Fernandez v. Chang
Filing
7
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 8/4/14. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
IN RE: MIRKO FERNANDEZ
:
_________________________________
:
MIRKO FERNANDEZ
Appellant
:
v.
:
Civil Action No. DKC 14-1785
:
SANDY Y. CHANG
Appellee
:
MEMORANDUM OPINION
Pending before the court is an appeal by Appellant Mirko
Fernandez
from
an
order
entered
by
United
States
Bankruptcy
Judge Paul Mannes on April 2, 2014 denying additional attorney’s
fees on Appellant’s motion for sanctions for violation of the
automatic stay and awarding only a portion of the fee requested
for a deposition.
Because the facts and legal arguments are
adequately presented in the briefs and record, oral argument is
deemed unnecessary.
See Fed.R.Bankr.P. 8012; Local Rule 105.6.
For the reasons that follow, the rulings of the bankruptcy court
will be affirmed.
I.
Background
Appellee
counsel.
Sandy
Fernandez
Chang
was
accused
Fernandez’s
Chang
of
former
attorney
bankruptcy
negligence
in
prosecuting his bankruptcy and requested return of the fees he
paid her.
On May 13, 2013, following a hearing, Judge Mannes
found that Chang committed willful violations of 11 U.S.C. §
362(a)(6), which stays any act to collect, assess, or recover a
claim against a debtor that arose before commencement of the
bankruptcy case.
Furthermore, Chang failed to file any motion
to avoid the judicial liens that existed on Fernandez’s real
property.
Judge Mannes found that the $2,525.00 in compensation
paid by Fernandez to Chang exceeded the reasonable value of
Chang’s
service
and
found
that
Fernandez
was
entitled
refund of $2,350.00 pursuant to 11 U.S.C. § 329.
to
a
The order
permitted Fernandez to pursue other claims against Chang for
violations of the automatic stay.
The order was silent on the
matter of attorney’s fees and costs incurred in the prosecution
of this disgorgement motion.
On
June
violations
punitive
of
25,
2013,
the
(ECF No. 4-4).
automatic
damages
of
Fernandez
moved
6,
2014,
including
actual
all
reasonable
legal
$25,000,
Judge
sanctions
stay,
Mannes
granted
for
damages,
fees
and
(ECF No. 4-5).
expenses, and any other further relief.
January
for
On
the
motion.
memorandum of decision and order, he wrote:
The court is faced with the issue of
sanctions to be imposed. To be fair to all
of her [Chang’s] Chapter 7 debtor clients,
one would have to conduct a class action.
The
fee
received
by
her
from
Debtor
[Fernandez] for the most part has been
disgorged.
While Debtor pleaded that he
suffered emotional distress as a result of
2
In
the
Ms. Chang’s misconduct, there was nothing
presented in support of that claim.
In
allowing punitive damages, the court must
temper its ruling by the fact that many
other debtors are similarly situated and
that Ms. Chang is suspended from the
practice of law, and restoration of her
right to practice is not automatic.
The court will allow compensatory damages of
$3,500.00 and punitive damages of $1,750.00.
(ECF No. 4-6, at 3).
The order did not explicitly state that
the $3,500 included attorney’s fees.
On January 27, 2014, Fernandez moved for attorney’s fees of
$7,525.00 pursuant to 11 U.S.C. § 362(k)(1) and Local Bankruptcy
Rule
7054-2
in
connection
with
his
violation of the automatic stay.
motion
for
sanctions
in
Chang opposed the motion,
arguing that Judge Mannes appeared already to award attorney’s
fees
in
damages
the
$3,500
considering
figure
as
there
Fernandez’s
were
no
attorney’s
other
fees
apparent
had
been
disgorged and there was no evidence of the claimed emotional
distress.
(ECF No. 4-10).
A hearing was held on March 20,
2014, and Judge Mannes denied Fernandez’s motion on April 2.
First
referring
back
to
his
original
sanctions
decision,
wrote that
[b]ased on the evidence before it and the
paucity of a showing of any special damages,
the court allowed compensatory damages of
$3,500.00 and punitive damages of $1,750.00.
This
award
seemed
proportional
to
the
3
he
minimal damages incurred.
The
Motion and Bill of Costs followed.
subject
The court finds it is inappropriate to allow
additional fees for these filings and,
therefore, the Motion for Attorney Fees is
denied.
(ECF No. 4-15, at 2).
Also adjudicated in this decision was Fernandez’s Bill of
Costs.
Of relevance to this case, he sought $480.87 for a
deposition
transcript.
In
his
cost
detail,
Fernandez
represented that Chang was deposed in connection with two cases:
Fernandez and Labrador.
Fernandez requested that one-half of
the deposition transcript’s cost ($480.87) be taxed for this
case.
(ECF No. 4-7).
Chang opposed this amount, stating that
the transcript illustrates that the portion pertaining to the
Fernandez
case
only
consumed
twenty-five
(25)
transcript’s 239 pages, much less than one-half.
page, Fernandez should be awarded $88.75.
of
the
At $3.55 per
(ECF No. 4-9).
Judge
Mannes did not award Fernandez all the money sought: “[i]t is
true that of the 241 pages of testimony, the questioning as to
the
Debtor
began
on
page
216.
