              Honorable Linda B. Riegle, Bankruptcy Judge, Presiding
20
21
     Appearances:     Christopher Burke, Esquire argued for appellant
22                    Irene Michelle Schwartz-Tallard; Andrew Martin
                      Jacobs, Esquire of Snell & Wilmer LLP argued for
23                    Appellee America’s Servicing Company.
24
25   Before:    PAPPAS, DUNN and KIRSCHER, Bankruptcy Judges.
26
27
28
 1   PAPPAS, Bankruptcy Judge:
 2
 3        Chapter 131 debtor Irene Michelle Schwartz-Tallard (“Debtor”)
 4   appeals the order of the bankruptcy court denying her Motion for
 5   Attorney Fees and Costs from America’s Servicing Company (“ASC”)
 6   for Defending Appeal.   We REVERSE and REMAND.
 7                                  I. FACTS
 8        Debtor filed a chapter 13 petition on March 30, 2007.      Among
 9   Debtor’s listed secured creditors was ASC, a company that serviced
10   a loan secured by a mortgage on Debtor’s home in Henderson, Nevada
11   (the “Property”).    Though Debtor had made all post-petition
12   monthly mortgage payments, on February 27, 2009, ASC filed a
13   motion for relief from the automatic stay in the bankruptcy case,
14   erroneously claiming Debtor owed mortgage payments for January and
15   February 2009.   Debtor, who was not informed about ASC’s stay
16   relief motion by her former counsel, did not oppose the motion,
17   and the bankruptcy court entered an order terminating the
18   automatic stay on April 6, 2009.
19        When Debtor attempted to make her April 2009 mortgage
20   payment, ASC returned it with a letter indicating her loan was in
21   “foreclosure status.”   Debtor called ASC, and its representative
22   told her the loan status changed when she missed the January and
23   February payments.   Debtor challenged ASC’s assertion that she had
24   defaulted, and provided ASC’s representative with the check
25   numbers she used to make the January and February payments.      With
26
27        1
             Unless otherwise indicated, all chapter, section and rule
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
28   to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.

                                      -2-
 1   those numbers, ASC’s representative located a record of the
 2   payments and admitted a mistake had been made.
 3        After retaining new counsel, Debtor filed a motion to set
 4   aside the stay relief order and to reinstate the stay in the
 5   bankruptcy court on May 6, 2009.   ASC did not oppose, and the
 6   bankruptcy judge orally granted Debtor’s motion at a hearing held
 7   on May 13, 2009, at which ASC did not appear.    On May 14, Debtor
 8   sent ASC checks for the April and May 2009 mortgage payments,
 9   along with an explanation that the bankruptcy court had reinstated
10   the stay on May 13.    ASC returned those checks on May 18, stating
11   it could not accept them because the funds were not certified.      On
12   May 20, ASC caused the Property to be sold at a trustee’s
13   foreclosure sale.   The bankruptcy court entered an order
14   reinstating the stay on June 3, 2009.
15        On June 9, Debtor filed a motion seeking monetary sanctions
16   against ASC for its willful violation of the automatic stay (the
17   “Sanctions Motion”).   Debtor’s sole argument2 was that sanctions
18   were appropriate under § 362(k) because ASC had willfully violated
19   the stay by selling Debtor’s home at the trustee’s sale on May 20,
20   even though the bankruptcy court, on May 13, had orally granted
21
          2
             Debtor’s argument in the Sanctions Motion was somewhat
22   vague. In identifying how she believed ASC had violated the stay,
     Debtor alleged:
23
          In this matter, though as of May 13, 2009 [, ASC]
24        clearly had actual notice that it was the Court’s intent
          that the automatic stay be reinstated, [it] blatantly
25        disregarded the court’s instruction and continued
          foreclosure efforts. This type of callous disregard to
26        the authority of the court and clear mandates of the
          statutes as set forth in the Bankruptcy Code cannot and
27        should not be tolerated.
28   Debtor’s Motion for Sanctions at 7.

