In re Harrison

599 B.R. 173

IN RE: Dahlia Andreen HARRISON, Debtor.

Case No.: 18-50089-KKS

United States Bankruptcy Court, N.D. Florida, Panama City Division.

Signed March 8, 2019

Dahlia Andreen Harrison, Covington, GA, pro se.

Leigh D. Hart, Tallahassee, FL, for Trustee

MEMORANDUM OPINION GRANTING DEBTOR'S SANCTIONS MOTION AND FINAL ORDER AWARDING ACTUAL AND PUNITIVE DAMAGES FOR WILLFUL VIOLATIONS OF THE AUTOMATIC STAY (DOC. 78); AND ORDER TO SHOW CAUSE WHY ADDITIONAL SANCTIONS SHOULD NOT BE IMPOSED AGAINST DELTONA'S BANKRUPTCY COUNSEL PURSUANT TO BANKRUPTCY RULE 9011

KAREN K. SPECIE, Chief U.S. Bankruptcy Judge

Before the Court is an egregious example of deliberate and continuing stay violations by a creditor and its counsel.

PROCEDURAL HISTORY

The self-represented Debtor filed the Chapter 13 petition commencing this case on March 26, 2018.¹ On June 14, 2018, Debtor filed a motion for sanctions alleging serious and continuing stay violations.² As a result, the Court entered an order to show cause ("OTSC") why creditor, The Deltona Corporation ("Deltona"), should not be held in contempt for willful violation of the stay.³ After receiving evidence, taking testimony and hearing argument at a hearing on July 16, 2018 ("OTSC Hearing"), the Court entered an interim order determining that Deltona had willfully violated the automatic stay and ordering Deltona to brief whether the Court should award damages for emotional distress and punitive damages.⁴

At the final evidentiary hearing ("Final Hearing") on August 27, 2018 the Court took testimony of the Debtor, an employee of Deltona, Dwight Worthington ("Mr. Worthington"), a Deputy Clerk of Court for Washington County, Florida, Tamara Donjuan ("Deputy Clerk Donjuan"), and a Deputy Sheriff, Landon Fries, with the Washington County Florida Sheriff's Department. The Court also received documentary and video evidence from Deltona.⁵

At the conclusion of the Final Hearing the Court announced that it would award damages, including punitive damages. The findings of fact, conclusions of law, and determination of the appropriate amounts of damages are contained in this Memorandum Opinion and Final Order.⁶

BACKGROUND

Debtor has been engaged in a years-long battle with Deltona over property in Chipley, Florida ("Chipley Property") that she claims as her homestead. At some point Debtor stopped making payments to Deltona, so Deltona filed suit to foreclose on the Chipley Property on June 18, 2015.⁷ Debtor filed the petition commencing this case one day before the Chipley Property was scheduled to be sold at foreclosure by the Clerk of Court, Washington County, Florida pursuant to a Final Judgment of Foreclosure ("FJ").⁸

This is Debtor's third bankruptcy case since October of 2016. Debtor filed two prior bankruptcy cases in the Northern District of Georgia; the first on October 21, 2016 and the second on July 26, 2017.⁹

Debtor's first case ("First Georgia Case") was dismissed on February 2, 2017 (more than twelve (12) months prior to the instant case),¹⁰ and her second case ("Second Georgia Case") was dismissed on December 7, 2017.¹¹ In both Georgia cases, Debtor filed Chapter 13 plans and made plan payments.¹² Neither of Debtor's Georgia cases was dismissed because Debtor failed to obey court orders or file required documents.

Debtor's first two cases stayed hearings on Deltona's motion for summary judgment in the foreclosure case. Deltona obtained its FJ after Debtor's Second Georgia Case was dismissed.¹³ But for Deltona's and its state and bankruptcy counsel's actions, the petition commencing the current case should have stayed the foreclosure sale.

On the same day that she filed the petition commencing this case Debtor filed a motion to extend the automatic stay which the Court set for hearing on April 12, 2018.¹⁴ Deltona's bankruptcy counsel filed an objection to the motion to extend stay on April 10, 2018 and argued against the motion at the April 12 hearing. Based on Debtor's testimony at that hearing the Court overruled Deltona's objection and entered an order extending the stay for an additional sixty (60) days.¹⁵

Debtor filed a Chapter 13 plan on April 20, 2018.¹⁶ From that date through June 14, 2018, when Debtor filed the Sanctions Motion, the record activity in this case was routine.

In response to the Sanctions Motion and OTSC, Deltona conceded that it violated the stay by continuing with the foreclosure sale. Its bankruptcy counsel argued that this stay violation was not willful and should not be sanctioned because Deltona's state court attorney made a mistake of law.¹⁷ Neither Deltona nor its bankruptcy counsel took any action at this time to vacate the foreclosure sale.

