Opinion
BAP No. CC-08-1274-DLPa. Bk. No. ND 08-10045-RR. Adv. No. ND 08-01007-RR.
4-17-2009
In re: SERGIO CASTRO and TERESA CASTRO, Debtors. TRAVIS FARNSWORTH dba Judicial Revenue Service, Appellant, v. SERGIO CASTRO; TERESA CASTRO, Appellees.
MEMORANDUM
This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1.
The bankruptcy court entered judgment in favor of chapter 7 debtors, holding that a judgment creditor willfully violated the automatic stay when he failed to return to the debtors two vehicles on which he had levied prepetition. On appeal, the judgment creditor asserts (1) that the debtors were not entitled to the protection of the automatic stay where they had commenced their case without complying with the credit counseling requirements of 11 U.S.C. § 109(h), and where the bankruptcy court had dismissed the underlying bankruptcy case on that basis; and (2) that chapter 7 debtors have no standing to pursue damages for an alleged violation of the automatic stay because the judgment creditor had no obligation under § 542 to turn the vehicles over to chapter 7 debtors. We AFFIRM the bankruptcy court's finding that the judgment creditor willfully violated the automatic stay, but we REVERSE the bankruptcy court's damages award to the debtors as a matter of law.
Unless otherwise indicated, all chapter, section and rule references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
I. FACTS
Appellant, Travis Farnsworth dba Judicial Revenue Service ("Mr. Farnsworth"), is the assignee of a judgment in the amount of $197,103.92 entered August 17, 2006, against Appellees, Sergio and Teresa Castro ("the Castros"), in the Superior Court of California, County of Ventura ("State Court Judgment"). On December 10, 2007, pursuant to a writ of execution, the Ventura County Sheriff's Department ("Sheriff") levied on and impounded two vehicles owned by the Castros. The vehicles were scheduled to be sold at a Sheriff's auction on January 11, 2008.
To prevent the auction sale of their vehicles, the Castros filed a voluntary chapter 7 petition on January 10, 2008 ("Petition Date"). Prior to filing this bankruptcy case ("First Case"), the Castros did not receive the credit counseling briefing mandated by § 109(h).
On the Petition Date, the Castros' bankruptcy counsel faxed a notice of the bankruptcy filing ("Bankruptcy Notice") both to the Sheriff and to Mr. Farnsworth. The Bankruptcy Notice proved sufficient to stop the January 11, 2008 auction sale. Mr. Farnsworth admits having received the Bankruptcy Notice.
On January 16, 2008, the Castros' bankruptcy counsel left Mr. Farnsworth a voice mail message demanding that the vehicles be returned to the Castros. On January 18, 2008, the Castros filed their Schedules B and C in the bankruptcy case, through which they asserted a claim of exemption in the full value of the vehicles. Mr. Farnsworth did not return the vehicles to the Castros as requested. Instead, on January 22, 2008, he sent a letter to the chapter 7 trustee ("First Case Trustee") asking for direction on how to proceed with the custody of the vehicles. On February 5, 2008, having had no response to this letter, Mr. Farnsworth called the First Case Trustee, who advised Mr. Farnsworth that he did not intend to make a decision regarding the vehicles until after the § 341(a) Meeting of Creditors set for February 18, 2008. Based upon this response, Mr. Farnsworth did not turn over the vehicles to the First Case Trustee, nor did he return the vehicles to the Castros.
On January 17, 2008, the Castros initiated an adversary proceeding against Mr. Farnsworth, seeking damages, punitive damages, and attorneys fees and costs, based upon Mr. Farnsworth's refusal to release the vehicles to them, which they alleged constituted a willful violation of the automatic stay provided by § 362(a). Upon his receipt of the summons and complaint in the adversary proceeding, Mr. Farnsworth wrote to the Castros' bankruptcy counsel demanding that the complaint be dismissed no later than February 6, 2008. He argued that the adversary proceeding should be dismissed because (1) the Castros' bankruptcy petition was "void" where it had been filed without compliance with § 109(h), and (2) his obligation was to turn the vehicles over not to the Castros, but to the chapter 7 trustee, and the trustee, in effect, had excused such turnover pending the conclusion of the § 341(a) Meeting of Creditors scheduled for February 18, 2008.
The Castros' First Case was dismissed February 7, 2008, following a hearing on the bankruptcy court's order to show cause, on the basis that the Castros were not eligible to be debtors pursuant to § 109(h) because they did not obtain credit counseling prior to filing their bankruptcy petition. On February 7, 2008, Mr. Farnsworth again wrote to the Castros' bankruptcy counsel, expressing his assumption that, in light of the dismissal of the underlying bankruptcy case, the adversary proceeding would be dismissed, and he would not need to file an answer to the complaint.
