Background:
- Debtors purchased a 2011 Cadillac Escalade
- Key factor in the purchase was the ability to accommodate a lift and wheelchair.
- Paid $14,000 in cash; financed $7,243.
- Agreed verbally to make bi-weekly payments to the auto sales company.
- Missed two payments before filing for bankruptcy.
- Filed Chapter 13 relief on December 8; the next payment due to the auto sale company was December 9.
- The Debtors’ counsel notified the auto sales company of the petition and that the car payment was in the Bankruptcy Plan and would be paid in full.
- Auto Sales Company repossessed the car on December 10.
- Debtors’ attorney spoke with the manager of the auto sales company advising of the bankruptcy protection, valuable items were needed from the car, a scooter and wheelchair were in the car.
- Manager refused to return the car or its contents.
- In May, the Debtors filed a 4-count complaint against the auto sales company for willful violation the automatic stay and other relief.
- Auto sales company did not appear in Court or respond to the complaint.
Court Ruling:
- Defendant (auto sale company) wrongfully repossessed the vehicle.
- Defendant’s actions constitute egregious conduct and warrants a substantial award of punitive dames.
- Further uncooperative behavior took place, the Defendant disposed of the car when the Debtors began the adversary proceeding.
- Failing to appear in Court, the Defendant exacerbated the damages to the Debtors.
- Court award: Actual damages of $23,100; attorney fees of $4,040; and punitive damages of $25K.
You cannot ignore the Court’s rules or the laws regarding bankruptcy protection.
