Singh v. Lee et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
STACEY LYNN SINGH, 	No. 11-11079
Debtor(s).
______________________________________/
STACEY LYNN SINGH,
Plaintiff(s),
v. 	A.P. No. 11-1172
JILMMY L. LEE, et al.,
Defendant(s).
_______________________________________/
Memorandum After Trial
_________________
Prior to the bankruptcy of Chapter 7 debtor and plaintiff Stacey Singh, defendant Jimmy Lee
obtained a state court judgment against Singh and assigned it for collection to defendant Creditors
Trade Association, which garnished Singh’s wages. When Singh filed her bankruptcy petition on
March 27, 2011, CTA terminated the garnishment.
When the bankruptcy was filed, a discovery motion was pending in state court against Singh.
On May 24, 2011, in the absence of appearance by either side, the court granted the motion and
awarded $640 in sanctions against Singh. On June 2, 2011, an employee of CTA mailed a copy of the
state court order on Singh. CTA acknowledges that this was done by mistake and that it violated the
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Entered on Docket
January 06, 2012
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 11-01172 Doc# 11 Filed: 01/06/12 Entered: 01/06/12 13:58:11 Page 1 of 3

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automatic stay of § 362 of the Bankruptcy Code. Section 362(k)(1) of the Code gives an individual
debtor a private right of action for violating the automatic stay.
On June 15, 2011, Singh’s counsel commenced this adversary proceeding. He made no attempt
to contact CTA’s counsel before doing so. On the same date, he filed a motion in state court seeking
sanctions against CTA for violating the automatic stay. On August 2, 2011, the state court noted that
its prior order had been amended to exclude Singh and awarded Singh $640 in sanctions.
There is no doubt that by mistake CTA violated the automatic stay and that the violation caused
Singh some anguish. However, the court did not understand why her counsel did not attempt to
resolve the matter with a phone call to CTA’s counsel or, if litigation was called for, why he did not
seek the immediate injunctive relief which this court routinely grants. Under questioning by the court,
Singh’s counsel admitted that there are other defendants in the state court proceeding whom he also
represents, and that it was in their best interest to bring the matter before the state court in order to
paint CTA in an unfavorable light as being overly aggressive in its collection tactics.
Singh argues that she is entitled to recover damages for mental anguish suffered for some time
after the mistaken service. However, it is clear that if she suffered anguish for any period of time
beyond a day or two it was because her counsel made a decision to prolong any uncertainty due to his
desire to benefit his other clients. Setting aside the ethical problems with this decision, Singh cannot
claim damages for anguish caused by her own counsel’s decision.
There is certainly an argument that the state court’s decision precludes this action; pursuant to
28 U.S.C. § 1334(b), the federal courts have original but not exclusive jurisdiction over cases arising
under the Bankruptcy Code. However, given the small amounts involved the court will treat the state
court sanction which CTA paid to be a credit and not a bar.
The court finds that the action by CTA’s employee, while a mistake, was an intentional act
taken by a creditor with knowledge of the automatic stay. The act caused some mental anguish to
Singh which could have been quickly eased by her counsel, who elected not to do so for improper
reasons. The court fixes Singh’s damages at $1,200 and deducts the $640 paid pursuant to the state
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Case: 11-01172 Doc# 11 Filed: 01/06/12 Entered: 01/06/12 13:58:11 Page 2 of 3

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court order. Singh has not proved entitlement to any other damages or attorneys’ fees. Accordingly,
she shall have judgment in the amount of $560. Each side shall bear its own costs.
Counsel for CTA shall submit an appropriate form of judgment forthwith. The Clerk shall send
a copy of this Memorandum to the Honorable Mark Tansil, Judge of the Sonoma County Superior
Court .
Dated: January 6, 2012
SAlan Jaroslovsky
U.S. Bankruptcy Judge
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Case: 11-01172 Doc# 11 Filed: 01/06/12 Entered: 01/06/12 13:58:11 Page 3 of 3