                                      -3-
 1   her motion to reinstate the stay.     Debtor attached to her motion a
 2   copy of a May 28, 2009, Three Day Notice to Quit served on her by
 3   ASC; a May 28, 2009, Notice of New Ownership that ASC had posted
 4   on the Property; and her affidavit describing how the Notice of
 5   New Ownership had affected her family.    Debtor’s motion and
 6   supporting documents did not indicate that she was seeking
 7   sanctions under any authority other than § 362(k).
 8        In response to Debtor’s Sanctions Motion, ASC argued that the
 9   stay had not been reinstated until June 3, 2009, when the
10   bankruptcy court entered the order reinstating the stay.
11   Therefore, ASC contended, its actions targeted by Debtor, which
12   occurred between May 13 and June 3, were not taken in violation of
13   the stay.
14        The bankruptcy court conducted the hearing on Debtor’s
15   Sanctions Motion on January 7, 2010.    At the hearing, it came to
16   light that during the eight months since the bankruptcy court’s
17   stay-reinstatement hearing, ASC had taken no action to set aside
18   the foreclosure sale or to reconvey the Property to Debtor.3      At
19   the conclusion of the January 7 hearing, the bankruptcy court
20   found ASC had violated the automatic stay.    The court decided
21   that, even if ASC did not learn of the stay reinstatement until
22   June 3, when the reinstatement order was entered, ASC violated the
23   stay by not acting to reconvey the Property to Debtor once ASC
24   discovered that the foreclosure sale had occurred in violation of
25   the stay.   The bankruptcy court concluded that imposition of
26
27        3
             The lender credit bid at the May 20, trustee’s sale, and
     held title to the Property on January 7. The Property was finally
28   reconveyed to Debtor on March 3, 2010.

                                     -4-
 1   sanctions against ASC was appropriate under § 362(k).
 2        In addition, the bankruptcy court awarded sanctions against
 3   ASC under Rule 9011.   Because Debtor had made her January and
 4   February 2009 mortgage payments, and because ASC’s stay relief
 5   motion represented that those payments had not been made, the
 6   bankruptcy court found that ASC had engaged in sanctionable
 7   conduct under Rule 9011 by filing and pursuing a “false motion.”4
 8        On February 17, 2010, the bankruptcy court entered an order
 9   (the “Stay Violation Order”) incorporating its January 7 oral
10   findings of fact and conclusions of law.5   According to the
11   court’s Stay Violation Order, because ASC violated the automatic
12   stay and Rule 9011, Debtor was entitled to recover $40,000 for
13   emotional distress and economic damages; $20,000 for punitive
14
15        4
             At the hearing on Debtor’s Sanctions Motion, the
     bankruptcy court mistakenly indicated that Rule 9011 had been
16   alleged in Debtor’s motion as one source for the court’s authority
     to impose sanctions. Debtor’s attorney indicated he had asked for
17   Rule 9011 sanctions in his “pretrial brief.” To be precise,
     however, the brief, filed a mere three days before the hearing on
18   Debtor’s Sanctions Motion, contended that the bankruptcy court
     could “hold a separate hearing and impose sanctions under
19   Rule 9011(c)(1)(B), if Rule 9011(b) is violated.” Pretrial Brief
     in Support of Motion for Contempt for Violation of the Automatic
20   Stay at 7, Bankr. No. BK-S-07-11739-LBR, Dkt. No. 100 (emphasis
     added). It therefore appears clear that ASC did not have
21   effective notice that Rule 9011 may be invoked by Debtor as a
     potential legal basis for imposing sanctions against ASC at the
22   January 7 hearing.
23        5
             The Stay Violation Order, submitted by Debtor’s counsel,
     was docketed as an order concerning “Debtor’s Motion for Contempt
24   for Violation of the Automatic Stay and Violation of
     F.R.B.P. 9011.” Of course, no such motion had ever been filed
25   with the bankruptcy court. While the bankruptcy court imposed
     sanctions against ASC under both § 362(k) and Rule 9011, Debtor’s
26   motion never referenced Rule 9011. The District Court, in
     reviewing an appeal of the Stay Violation Order, also found that
27   “[t]he motion itself nowhere mentions Rule 9011, but only § 362.”
     America’s Servicing Co. v. Schwartz-Tallard, 438 B.R. 313, 320 (D.
28   Nev. 2010).

