Eric Wayne Colgan and Chrystal Michelle Colgan

In re
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF WYOMING
)
)
ERIC WAYNE COLGAN and
CHRYSTAL MICHELLE COLGAN,
) 	Case No. 08-20215
) 	CHAPTER 7
)
Debtors. 	)
SANCTIONS FOR VIOLATION OF THE AUTOMATIC STAY
This matter came before the court on October 6, 2008 by video conference
regarding the sanctions on debtors' Motion for Order to Show Cause and/or Contempt
Citation involving Money Now. Chrystal Colgan ("co-debtor") attended and was
represented by Stephen R. Winship and Money Now, was represented by Chet Heil, pro
se. Eric Colgan ("Debtor") did not attend. The court, having reviewed the file and
evidence, accepting the offer of proof by the co-debtor for damages incurred, to which
Money Now did not object, and considering the arguments of the parties, is prepared to
rule.
Discussion
The co-debtor's damages include:
(1) 	Bank overdraft fees of $22.00;
(2) 	Co-debtor's lost wages for two (2) hours at the rate of$l3.00 per hour that
the co-debtor incurred while dealing with the contempt matter; and,
(3) 	Attorney fees submitted in the amount of$1,539.08 including an estimated
time of one (1) hour for the hearing of October 6, 2008.
Once the court determines that a willful violation occurred and the debtor suffered
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injury due to that violation, 11 U.S.C. 362(k) mandates an award of "actual damages,
including costs and attorneys' fees, and in appropriate circumstances, may recover
punitive damages." The court entered its Decision Regarding Motion for Order to Show
Cause and/or Contempt Citation on August 5, 2008 holding that Money Now willfully
violated the automatic stay when it refused to turnover the funds. 	This hearing was to
determine the amount of damages.
Bank overdraft fee
The co-debtor requests $22.00 as part of the damages incurred by Money Now's
violation of the automatic stay. This expense was incurred by the co-debtor upon Money
Now presenting the check to the bank. This court analyzed and specifically determined
that Money Now did not violate the automatic stay by its action of presenting the Co-
debtor's check to the bank. Debtor is not entitled to an award of the bank overdraft fee of
$22.00 as this is not damages actually incurred by Money Now's violation of the
automatic stay.
Lost wages
The Co-debtor incurred a loss of two hours of wages in dealing with the
consequences of Money Now's violation of the automatic stay. The offer of proof,
accepted by the court, stated that the co-debtor is paid $13.00 per hour. Co-debtor is
entitled to an award of actual damages for lost wages of two hours at $13.00 per hour for
a total of $26.00.
Attorney fees
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Co-debtor offered a billing statement for services incurred in the contempt action
involving Money Now in the amount of $1 ,526.25 for attorney fees and expenses of
$12.83, for a total of$1,539.08. The statement includes an estimated time of one (1) hour
for the attorney's representation of the co-debtor at the hearing on October 6, 2008. The
hearing lasted fifteen minutes. The billing statement is adjusted to accurately reflect this
modification. Co-debtor is entitled to an award of actual damages of attorney fees and
costs of: $1,387.50 and $12.83, respectively, for a total of$I,400.33.
Punitive Damages
Punitive damages may be awarded to the injured party, "in appropriate
circumstances. There are two standards courts use for determining the "appropriate
circumstances" for the award of punitive damages. The first standard allows the debtor to
recover punitive damages when the creditor acted with actual knowledge that he was
violating the federally protected right or with reckless disregard of whether he was doing
so. Money Now argued that it knew that the debtors' bankruptcy petition had been filed.
However, it is not apparent to the court that Mr. Heil was aware of the meaning of
federally protect rights of the automatic stay or that he recklessly disregarded the stay.
Money Now's statements showed a general confusion and lack of understanding. The
second standard requires the court to consider four factors: (1) the nature of the
defendant's conduct; (2) the defendant's ability to pay; (3) the defendant's motives; and
(4) any provocation by the debtor As stated, Money Now's conduct showed a lack of
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understanding of the protections afforded by the automatic stay. There was no
information regarding Money Now's ability to pay. Money Now's motives were based
upon ignorance of bankruptcy law and the risk that the creditor took when it made its own
determination of what the stay means. The co-debtor's behavior of obtaining a loan three
days prior to filing for bankruptcy protection and post-dating the check to a date after the
bankruptcy was filed is also taken into consideration. Based upon the circumstances,
punitive damages are not appropriate.
IT IS ORDERED that Money Now shall pay the Co-debtor:
(a) 	for lost wages, the amount of $26.00; and
(b) 	for attorney fees and costs, the amount of$1,400.33;
for a total amount of$1,426.33, to be paid by money order, cashier check and
mailed to Stephen Winship, P.O. Box 548, Casper, WY 82602-0548, on or before
November 14,2008.
DATED this g 	day of October, 2008.
By the Court
Service to:
Stephen Winship
Chet HeillMoney Now
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