The next day, February 8, 2008, the Castros filed a new chapter 7 petition ("Second Case"). Mr. Farnsworth immediately wrote to the chapter 7 trustee in the Second Case ("Second Case Trustee"), seeking direction with respect to the vehicles. This time he phrased his request somewhat differently:
Pursuant to 11 USC 542(a), I am required to turn over the property of the estate to you as the Trustee. Please advise as to what you would like me to do with this property. With your written permission, I would prefer to release the vehicles from levy into either your custody or into custody of the debtors as the cost of storage is increasing.
In her response dated February 11, 2008, the Second Case Trustee advised Mr. Farnsworth that she claimed no interest in possession of the vehicles, and that she had no objection to releasing the vehicles to the Castros. The vehicles were released to the Castros on February 11, 2008. Ultimately, the Second Case was dismissed May 21, 2008, based upon the Castros' failure to attend the § 341(a) Meeting of Creditors in the Second Case.
The Castros failed to appear both at the initial § 341(a) Meeting on March 17, 2008, and at the continued § 341(a) Meeting on April 7, 2008.
On February 18, 2008, Mr. Farnsworth filed a motion to dismiss the complaint ("Dismissal Motion") on the grounds (1) that the Castros lacked standing and capacity to prosecute the action because they were ineligible to be debtors both on the Petition Date and on the date the complaint was filed, (2) that the petition filed January 10, 2008 did not invoke the automatic stay, and (3) that any obligation he had to turn over the vehicles was to the First Case Trustee, not to the Castros, pursuant to § 542(a). The Dismissal Motion was denied, and the complaint proceeded to trial on September 30, 2008.
After receiving the evidence and hearing the parties' arguments, the bankruptcy court ruled that Mr. Farnworth's failure to return the vehicles to the Castros within a reasonable time after the Petition Date constituted a willful violation of the automatic stay. The bankruptcy court established the outside date for a "reasonable time" to return the vehicles as the date the Castros claimed an exemption in the full value of the vehicles. As damages, the bankruptcy court awarded the Castros $750.00, which represented the approximate amount Mr. Castro paid to rent a vehicle between the date the exemption claim was filed with the bankruptcy court and the date the vehicles were returned to the Castros, and their attorneys' fees, which the parties agreed were $5,000.00. Mr. Farnsworth timely appealed the judgment entered October 15, 2008.
II. JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (O). We have jurisdiction under 28 U.S.C. § 158.
III. ISSUES
1) Whether the bankruptcy court erred when it determined that Mr. Farnsworth's failure to return the vehicles to the Castros in the First Case constituted a willful violation of the automatic stay.
2) If we conclude the bankruptcy court did not err in that determination, whether the Castros were entitled to an award of damages, including attorneys' fees, for Mr. Farnsworth's willful violation of the automatic stay.
IV. STANDARDS OF REVIEW
"We review de novo whether the automatic stay provision of § 362(a) has been violated." Cal. Employment Dev. Dep't v. Taxel (In re Del Mission Ltd.), 98 F.3d 1147, 1150 (9th Cir. 1996) (citation omitted); Benz v. Dtric Ins. Co. (In re Benz), 368 B.R. 861, 864-65 (9th Cir. BAP 2007). De novo means review is independent, with no deference given to the trial court's conclusion. See First Ave. West Bldg., LLC v. James (In re Onecast Media, Inc.), 439 F.3d 558, 561 (9th Cir. 2006).
Determining the application of § 362(k) in this appeal presents a mixed question of law and fact. We review mixed questions of law and fact de novo. Murray v. Bammer (In re Bammer), 131 F.3d 788, 792 (9th Cir. 1997). "A mixed question of law and fact occurs when the historical facts are established; the rule of law is undisputed ... and the issue is whether the facts satisfy the legal rule." Id.
V. DISCUSSION
A. The Filing of the First Case Invoked the Automatic Stay
A bankruptcy case is "commenced" "by the filing with the bankruptcy court of a petition under such chapter by an entity that may be a debtor under such chapter." § 301(a) (Emphasis added). "Who may be a debtor" is set forth in § 109.
Mr. Farnsworth asserts that because the Castros did not comply with the credit counseling requirements of § 109(h), neither was "an entity that may be a debtor under" chapter 7, i.e., neither was "eligible" to obtain an order for relief. Significantly, Mr. Farnsworth does not argue that no case was "commenced" by the Castros where they had not satisfied the credit counseling requirements of § 109(h). This is consistent with our prior determination that eligibility requirements with respect to credit counseling are not jurisdictional. See Mendez v. Salven (In re Mendez), 367 B.R. 109, 116-18 (9th Cir. BAP 2007). "The better view is that because the bankruptcy court retains the authority to determine the debtor's eligibility, the court must have jurisdiction over a case commenced by an ineligible debtor." Id. at 116, quoting In re Parker, 351 B.R. 790, 796 (Bankr. N.D. Ga. 2006).