                                     -5-
 1   damages; and $20,000 in attorneys’ fees.    ASC was also ordered to
 2   reconvey the Property to Debtor within two days.
 3          ASC appealed the Stay Violation Order on March 2, 2010, to
 4   the District Court.   The District Court entered its decision on
 5   September 14, 2010.   See Schwartz-Tallard, 438 B.R. 313.   In
 6   regard to the stay violation, the District Court decided that ASC
 7   knew, or had received notice, that the stay had been ordered
 8   reinstated by the bankruptcy court by May 17, 2009, and that ASC’s
 9   act of causing the foreclosure sale to occur on May 20, and all
10   its subsequent actions, were a violation of the stay.    See id. at
11   317–19.    According to the District Court, from and after the time
12   the sale occurred, ASC had an ongoing duty to see that the
13   Property was reconveyed to Debtor, and to mitigate Debtor’s
14   damages.   Id. at 320.
15          However, the District Court concluded that the bankruptcy
16   court’s award of damages to Debtor for violating Rule 9011 was
17   inappropriate because the court had not followed the procedure
18   required by the Rule.6   Id. at 320.   The District Court remanded
19   this aspect of the matter to the bankruptcy court, so that if it
20   elected to do so, proper notice could be given to ASC, and further
21   proceedings concerning Rule 9011 could be conducted.    See id. at
22   323.
23          In addition, while § 362(k) authorized an award to Debtor for
24   attorneys’ fees as damages, because the bankruptcy court had not
25
            6
             The District Court stated that the bankruptcy court could
26   still “impose attorney’s fees under Rule 9011 if it follow[ed] the
     requirements of that rule.” Schwartz-Tallard, 438 B.R. at 323.
27   The bankruptcy court chose not to follow the Rule 9011 procedural
     requirements, and, on remand, ASC was sanctioned pursuant to
28   § 362(k) only.

                                      -6-
 1   specifically found that the amount it awarded had been actually
 2   incurred by Debtor, the District Court also remanded that issue to
 3   the bankruptcy court.    Id. at 320–23.
 4        The bankruptcy court held an evidentiary hearing to determine
 5   the actual amount of Debtor’s attorneys’ fees on January 13, 2011.
 6   After that hearing, the bankruptcy court entered a judgment
 7   awarding Debtor attorneys’ fees of $20,115.40 “under 11 U.S.C.
 8   § 362(k).”   ASC did not appeal that order.
 9        On February 26, 2011, Debtor filed a motion in the bankruptcy
10   court under § 362(k), seeking an award of attorneys’ fees and
11   costs incurred by Debtor for defending ASC’s appeal of the Stay
12   Violation Order to the District Court (Debtor’s “Appellate
13   Attorneys’ Fees”).   ASC opposed Debtor’s motion, arguing that
14   Debtor’s request for Appellate Attorneys’ Fees pursuant to
15   § 362(k) was prohibited under the Ninth Circuit’s decision in
16   Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), cert. denied
17   131 S. Ct. 102 (2010).    In reply, Debtor argued that Sternberg did
18   not limit her ability to recover Appellate Attorneys’ Fees
19   pursuant to § 362(k) because she participated in the appeal as an
20   appellee.    In addition, she asserted that her Appellate Attorneys’
21   Fees were also recoverable pursuant to Rule 9011 and the
22   bankruptcy court’s § 105(a) inherent sanctioning authority.
23        The hearings on Debtor’s motion for Appellate Attorneys’ Fees
24   took place on March 30 and July 12, 2011.     After hearing the
25   parties’ arguments at the March 30 hearing, the bankruptcy court
26   denied Debtor’s motion at the July 12 hearing for the sole reason
27   that, as contended by ASC, Sternberg prevented the court from
28

                                      -7-
 1   awarding Appellate Attorneys’ Fees under § 362(k).7
 2          The bankruptcy court entered an order denying Debtor’s motion
 3   for Appellate Attorneys’ Fees on July 26, 2011, “for the reasons
 4   set forth on the record.”      Debtor filed a timely appeal on
 5   August 8, 2011.
 6                                 II. JURISDICTION
 7          The bankruptcy court had jurisdiction under 28 U.S.C.
 8   §§ 1334(b) and 157(b)(2)(A).      We have jurisdiction under 28 U.S.C.
 9   § 158.
10                                   III. ISSUES
11          1.    Whether the bankruptcy court erred in deciding that
12   Sternberg bars Debtor’s request to recover her Appellate
13   Attorneys’ Fees pursuant to § 362(k).
14          2.    Whether the bankruptcy court abused its discretion in not
15   awarding Debtor’s Appellate Attorneys’ Fees pursuant to Rule 9011.
16          3.    Whether the bankruptcy court abused its discretion in not
17   awarding Debtor’s Appellate Attorneys’ Fees pursuant to the
18   court’s § 105(a) authority.
19                              IV. STANDARD OF REVIEW
20          We review a bankruptcy court’s attorneys’ fees decision for
21   an abuse of discretion.      State of Cal. Emp’t Dev. Dep’t v. Taxel
22   (In re Del Mission Ltd.), 98 F.3d 1147, 1152 (9th Cir. 1996).        In
23   determining whether a bankruptcy court abused its discretion, we
24   review whether the bankruptcy court applied the correct rule of
25   law.       United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.
26   2009) (en banc).      We then determine whether the court’s
27
            7
             In its July 12, 2011, oral decision, the bankruptcy court
28   did not mention § 105(a) or Rule 9011.

