In less than a week, two separate appellate courts issue rulings on a individual’s right to damages under § 362(k) for willful violations of the automatic stay:
- in the first, a debtor recovers both emotional distress damages and punitive damages (issued July 10, 2026); and
- in the second, a creditor recovers attorney fee damages (issued July 16, 2026).
This article is the first of a two-part series, summarizing the first of the two opinions: Locali Management Group, LLC v. Rodriguez (In re Rodriguez), Case No. 25-1130 (9th Cir. BAP, decided July 10, 2026).
Facts
The In re Rodriguez Debtor enters into a residential lease agreement with Landlord, and lives there with her husband and three children in Irvine, California.
Debtor stops paying rent in November 2024. Landlord files an unlawful detainer action in February 2025 and obtains a default judgment against Debtor in February 2025.
In March 2025, Sheriff gives Debtor and her family five days to leave the premises; whereupon, Debtor moves to vacate the default judgment alleging lack of service. Debtor’s motion is denied without prejudice, due to procedural defects, and Sheriff is directed to “enforce the writ of possession forthwith.”
After further efforts to stop the eviction, the trial court issues this order: “the lockout is stayed pending a ruling” on a motion Debtor filed.
Shortly after entry of the stay order, Debtor files a skeletal Chapter 13 bankruptcy petition in the Central District of California. The filing does not identify Landlord as a creditor, and Debtor does not notify either the trial court or Landlord of the bankruptcy filing.
On the day after Debtor’s bankruptcy filing, the trial court:
- denies Debtor’s motion to vacate the default judgment, finding allegations of faulty service to be contrary to evidence presented by the process server;
- terminates its lockout stay; and
- directs Sheriff to proceed with the lockout.
On the next evening, Debtor notifies Landlord and the trial court of her bankruptcy filing.
Then, Debtor files an emergency motion in the Bankruptcy Court to enforce the automatic stay, arguing:
- any effort by Landlord to evict here is subject to the automatic stay because of her continued occupancy of the residence; and
- the order terminating the lockout stay was void because it issued after Debtor’s bankruptcy filing.
On the next day, Landlord has the Sheriff proceed with evicting and locking Debtor out.
Automatic Stay Violation
Landlord argues that, because the unlawful detainer judgment and writ of possession were issued before the bankruptcy filing, the automatic stay does not apply to its eviction efforts, based on the landlord eviction exception to the automatic stay contained in § 362(b)(22).
The Bankruptcy Court determines that Landlord’s post-petition eviction efforts willfully violated the automatic bankruptcy stay because the post-petition state court ruling to lift its own stay was a substantive ruling in violation of the automatic stay and is therefore void.
The Bankruptcy Court rules that Debtor has presented evidence that Landlord acted intentionally, with knowledge of the bankruptcy, and violated the automatic stay under § 362, subjecting itself to sanctions under § 362(k).
After a subsequent hearing on damages, the Bankruptcy Court declares:
- Landlord must obtain a final, non-appealable judgment for possession prior to the bankruptcy filing in order for the stay exception in § 362(b)(22) to apply;
- the state court’s lockout stay was still in effect at the time of Debtor’s bankruptcy filing;
- the judgment for possession was not yet a final order at the time of the bankruptcy filing; and
- Landlord, therefore, willfully violated the automatic bankruptcy stay.
Damages
As a result, the Bankruptcy Court declares that Debtor is entitled to these damages:
- $754 for food;
- $513 for three days’ loss of work;
- $611 for a rental car;
- $17,478 for emotional distress (equivalent to one year’s tuition at a California state university); and
- $10,000 in punitive damages.
–Emotional Distress Damages
Explaining the basis for its award of $17,478 in emotional distress damages, the Bankruptcy Court says:
- the evidence reflects significant emotional distress experienced by Debtor from Landlord’s enforcement actions in violation of the automatic stay;
- the $17,478 amount of damages for emotional distress is calculated as one year of college tuition expenses at a California public university; and
- such calculation is proper because much of Debtor’s emotional distress stemmed from actions involving Debtor’s minor children and their educational experience.
