David Brian Derringer

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	DAVID DERRINGER, 	No. 13-04-17330 MA
Debtor.
ORDER ON DAVID DERRINGER’S MOTION FOR ORDER TO SHOW
CAUSE AND FOR EXTREME AND PUNITIVE DAMAGES AGAINST
MICK CHAPEL, JENNIFER CHAPEL, JOSEPH MANGES, STEVEN LONG
FOR VIOLATIONS OF TITLE 11 SECTION 362(a) UNDER PROVISIONS OF
TITLE 11 SECTION 362(h); and REQUEST FOR RELIEF
On November 21, 2005 the United States Bankruptcy Appellate Panel of the Tenth
Circuit (“Bankruptcy Appellate Panel”) entered an Order and Judgment which vacated this
Court’s Order on Debtor David Derringer’s Motion for Sanctions for Violation of the Automatic
Stay (“Stay Violation Order”) (Docket #246) and remanded the matter for further proceedings.
The Court accordingly scheduled a rehearing of the Debtor David Derringer’s Motion for Order
to Show Cause and for Extreme and Punitive Damages Against Mick Chapel, Jennifer Chapel,
Joseph Manges, Steven Long for Violations of Title 11 Section 362(a) Under Provisions of Title
11 Section 362(h); and Request for Relief (“Motion”) to consider the issue of damages. 	The
Court held a hearing on the Motion on August 16, 2006 and took the matter under advisement.
After consideration of the evidence presented at the final hearing, the Court finds that actual
damages in the amount of $153.00 are warranted.
DISCUSSION
The Stay Violation Order found that by sending a Notice of Foreclosure Sale for filing in
state court proceeding number CV-02-19 prior to the expiration of the ten-day period contained
in Rule 4001(a)(3), Fed.R.Bankr.P. Mick Chapel, Jennifer Chapel, and Joseph Manges willfully
violated the automatic stay under 11 U.S.C. § 362(h). 	The Stay Violation Order awarded the
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following damages: 1) $250.00 in actual damages against Mick Chapel and Jennifer Chapel,
jointly and severally; 2) $250.00 in actual damages against Joseph Manges; and 3) $750.00 in
punitive damages against Joseph Manges. 	In vacating the Stay Violation Order, the Bankruptcy
Appellate Panel determined that no evidence was presented to the Court upon which it could
base an award for damages.
At the rehearing on the Motion, Debtor testified that in prosecuting his Motion he made
more than one trip to the University of New Mexico law library, which is a 400 mile round trip
drive, and that he believed his actual damages were $480.00, which would include some
compensation for his time, costs for gasoline, paper and ink. 	On cross examination, Debtor
confirmed that his monthly operating report for the month of July 2005 reflected gas expenses in
the amount of $135.00 and paper, ink, and mailing costs in the amount of $18.00. 	The debtor
has the burden of proving actual damages. See In re Clayton, 235 B.R. 801, 810
(Bankr.M.D.N.C. 1998) (“[T]he burden is on the debtor to demonstrate the extent of any
damages.”) (citations omitted); In re Gagliardi, 290 B.R. 808, 819 (Bankr.D.Colo. 2003) (“The
Debtors bear the burden of proving actual damages with reasonable certainty.”)(citations
omitted). 	Based on this evidence, the Court finds that the Debtor has met his burden of proving
actual damages relating to the Motion in the amount of $153.00.
Whether punitive damages should be awarded for a willful violation of the automatic stay
lies within the discretion of the Court. Clayton, 235 B.R. at 811. 	Punitive damages should be
awarded only when “the creditor has demonstrated egregious, vindictive, or intentional
misconduct.” Id. (citations omitted). Factors to consider in making this determination include
“(1) the nature of the defendant’s conduct; (2) the defendant’s ability to pay; (3) the motives of
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the defendant; and (4) provocation by the debtor.” In re Nelson, 335 B.R. 740, 754
(Bankr.D.Kan. 2004) (citing Diviney v. NationsBank (In re Diviney), 225 B.R. 762, 777 (10th Cir.
BAP 1998). 	Here, Mick Chapel, Jennifer Chapel, and Joseph Manges sent notice of the
scheduling of a foreclosure sale fewer than ten days after they obtained relief from the automatic
stay, contrary to Rule 4001(a)(3), Fed.R.Civ.P. As stated by the Court in its Stay Violation
Order, as an attorney, Joseph Manges is charged with knowledge of applicable rules. 	Given the
history of the prolonged dispute between the parties, Joseph Manges should have taken extreme
care to ensure that he complied with all applicable rules. 	He did not. Instead he aggressively
sought to schedule a foreclosure sale for the property as soon as possible following the entry of
the order granting relief from stay without first taking the care to comply with Rule 4001(a)(3),
Fed.R.Bankr.P. The Court, therefore, finds that an award of punitive damages in the amount of
$750.00 against Joseph Manges is appropriate under the circumstances in order to deter such
conduct in the future.
Debtor continues to assert that damages should be assessed against each actor
individually. 	As the act in violation of the stay was the sending of the notice by attorney Joseph
Manges on behalf of his clients Mick Chapel and Jennifer Chapel, it is not appropriate to assess
damages against each actor individually. Cf. In re Johnson, 253 B.R. 857, 861 (Bankr.S.D.Ohio
2000) (“Courts have imposed joint and several liability against creditors and their counsel for
willful stay violations.”) (citation omitted).
On appeal Mick Chapel, Jennifer Chapel and Joseph Manges asserted that their actions
did not constitute a violation of the automatic stay. The Bankruptcy Appellate Panel did not
consider this argument because it was raised for the first time on appeal, but left it to the
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discretion of this Court whether to consider this argument on remand. 	This Court likewise
declines to consider these arguments because they were not raised until after the initial hearing
on the Motion.
WHEREFORE, IT IS HEREBY ORDERED that actual damages in the amount of
$153.00 are awarded in favor of David Derringer and against Mick Chapel, Jennifer Chapel, and
their attorney, Joseph Manges, jointly and severally.
ORDERED FURTHER, that punitive damages in the amount of $750.00 are awarded in
favor of David Derringer and against attorney Joseph Manges.
____________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
COPY TO:
David Derringer
PO Box 157
Quemado, NM 87829
Joseph Manges
Attorney for Mick Chapel and Jennifer Chapel
PO Box 669
Santa Fe, NM 87504
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