                                         -8-
 1   application of that rule was illogical, implausible, or without
 2   support in inferences that may be drawn from the facts in the
 3   record.   Id. (quoting Anderson v. City of Bessemer City, N.C.,
 4   470 U.S. 564, 577 (1985)).
 5                                V. DISCUSSION
 6        On appeal, Debtor argues that she may recover her Appellate
 7   Attorneys’ Fees pursuant to § 362(k) despite the ruling in
 8   Sternberg.   In the alternative, Debtor asserts that she may be
 9   awarded Appellate Attorneys’ Fees pursuant to Rule 9011 and § 105.
10        ASC, on the other hand, argues that, per Sternberg, Debtor’s
11   Appellate Attorneys’ Fees are not “actual damages” under § 362(k)
12   and therefore may not be recovered.     ASC also asserts that,
13   because the District Court and the bankruptcy court determined
14   that the Stay Violation Order sanctions were based on § 362(k),
15   and not Rule 9011, that Rule cannot now serve as a basis for an
16   award of Debtor’s Appellate Attorneys’ Fees.    Finally, ASC
17   contends that a finding of contempt is a prerequisite to an award
18   of attorneys fees pursuant to § 105(a), and, since there was no
19   finding of contempt in this case, § 105(a) does not support a
20   grant of Debtor’s Appellate Attorneys’ Fees.
21        Proceedings in the federal courts are typically governed by
22   the so-called American Rule, which provides that parties must bear
23   their own attorneys’ fees.    See Fogerty v. Fantasy, Inc., 510 U.S
24   517, 533 (1994).   There are, however, limited exceptions to this
25   general rule against shifting responsibility for attorneys’ fees.
26   See id.; see also Chambers v. NASCO, Inc., 501 U.S. 32, 45–46
27   (1991).   For example, attorneys’ fees may be awarded to a
28   prevailing party when authorized by a statute.    Fogerty, 510 U.S.

                                       -9-
 1   at 533 (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,
 2   421 U.S. 240, 247–62 (1975)).       In addition, a court may award a
 3   prevailing party attorneys’ fees when another party has “acted in
 4   bad faith, vexatiously, wantonly, or for oppressive reasons.”
 5   Chambers, 501 U.S. at 45–46 (internal quotations omitted).
 6        Here, Debtor contends her Appellate Attorneys’ Fees should be
 7   shifted to ASC as statutorily authorized by § 362(k).      She also
 8   argues recovery under Rule 9011 and § 105(a) are justified because
 9   ASC acted in bad faith.       See Alyeska Pipeline Serv. Co., 421 U.S.
10   at 247–62; Chambers, 501 U.S. at 45–46.       ASC responds that none of
11   these grounds justifies an award of Debtor’s Appellate Attorneys’
12   Fees.       We examine each in turn.
13
     A.   Sternberg did not bar the bankruptcy court from awarding
14        Debtor her Appellate Attorneys’ Fees pursuant to § 362(k).
15        The bankruptcy court awarded Debtor damages resulting from
16   ASC’s stay violation pursuant to § 362(k).8      Debtor asserts her
17   Appellate Attorneys’ Fees are part of those damages and are
18   likewise legislatively authorized pursuant to that statute.
19   Section 362(k)(1) provides, in part:
20        an individual injured by any willful violation of a stay
21
             8
             Debtor repeatedly asserts that the District Court also
22   upheld the bankruptcy court’s award of sanctions pursuant to
     Rule 9011. We disagree. The District Court concluded that the
23   bankruptcy court had not followed Rule 9011’s procedural
     requirements and, therefore, the bankruptcy court’s sanctions were
24   not supported by Rule 9011. Schwartz-Tallard, 438 B.R. at 320.
     The District Court indicated that, on remand, if the bankruptcy
25   court chose to follow the Rule 9011 requirements, it may impose
     sanctions pursuant to that Rule. See id. at 323. Providing an
26   option to the bankruptcy court to conduct further, procedurally
     proper, proceedings is not the same as endorsing the bankruptcy
27   court’s Rule 9011 sanctions award. In the end, the bankruptcy
     court did not elect to follow Rule 9011 procedures and did not
28   award sanctions pursuant to that Rule.