–Punitive damages
As to punitive damages, the Bankruptcy Court finds:
- Debtor attempted to prevent the lockout by informing Landlord (by email and in person) that the automatic stay protected Debtor from eviction;
- Landlord “responded dismissively” and threatened Debtor with arrest if she failed to leave the residence by 9:00 p.m.;
- it would have been a minimal and reasonable precaution for Landlord to suspend its enforcement actions and make further inquire into the legitimacy of Debtor’s repeated assertions of legal rights;
- such precautions would have avoided the unnecessary and detrimental distress inflicted on Debtor and her family; and
- good cause exists to impose $10,000 in punitive damages under § 362(k) to deter such indifferent disregard for the rights of others.
Affirmed
The Ninth Circuit BAP affirms. Here’s why.
–State Eviction Law
Under California law, a plaintiff with a judgment for possession is entitled to the immediate issuance of a writ of possession to effectuate the defendant’s eviction. However, in this case the state court court stayed enforcement of the lockout, so that, at the time Debtor filed bankruptcy, Landlord lacked the ability to evict Debtor.
–§ 362(b)(22) Eviction Exception
11 U.S.C. § 362(b)(22) provides the following exception to the automatic stay:
- the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained before the date of the filing of the bankruptcy petition, a judgment for possession of such property against the debtor.
Both the Bankruptcy Court and the Ninth Circuit BAP find that such exception does not help Landlord in this case. Here’s why.
Whether the § 362(b)(22) eviction exception applies depends on whether Landlord had a judgment for possession before the date Debtor filed bankruptcy. In this case:
- the state court had stayed the lock-out pre-bankruptcy;
- thus, on the bankruptcy filing date, Landlord could not enforce its judgment for possession; and
- the Bankruptcy Court did not err in determining that the § 362(b)(22) automatic stay exception did not apply and that Landlord’s actions violated the automatic bankruptcy stay.
Damages
–Actual Damages
The Bankruptcy Court’s award of actual damages, including the $17,478 emotional distress damages, was not an abuse of its discretion. There is no set formula for determining damages, and a bankruptcy court, as the fact finder, has considerable discretion. And where there are two permissible views of the evidence, the fact finder’s choice between them cannot be clearly erroneous.
–Punitive Damages
A bankruptcy court has the discretion to award punitive damages “in appropriate circumstances” (§ 362(k)(1)).
In the Ninth Circuit, something more than mere willfulness is required, such as conduct that is malicious, wanton, or oppressive, or if the violator engages in “egregious, intentional misconduct.”
When reviewing the constitutionality of the amount of damages awarded, the Supreme Court instructs us to consider:
- the degree of reprehensibility of the defendant’s misconduct;
- the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and
- the difference between the punitive damages awarded and civil penalties authorized or imposed in comparable cases.
Generally, there are two underlying purposes for punitive damage awards: to punish outrageous conduct and to deter future similar conduct. And a bankruptcy court has considerable discretion in granting or denying punitive damages under § 362 (k).
Landlord argues:
- the amount of the punitive award is arbitrary because Landlord’s financial ability or whether it had previously violated the automatic stay were not considered; and
- the award is imposed under the Bankruptcy Court’s “contempt authority of § 105(a)” and was a “serious punitive sanction” violating constitutional due process.
But Landlord fails to demonstrate that the Bankruptcy Court abused its discretion in awarding punitive damages, for the following three reasons.
First, a bankruptcy court may, but is not required to, consider the finances and repetitiveness of the offender’s actions.
Second, the due process clause of the Fifth and Fourteenth Amendments prohibits “grossly excessive” punitive damages awards. Landlord did not articulate how the damages were “grossly excessive” where the bankruptcy court awarded less in punitive damages than actual damages.
Finally, the bankruptcy court awarded the punitive damages pursuant to § 362(k), not its contempt authority under § 105.
Because Debtor is an “individual” there was no need for the Bankruptcy Court to resort to its contempt authority. And a review of the record demonstrates:
- the Bankruptcy Court applied the correct legal rule, and its factual findings were not illogical, implausible, or unsupported by the record;
- the bankruptcy court properly found that Landlord displayed “indifferent disregard,” noting that “despite receiving repeated notice and having substantial experience in property management,” Landlord did not take “minimal and reasonable precaution”; and
- the Bankruptcy Court did not abuse its discretion in awarding $10,000 in punitive damages.
Conclusion
Wow!
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