It is the commencement of the case, not the Castros' eligibility to be debtors, that invokes the protection afforded by the automatic stay. Section 541 provides that "the commencement of a case under section 301 . . . creates an estate." (Emphasis added). The automatic stay precludes "any action to . . . exercise control over property of the estate." § 362(a)(3) (Emphasis added). Our interpretation that the automatic stay applies in cases commenced by ineligible debtors is reinforced by the language of § 362(b)(21), through which Congress excepted enforcement of liens and security interests against real property from the automatic stay if the debtor is ineligible under § 109(g). Congress created no such exception with respect to debtors who are or might be ineligible under § 109(h).
B. Mr. Farnsworth Violated the Automatic Stay
Mr. Farnsworth concedes that the vehicles were property of the Castros' bankruptcy estate. As such, he asserts that the First Case Trustee, not the Castros, was entitled to possession of the vehicles. He further asserts that under § 542, his obligation was to turn the vehicles over to the First Case Trustee. The First Case Trustee advised Mr. Farnsworth he would not decide whether he would administer the vehicles until after the § 341(a) Meeting of Creditors. Mr. Farnsworth incorrectly construed that communication as permission to retain the vehicles.
Mr. Farnsworth argues on appeal that the bankruptcy court erred when it refused to take judicial notice of the declaration ("Declaration") of the First Case Trustee filed in support of the Dismissal Motion. Mr. Farnsworth contends that the Declaration demonstrates that he was cooperating with the First Case Trustee with respect to the turnover of the vehicles under § 542. We need not reach this issue because, as our discussion below indicates, this appeal concerns a violation of the automatic stay rather than turnover.
Section 362(a)(3) expressly prohibits "any act . . . to exercise control over property of the estate." As early as 1991, we interpreted § 362(a)(3) to proscribe the mere knowing retention of estate property. See Abrams v. Sw. Leasing & Rental Inc. (In re Abrams), 127 B.R. 239, 241-43 (9th Cir. BAP 1991). We held in Abrams that a creditor's failure to return a repossessed car to the chapter 7 debtor after receiving notice of a chapter 7 petition constituted a violation of the automatic stay.
The Ninth Circuit also has held that the knowing retention of estate property violates § 362(a)(3). See Cal. Employment Develop. Dept. v. Taxel (In re Del Mission Ltd.), 98 F.3d 1147, 1151 (9th Cir. 1996). While we acknowledge that the creditor in Del Mission Ltd. violated § 362(a)(3) by refusing to turn property of the estate over to the chapter 7 trustee, we view the Del Mission Ltd. analysis as having broader application. The fundamental underlying issue addressed in Del Mission Ltd. was whether the creditor exercised control over property of the estate by retaining possession of estate property. In Del Mission Ltd., the Ninth Circuit clarified that to effectuate the purpose of the automatic stay, "the onus to return estate property is placed upon the possessor; it does not fall on the debtor to pursue the possessor." Id., citing In re Abrams, 127 B.R. at 243. The Ninth Circuit also rejected the argument made here by Mr. Farnsworth that he had no obligation to relinquish possession of the vehicles until he was requested by the First Case Trustee to turn them over. Del Mission Ltd., 98 F.3d at 1152. If Mr. Farnsworth wanted to retain possession of the vehicles after receiving notice of the Castros' bankruptcy filing, the burden was on him to file a motion for relief from the stay.
Mr. Farnsworth's view that § 362(a)(3) applies in chapter 7 cases only where a creditor fails to turn over estate property to a chapter 7 trustee as required by § 542 fails to take into account either the Castros' claim of exemption in the vehicles or the possibility of abandonment of the estate's interest in the vehicles.
Mr. Farnsworth at all times had the ability to seek relief from the automatic stay. Instead, he refused to acknowledge either the existence of the automatic stay or the Castros' claim of exemption in the vehicles. In the face of the Castros' demand for return of the vehicles, he "exercised control over property of the estate." The bankruptcy court correctly found that Mr. Farnsworth violated the automatic stay.
We disagree with Mr. Farnsworth's position that the Castros were required to seek "abandonment" of the vehicles pursuant to § 554(b). A motion to abandon would be necessary only if the Castros were not successful in asserting their claim of exemption in the vehicles.
In contravention of both Abrams and Del Mission Ltd., the effect of Mr. Farnsworth's actions in this case was to place the burden on the Castros to obtain the return of property of the estate in which they claimed an exemption.