                                            -10-
 1        provided by this section shall recover actual damages,
          including costs and attorneys’ fees, and, in appropriate
 2        circumstances, may recover punitive damages.
 3   ASC, however, argues that, according to the Ninth Circuit’s
 4   interpretation of § 362(k) “actual damages” in Sternberg, an award
 5   of Debtor’s Appellate Attorneys’ Fees is prohibited.     To
 6   understand how the Sternberg decision applies to this case, it is
 7   helpful to review the complicated history of the controversy
 8   involved in that case.
 9        In Sternberg, the debtor filed two concurrent stay-related
10   actions:   a motion asking the bankruptcy court to vacate a state
11   court order that he argued was issued in violation of the stay,
12   and a stay violation adversary proceeding against his ex-wife and
13   her counsel for not acting to remedy the state court’s stay-
14   violating order.   595 F.3d at 941.     In response to the debtor’s
15   motion, and after a hearing, the bankruptcy court granted the
16   debtor’s request to deem the state court order ineffective,
17   thereby remedying the stay violation caused by the state court
18   order.   Id. at 941–42.
19        Later, even though the stay violation by the debtor’s ex-wife
20   and her counsel had been addressed,9 the bankruptcy court held a
21   trial in the adversary proceeding to determine whether the
22   debtor’s ex-wife and her counsel had, at some point, violated the
23   stay, and, if they had, what damages and sanctions were
24   appropriate.   Id. at 942.   Although the bankruptcy court ruled in
25
          9
             As a practical matter, since the bankruptcy court
26   invalidated the state court’s order, the debtor’s ex-wife and her
     counsel could no longer act to “remedy” the state court’s stay
27   violation. The debtor’s argument that they were violating the
     automatic stay by not acting to address the state court’s stay
28   violation was, therefore, mooted.

                                      -11-
 1   favor of the debtor’s ex-wife and her counsel, the debtor
 2   appealed, and the district court determined the ex-wife and her
 3   counsel had indeed violated the stay.     Id.    On remand, the
 4   bankruptcy court awarded the debtor $92,869.20 in damages on
 5   account of his ex-wife’s attorney’s conduct in violating the
 6   stay.10   Id.   Debtor’s ex-wife’s counsel appealed that damages
 7   award.    Id.   The Ninth Circuit, in Sternberg, addressed whether
 8   the bankruptcy court erred in calculating the damages awarded to
 9   the debtor.     Id. at 943.
10        As acknowledged in the Sternberg decision, Congress clearly
11   intended to allow a party to recover, as damages, the attorneys’
12   fees incurred by a debtor to enforce the automatic stay.       Id. at
13   946–48.    Such an award is different, however, from allowing the
14   recovery, as damages, of attorneys’ fees incurred in a debtor-
15   initiated court action for damages resulting from a stay
16   violation.11    See id. at 946–47.   Per Sternberg, in such instances,
17   any fees incurred “in pursuit of a damage award would not be to
18   compensate for ‘actual damages’ under § 362(k)(1),” and would not
19   be allowable.     Id. at 947 (emphasis added).
20        Sternberg explained that whether a debtor may recover
21   attorneys’ fees under § 362(k) hinges on the distinction between
22
23
          10
             After the stay violation issue was remanded by the
24   district court, and before the bankruptcy court determined the
     debtor’s damages, the debtor’s ex-wife settled with the debtor.
25   Sternberg, 595 F.3d at 942.
26        11
             Because in Sternberg the stay violation had been remedied
     prior to the bankruptcy court’s consideration of the debtor’s
27   adversary proceeding, the Ninth Circuit viewed the adversary
     proceeding as “akin to an ordinary damages action.” 595 F.3d at
28   948.

