Julie Noel Chappell

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
JULIE NOEL CHAPPELL
DEBTOR
CASE NO.
04-04230-5-ATS
ORDER AWARDING SANCTIONS
The matter before the court is the motion filed by the chapter 7
debtor, Julie Noel Chappell, seeking sanctions against Verizon Wireless
for violations of the automatic stay. A hearing took place in Raleigh,
North Carolina on June 8, 2005.
Julie Noel Chappell filed a petition for relief under chapter 7
of the Bankruptcy Code on November 22, 2004, and received her discharge
on February 23, 2005. The debtor’s schedule of creditors listed
Verizon Wireless as an unsecured creditor with a claim of $600. Ms.
Chappell believes her Verizon Wireless service was terminated
prepetition, and in any event she contends that she rejected the
wireless contract by failing to assume it within 60 days of filing her
petition. On December 26, 2004, after the notice of the debtor’s case
was sent to all creditors, Verizon sent Ms. Chappell a written demand
for payment and a notice of possible fees for early termination. On
January 7, 2005, a representative of Verizon called Ms. Chappell and
demanded payment; Ms. Chappell advised Verizon of the bankruptcy filing
and requested that Verizon direct any further calls to her attorney.
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On January 9, 2005, Verizon sent another statement to Ms. Chappell. On
January 12, 2005, Verizon sent a letter to Ms. Chappell stating that
services had been terminated for lack of payment, demanding payment for
prior charges, and warning of reference to a collection agency. Also
on January 12, 2005, Verizon sent a billing statement assessing
additional fees for early termination. On February 2, 2005, Ms.
Chappell was contacted by a collection agency on behalf of Verizon.
Counsel for the debtor sent Verizon Wireless a letter on February
17, 2005, informing it that Ms. Chappell had filed a bankruptcy
petition and that the bills and telephone calls violated the automatic
stay and the discharge injunction. On March 1, 2005, Verizon sent the
debtor a letter acknowledging the chapter 7 filing and instructing Ms.
Chappell to reaffirm or reject her contract. Verizon then sent Ms.
Chappell another billing statement on March 12, 2005, prompting the
debtor to file a motion for sanctions against Verizon Wireless on May
4, 2005.
Verizon Wireless did not respond to the debtor’s motion and did
not appear at the hearing. Counsel for the debtor notified Verizon of
its violation of the automatic stay and gave it an opportunity to cure
the violation before seeking monetary sanctions against it under 11
U.S.C. § 362(h). E.D.N.C. LBR 9029-1(b). Verizon Wireless disregarded
the letter from counsel for the debtor, ignored the automatic stay, and
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neither responded to the debtor’s motion nor attended the hearing to
offer an explanation of its behavior.
Clearly, the demand letters and telephone calls violate the
automatic stay, and Verizon’s written acknowledgment of the bankruptcy
filing demonstrates that the violations were willful. "The automatic
stay serves a crucial function in any bankruptcy case and willful
violations under § 362(h) are serious matters warranting the mandatory
imposition of sanctions that Congress has proscribed." In re Brock
Utilities & Grading, Inc., 185 B.R. 719, 720 (Bankr. E.D.N.C. 1995).
Verizon’s actions have caused Ms. Chappell distress, and she has
incurred attorney’s fees of $500 to bring this motion before the court.
Verizon’s cavalier attitude toward the automatic stay is
unacceptable, and monetary sanctions are clearly needed to get this
creditor’s attention. See In re Chavis, 213 B.R. 462 (Bankr. E.D.N.C.
1997) (imposing sanctions of $10,000 against Wake Medical Center for
violations of automatic stay). An appropriate sanction in this case is
$500 plus reimbursement of attorney’s fees of $500. NO LATER THAN
10 DAYS FROM THE DATE OF THIS ORDER, VERIZON WIRELESS SHALL PAY $500 IN
ATTORNEY’S FEES TO MICHAEL RYAN DYSON, COUNSEL FOR THE DEBTOR, AT 8520
SIX FORKS ROAD, SUITE 101, RALEIGH, NORTH CAROLINA 27615. NO LATER
THAN 10 DAYS FROM THE DATE OF THIS ORDER, VERIZON WIRELESS SHALL PAY
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$500 IN SANCTIONS TO THE DEBTOR, JULIE NOEL CHAPPELL, AT 10523
HALESWORTH DRIVE, CARY, NORTH CAROLINA 27511.
SO ORDERED.
DATED: June 9, 2005
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