A. Deltona's stay violations.

Immediately after filing this case Debtor drove from Tallahassee to Washington County, Florida, where she delivered copies of her Chapter 13 petition to Deltona's state court counsel and the Washington County Clerk of Court,¹⁸ and advised them verbally and via email that she had filed this case and that the automatic stay was in place.¹⁹

1. The foreclosure sale.

The next day, March 27, 2018, Debtor waited in the lobby of the Washington County Clerk's office before the scheduled foreclosure sale where she tried, to no avail, to convince Deputy Clerk Donjuan to cancel the sale. Deputy Clerk Donjuan told Debtor that she had to bring the issue to the attention of the presiding judge, so Debtor went to the Circuit Judge's chambers. Meanwhile, Deltona's state court counsel convinced the Washington County Clerk of Court to disregard Debtor's urgings that the sale was stayed, so the Clerk conducted the sale in Debtor's absence. Deltona was the "successful" and only bidder. Debtor testified that when she returned to the Clerk's office and was told the sale had taken place she sat there and cried because she believed she had done all she could to stop the sale.²⁰

Deltona called Deputy Clerk Donjuan to testify on its behalf at the Final Hearing. In describing her interactions with Debtor, Deputy Clerk Donjuan: did not deny, but could not recall, telling Debtor to go to the presiding judge's chambers to try to stop the sale; conceded that Debtor was upset but did not recall Debtor crying; and admitted that after the foreclosure sale Debtor repeatedly declared that it was not right that the Clerk went through with foreclosure.

In an apparent attempt to discredit some of Debtor's testimony, Deltona introduced into evidence and played a portion of the security camera video of the Washington County Clerk of Court's lobby before, during, and after the foreclosure sale.²¹ That video shows:

Debtor enters the Clerk's office lobby before the scheduled time for the foreclosure sale, walks over to Deputy Clerk Donjuan, and shows her some documents.²² After roughly one minute of conversation, Deputy Clerk Donjuan exits the room. During Deputy Clerk Donjuan's absence, Debtor is shaking her head, pacing constantly, and peering out of the window.²³ Debtor then exits the lobby.²⁴ Approximately two minutes later Deputy Clerk Donjuan returns, then leaves the lobby again, and returns.²⁵ The sale then occurs with Debtor not present. Debtor returns to the Clerk's office lobby after the sale, and speaks with and shows documents to Deputy Clerk Donjuan.²⁶ Deputy Clerk Donjuan then exits for the final time.²⁷ At this point, Debtor is visibly upset: throwing her head back, shaking her head, walking in circles around the lobby, and appearing to try to speak to a Clerk's Office employee seated in a bank teller style window.²⁸

2. Deltona's continuous possession of, and actions to prevent Debtor from accessing, the Chipley Property for approximately ninety-four (94) days post-petition.

Ten (10) days after the foreclosure sale the Washington County Clerk of Court issued a certificate of title to the Chipley Property to Deltona. On the same day, Deltona's bankruptcy counsel filed their first Notice of Appearance in this case.²⁹ Deltona then had its employee change the locks and put up "no trespassing" signs on the home. Meanwhile, Debtor continued contacting Deltona's bankruptcy counsel, complaining about the sale in violation of the stay.

Debtor remained locked out of the Chipley Property from March 27 through June 29, 2018. This lockout ended the day after the initial OTSC Hearing at which Deltona and its bankruptcy counsel finally admitted in open court that Debtor had no access to the Chipley Property and agreed to give her a set of keys.

3. Damage to the Chipley Property.

Deltona turned off the utilities after evicting a third-party tenant and left the Chipley Property vacant and without air conditioning for a considerable period. After Deltona admitted to the stay violations and gave Debtor access to the Chipley Property, Debtor traveled to the Chipley Property often, sleeping in her car or staying with a friend or relative.³⁰ Upon assessing the damage, which she testified was extensive, Debtor began repairs including painting and replacing flooring.³¹

Deltona called Mr. Worthington, denominated as its "man on the ground," to testify on its behalf. After the foreclosure sale, Mr. Worthington went to the Chipley Property, drilled out the lock and deadbolt, and placed a new handle set on the front door. He testified that the front door to the house and the garage door were damaged.³²

4. Deltona's harassment and stalking of Debtor.

Debtor testified that during her trips to the Chipley Property she saw Mr. Worthington drive by numerous times. On cross-examination Debtor asked Mr. Worthington if he had been "stalking" her. Visibly displeased with that question, Mr. Worthington insisted that he had never "stalked" Debtor. But, on further questioning Mr. Worthington admitted that even after Deltona gave Debtor access to the Chipley Property in late June, at Deltona's request he went by on numerous occasions to see if the house was being disturbed and to note if anyone was there. This testimony is consistent with testimony given by Tracy...