                                       -12-
 1   an action to enforce the automatic stay, and a debtor’s pursuit of
 2   stay violation damages, and implicates the context and purposes of
 3   the automatic stay.    Id. at 947–48.   The court observed that the
 4   stay has two primary purposes:    (1) to enable a debtor to try and
 5   reorganize during a break from collection efforts, and (2) to
 6   protect creditors by preventing each from pursuing its own
 7   remedies at the expense of all other creditors.     Id. at 947
 8   (citing Dawson v. Wash. Mut. Bank, F.A. (In re Dawson), 390 F.3d
 9   1139, 1147 (9th Cir. 2004)).    Those purposes promote both
10   financial and non-financial goals.      Id. at 947–48 (quoting In re
11   Dawson, 390 F.3d at 1147).    “‘[O]ne aim of the automatic stay is
12   financial[, as] the stay gives the debtor time to put finances
13   back in order, . . . [b]ut another purpose is to create a
14   breathing spell’ for a debtor from his creditors.”     Id. at 948
15   (quoting In re Dawson, 390 F.3d at 1147).
16        The court in Sternberg decided that “[p]ermitting a debtor to
17   collect attorney fees incurred in prosecuting a damages action
18   would further neither the financial nor the non-financial goals of
19   the automatic stay.”    Id. at 948.   Prosecuting a damages action
20   would not further the financial goal of the stay because the
21   debtor’s goal was to “pursu[e] his creditors,” rather than to
22   reorganize his finances.    Id. (“We have never said the stay should
23   aid the debtor in pursuing his creditors, even those creditors who
24   violate the stay.   The stay is a shield, not a sword.” (emphasis
25   added)).   Such an action would also not further the stay’s non-
26   financial goal, because it would not result in a breathing spell
27   for the debtor, since a damages action requires the debtor to
28   pursue litigation during the intended respite afforded by the

                                      -13-
 1   automatic stay.   Id.   Thus, Sternberg determined that while
 2   recovery of attorneys’ fees is allowed pursuant to § 362(k) when
 3   related to enforcement of the automatic stay, the attorneys’ fees
 4   incurred in a debtor’s pursuit of a “damages action for a stay
 5   violation” may not be recovered.    Id.
 6        In this case, Debtor’s defense of ASC’s appeal of the
 7   bankruptcy court’s decision is fundamentally different from the
 8   damages action in Sternberg, where the Ninth Circuit noted that
 9   the debtor was pursuing a damages action even though the subject
10   stay violation had been remedied.    Here, when ASC appealed the
11   Stay Violation Order to the District Court, Debtor was required to
12   defend the bankruptcy court’s decision, not only to protect the
13   award of damages, but also to uphold the bankruptcy court’s
14   determination that ASC had, indeed, violated the stay.   See
15   Schwartz-Tallard, 438 B.R. at 317.
16        Moreover, Debtor’s defense of ASC’s appeal was consistent
17   with the goals of the automatic stay identified by the court in
18   Sternberg.   First, defending the bankruptcy court’s order assisted
19   Debtor in her efforts to reorganize her finances.   Had she been
20   required to pay the attorneys’ fees she incurred in remedying
21   ASC’s wrongful foreclosure, Debtor’s completion of her chapter 13
22   plan may have been jeopardized.
23        In addition, Debtor was clearly not using the automatic stay
24   as a sword to pursue damages from ASC.    Debtor likely would have
25   been content to let the bankruptcy court’s award of damages stand.
26   On appeal, Debtor merely defended those damages, and in doing so
27   incurred the subject attorneys’ fees, when ASC appealed the Stay
28   Violation Order and attacked the bankruptcy court’s enforcement of