However,
in
reviewing
the
deposition much of the first part was helpful to the Debtor and
enabled the second part to move swiftly.
The court will allow
as costs $160.29 or one-third of the total.”
2).
4
(ECF No. 4-15, at
On April 16, 2014, Fernandez filed an appeal of this order
and filed his brief on June 19.
(ECF No. 4).
Chang filed an
opposition on July 10 (ECF No. 5), to which Fernandez replied on
July 24 (ECF No. 6).
II.
Standard of Review
When
reviewing
a
bankruptcy
court’s
district court acts as an appellate court.
conclusions
are
reviewed
reviewed for clear error.
de
novo
and
final
order,
the
Accordingly, legal
findings
of
fact
are
In re Official Comm. of Unsecured for
Dornier Aviation (N. Am.), Inc., 453 F.3d 225, 231 (4th Cir.
2006).
“A court’s calculation of damages is a finding of fact
and therefore is reviewable only for clear error, but to the
extent those calculations were influenced by legal error, review
is
de novo.”
Universal Furniture Int’l, Inc. v. Collezione
Europa USA, Inc., 618 F.3d 417, 427 (4th Cir. 2010).
A finding
of fact is “clearly erroneous” when “although there is evidence
to support it, the reviewing court on the entire evidence is
left with the definite and firm conviction that a mistake has
been committed.”
United States v. United States Gypsum Co., 333
U.S. 364, 395 (1948).
III. Analysis
11 U.S.C. § 362(k)(1) provides that “an individual injured
by any willful violation of a stay provided by this section
5
shall
recover
actual
damages,
including
costs
and
attorneys’
fees, and, in appropriate circumstances, may recover punitive
damages.”
Fernandez contends that the language is clear: “shall
recover” means that where there is a willful violation that
results in injury, the injured individual is entitled to actual
damages, including attorney’s fees.
He cites numerous cases
from around the country in support.
In her opposition, Chang
does
not
take
issue
with
this
principle,
but
contends
that
attorney’s fees were in fact awarded by Judge Mannes as part of
the
$3,500
position
by
compensatory
a
process
damage
of
award.
elimination.
She
If,
comes
as
to
Judge
this
Mannes
found, the fees paid to Chang had already been disgorged, and
there was no evidence of emotional damages, the $3,500 figure
had to represent attorney’s fees because there were no other
evident damages.
differently,
Not surprisingly, Fernandez views the matter
contending
that
Judge
Mannes
improperly
did
not
include attorney’s fees in the $3,500 figure and then failed to
rectify
his
error
by
denying
Fernandez’s
subsequent
motion
seeking attorney’s fees.
There is much support for Chang’s interpretation of the
proceedings.
The
most
sensible
reading
of
the
phrase
“compensatory damages of $3,500,” is that it includes attorney’s
fees given the lack of any other damages suffered.
6
This view is
bolstered by Judge Mannes’s subsequent opinion, where he wrote
that
the
$3,500
amount
damages incurred.”
“seemed
proportional
to
the
minimal
Judge Mannes also wrote, in regard to the
later motion, that “[t]he court finds it is inappropriate to
allow additional fees for these filings.”
(Emphasis added).
The
Judge
best
reading
of
this
language
is
that
Mannes
already awarded attorney’s fees as part of the $3,500.
typically
separate
attorney’s
fees,
the
the
concepts
latter
of
falls
compensatory
within
the
had
While we
damages
scope
from
of
the
former, as Fernandez is damaged by the amount he had to pay his
counsel to prosecute Chang’s willful violation of the automatic
stay.
Consequently, the appropriate review is whether Judge
Mannes’s damage calculation is clearly erroneous.
Fernandez
merely
asked
expenses
in
an
amount
provided
no
supporting
for
to
“all
be
reasonable
determined
documentation,
by
Given that
legal
the
fees
and
Court,”
and
Judge
Mannes’s
Judge
Mannes
damages
award was not clearly erroneous.
Finally,
Fernandez
contends
that
erred
in
awarding just $160.29 as reimbursement toward the cost of the
deposition transcript.
He argues that when Judge Mannes wrote
that he was awarding “one-third of the total,” he meant the
total amount invoiced for the combined deposition, $961.74.
in
making
his
one-third
calculation,
7
he
used
But
Fernandez’s
original request of $480.87, failing to note that Fernandez had
only applied for one-half of the total cost.
Consequently, he
erroneously applied his one-third award to fifty percent of the
total, instead of the entire amount, resulting in a clear error
in
the
amount
of
$160.29.
Chang
argues
that
a
reasonable
interpretation of the word “total” in this context could refer
to the total sought by Fernandez and, additionally, $160.29 is a
reasonable reimbursement for a deposition of which only twentyfive pages of 241 were dedicated to this case.
Once again, Chang’s arguments are supported by the record.
The
phrase
“one-third
of
the
total”
can
be
reasonably
interpreted to mean one-third of the amount sought by Fernandez.
And, in any event, if Judge Mannes made no attempt to justify
his award in terms of fractions and merely awarded $160.29, that
would
not
be
clearly
erroneous
given
the
amount
of
the
deposition dedicated to this case.
IV.
Conclusion
For
against
the
foregoing
Appellant
will
reasons,
be
the
affirmed.
bankruptcy
A
court’s
separate
order
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
8
order
will
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