                                       -14-
 1   the automatic stay and its award of stay-enforcement damages.          As
 2   can be seen, in this instance, Debtor’s defensive position in the
 3   appeal did not run afoul of Sternberg’s concern for debtors using
 4   the stay to pursue damages instead of reorganizing their finances.
 5        Second, rather than allow Debtor the benefit of the stay’s
 6   breathing spell, ASC continued its attack on the bankruptcy
 7   court’s determination that Debtor’s automatic stay had been
 8   violated and that Debtor had incurred damages in enforcing the
 9   stay.   As the Ninth Circuit noted, “[m]ore litigation is hardly
10   consistent with the concept of a ‘breathing spell’ for the
11   debtor.”   Sternberg, 595 F.3d at 948.     In other words, an appeal
12   by a stay violator, which requires a bankruptcy debtor to continue
13   to participate in litigation to defend her stay and properly
14   awarded stay-enforcement damages, deprives the debtor of the
15   benefits of her automatic stay.     Simply put, Debtor’s defense of
16   the bankruptcy court’s decision was an extension of her efforts to
17   enforce her automatic stay.
18        At bottom, Sternberg determined that the attorneys’ fees
19   sought by the debtor were not part of the debtor’s damages
20   resulting from the stay violation as required by § 362(k).       Id. at
21   945–48.    In doing so, the Sternberg panel found the term “actual
22   damages” to be ambiguous.    Id. at 947.   For a meaning, the court
23   adopted a definition from Black’s Law Dictionary specifying that
24   actual damages are “[a]n amount awarded . . . to compensate for a
25   proven injury or loss; damages that repay actual losses.”       Id.
26   (quoting BLACK ’S LAW DICTIONARY 416 (8th ed. 2004)).   As Sternberg
27   continued, in stay violation settings, the “proven injury is the
28   injury resulting from the stay violation itself.”       Id.   Once a

                                       -15-
 1   stay violation has been remedied, “any fees the debtor incurs
 2   after that point in pursuit of a damage award would not be to
 3   compensate for ‘actual damages’ under § 362(k)(1).”   Id.
 4         Of course, in Sternberg, the point at which the stay
 5   violation had been “remedied” was clear.   Id. at 941–42.    The
 6   debtor’s ex-wife did not appeal the bankruptcy court’s vacation of
 7   the state court’s order, and the primary issue remaining in the
 8   debtor’s adversary proceeding was the amount of damages
 9   attributable to the conduct of debtor’s ex-wife and her counsel.
10   Id.   In contrast, here, while the Property was finally reconveyed
11   to Debtor the day after ASC filed its notice of appeal, Debtor was
12   forced to defend that appeal to validate the bankruptcy court’s
13   ruling that ASC had violated the stay, and to preserve her right
14   to collect the pre-remedy damages awarded by the bankruptcy court.
15   “Clearly, fees and costs experienced by an injured party in
16   resisting the [stay] violator’s appeal are part of the damages
17   resulting directly from the stay violation.”   Beard v. Walsh
18   (In re Walsh), 219 B.R. 873, 878 (9th Cir. BAP 1998).12     Put
19   another way, Debtor’s Appellate Attorneys’ Fees, incurred to
20   ensure the continuity of the stay, and to protect her stay-
21   enforcement damage award, are no less damages “resulting from the
22   stay violation itself” merely because she had to defend their
23   enforcement at the appellate level rather than the bankruptcy
24   court, and because the appeal took place after the Property was
25
           12
             Sternberg admittedly rejected the BAP’s determination in
26   Walsh that § 362(k)’s predecessor, § 362(h), required an injured
     party to be made whole. Sternberg, 595 F.3d at 947. At the same
27   time, Sternberg did not invalidate Walsh’s finding that damages
     incurred on appeal are actual damages directly resulting from the
28   stay violation itself. See id.

                                     -16-
 1   reconveyed to her.
 2         In sum, the attorneys’ fees incurred by Debtor in defending
 3   the bankruptcy court’s Stay Violation Order on appeal were actual
 4   damages pursuant to § 362(k)(1).    The bankruptcy court therefore
 5   abused its discretion when it decided that Sternberg prohibited
 6   recovery of those fees.    We REVERSE the bankruptcy court’s
 7   decision.
 8   B.    The bankruptcy court did not abuse its discretion in not
           awarding Debtor Appellate Attorneys’ Fees pursuant to
 9         Rule 9011.
10         On appeal, the District Court concluded that the bankruptcy
11   court awarded Debtor damages pursuant to § 362(k)(1).      Schwartz-
12   Tallard, 438 B.R. at 320.    At the same time, the District Court
13   decided that Rule 9011 was not an appropriate basis for recovery
14   of Debtor’s damages in this case because the bankruptcy court did
15   not adhere to the Rule’s procedural requirements.    Id.   If the
16   bankruptcy court so desired, however, the District Court
17   authorized it, on remand, to invoke proper Rule 9011 procedures
18   and, after further notice and a hearing, to award sanctions
19   pursuant to that Rule.    Id. at 323.   However, the bankruptcy court
20   chose not to do so, and, ultimately, no Rule 9011 damages were
21   awarded.
22         On this record, we find no abuse of discretion in the
23   bankruptcy court’s decision to decline to award Debtor her
24   Appellate Attorneys’ Fees pursuant to Rule 9011.    Moreover,
25   Rule 9011 does not authorize this Panel to award Debtor her
26   Appellate Attorneys’ Fees.
27   ///
28   ///

                                      -17-
 1   C.   The bankruptcy court did not abuse its discretion in not
          awarding Debtor’s Appellate Attorneys’ Fees pursuant to its
 2        inherent sanctioning authority under § 105(a).
 3        Section 105(a) authorizes a bankruptcy court to “issue any
 4   order, process, or judgment that is necessary to carry out the
 5   provisions of [title 11].”   Neither the bankruptcy court nor the
 6   District Court found that the damages imposed against ASC were
 7   appropriate as § 105(a) contempt sanctions.   Even so, Debtor now
 8   asks this Panel to hold that § 105(a) authorizes Debtor’s
 9   Appellate Attorneys’ Fees.
10        In exceptional circumstances, where an appellate court first
11   determines that all other statutory or rule sources authorizing
12   damages are not “up to the task,” the court may find that awarded
13   sanctions were justified under § 105(a).   See Miller v. Cardinale
14   (In re Deville), 280 B.R. 483, 494–97 (9th Cir. BAP 2002), aff’d
15   361 F.3d 539 (9th Cir. 2004) (awarding damages as § 105(a)
16   sanctions after finding the bankruptcy court’s only other
17   potential source for awarding damages, Rule 9011, inapplicable due
18   to a failure to follow the Rule’s procedural requirements).
19   However, the prerequisites to invoking § 105(a) are not met here.
20   For example, an award pursuant to a bankruptcy court’s § 105(a)
21   power is typically not appropriate if another statute or the Rules
22   otherwise support a sanctions award.   Chambers, 501 U.S. at 50.
23   Here, as we hold above, the bankruptcy court may award Debtor her
24   Appellate Attorneys’ Fees pursuant to § 362(k).   As a result,
25   there is no reason for this Panel to consider whether sanctions
26   are somehow justified pursuant to § 105(a).
27        Also, prior to invoking § 105(a), a bankruptcy court must
28   determine that the party to be sanctioned was provided sufficient

                                     -18-
 1   notice of the potential sanctions to satisfy due process.      In re
 2   Deville, 280 B.R. at 496–97.    “Generally, the notice regarding
 3   sanctions must specify the authority for the sanction, as well as
 4   the sanctionable conduct.”    Id. at 496.     Debtor’s Sanctions Motion
 5   was based on § 362(k) only; it did not mention Rule 9011 or
 6   § 105(a).   Yet, a motion may also be sufficient to satisfy due
 7   process as to § 105(a) if it informs a party that sanctions are
 8   pursued for actions taken for “improper purposes,” and that the
 9   sanctions are sought in addition to those sought under otherwise
10   specified authority.   In re Deville, 280 B.R. at 497.     Debtor’s
11   Sanctions Motion did not assert that ASC had acted in bad faith,
12   vexatiously, wantonly, for oppressive reasons, or for other
13   improper purposes.   Because Debtor did not provide ASC with
14   sufficient notice to allow it to present objections to the
15   imposition of § 105(a) sanctions, we will not now conclude that
16   the bankruptcy court should have relied upon § 105(a) as a basis
17   for awarding Debtor her Appellate Attorneys’ Fees.
18                                VI. CONCLUSION
19        Because Debtor was forced to defend ASC’s appeal to preserve
20   the benefit of the bankruptcy court’s ruling remedying the ASC
21   stay violation and awarding her damages, Sternberg did not
22   preclude the bankruptcy court from awarding Debtor her Appellate
23   Attorneys’ Fees.   The attorney’s fees Debtor incurred on appeal
24   were a portion of Debtor’s stay-enforcement damages for purposes
25   of § 362(k) actual damages.    We therefore REVERSE the decision of
26   the bankruptcy court denying Debtor’s request for an award of
27   attorney’s fees, and REMAND this matter to the bankruptcy court
28

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 1   for further proceedings consistent with this decision.13
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          13
             ASC contends no award of Appellate Attorney’s Fees is
26   appropriate in this case because it prevailed on two of the three
     issues it raised on appeal to the District Court. Since this
27   argument implicates the amount of Debtor’s damages incurred on
     appeal, this argument is one properly made to the bankruptcy court
28   on remand.

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