C. Mr. Farnsworth's Violation of the Automatic Stay was "Willful"
Whether Mr. Farnsworth violated the automatic stay is simply a threshhold question for purposes of this appeal. A further material issue is whether that violation was "willful" within the meaning of § 362(k)(1), which provides in relevant part:
The protections provided by § 362(k) previously were found at § 362(h). The section was renumbered under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23.
[A]n individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages.
As we stated in Abrams:
The term "willful" for purposes of § 362[(k)] is defined in this circuit as follows:
A "willful violation" does not require a specific intent to violate the automatic stay. Rather, the statute provides for damages upon a finding that the defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional. Whether the party believes in good faith that it had a right to the property is not relevant to whether the act was "willful" or whether compensation must be awarded.
A violation of the stay is thus willful when a creditor acts intentionally with knowledge of the bankruptcy.
127 B.R. at 243 (internal citations omitted). "The `willfulness test' for automatic stay violations merely requires that: (1) the creditor know of the automatic stay; and (2) the actions that violate the stay be intentional." Ozenne v. Bendon (In re Ozenne), 337 B.R. 214, 220 (9th Cir. BAP 2006), quoting In re Peralta, 317 B.R. 381, 389 (9th Cir. BAP 2004). See also In re Pinkstaff, 974 F.2d 113, 115 (9th Cir. 1992). We have held that the duty to relinquish property of the estate also has a reasonableness element. In re Abrams, 127 B.R. at 243 (creditor must relinquish property of the estate within a reasonable time period after notice of the bankruptcy case).
Mr. Farnsworth knew of the bankruptcy filing, by his own admission, not later than January 18, 2008. "Knowledge of the bankruptcy filing is the legal equivalent of knowledge of the automatic stay." In re Ozenne, 337 B.R. at 220 (citation omitted). Despite his knowledge of the automatic stay, Mr. Farnsworth did not relinquish his possession of the vehicles. Neither did he seek relief from the stay under § 362 in an effort to obtain an order authorizing his continued possession. Further, Mr. Farnsworth intended to retain possession of the vehicles rather than return them to the Castros, as evidenced by his correspondence both to the First Case Trustee and to the Castros' bankruptcy counsel. The bankruptcy court specifically found that a reasonable time for Mr. Farnsworth to have returned the vehicles to the Castros is measured from the date the Castros filed their Schedules B and C, asserting a claim of exemption in the full value of the vehicles. This finding is not disputed on appeal.
The bankruptcy court did not err when it determined that Mr. Farnsworth's violation of § 362(a) was "willful."
D. Dismissal of the First Case Did Not Mandate Dismissal of the Adversary Proceeding
Mr. Farnsworth asserts on appeal that the Castros had no standing to pursue a violation of the automatic stay, because they could not, as ineligible debtors, benefit from the automatic stay. We previously made clear that the mere commencement of the First Case was sufficient to invoke the protections of § 362(a). Once the stay existed, Mr. Farnsworth determined at his own risk whether to observe it.
Mr. Farnsworth further asserts that any action to assert rights involving estate property belonged to the First Case Trustee pursuant to § 323, not to the Castros. As the Castros point out in their brief on appeal, Mr. Farnsworth confuses issues of turnover with issues as to the application of the automatic stay. As we pointed out in Abrams, "the failure to return property of the estate with knowledge of the bankruptcy is a violation of both the automatic stay and of the turnover requirements of the Bankruptcy Code." 127 B.R. at 242-43 (emphasis added), citing In re Carlsen, 63 B.R. 706, 711 (Bankr. C.D. Cal. 1986). The appeal before us concerns the interplay between the definition of property of the estate and the impact of the Castros' claim of exemption in the vehicles, and §§ 362(a)(3) and (k), relating to the automatic stay and Mr. Farnsworth's willful violation of the stay.
In order to force Mr. Farnsworth to relinquish property levied upon prepetition, the Castros were not required to seek a determination from the bankruptcy court that they were eligible for the protection of the automatic stay, that the trustee had abandoned the vehicles to them, or that their claim of exemption in the full value of the vehicles was valid. The Castros asserted an exemption in the total value of the vehicles. Their demand for return of the vehicles was sufficient pursuant to § 362.
Dismissal of the First Case did not change the fact that Mr. Farnsworth's actions took place while the automatic stay was in existence. It does not render the stay violation a nullity. Menk v. Lapaglia (In re Menk), 241 B.R. 896, 906 (9th Cir. BAP 1999). Congress provided a remedy for stay violations as a method of ensuring that the automatic stay, central to the operation of the Bankruptcy Code, was respected.
E. The Castros Are Not Entitled to Damages as a Matter of Law
The bankruptcy court correctly found that Mr. Farnsworth willfully violated the automatic stay in the First Case. As parties with a claimed interest in estate property, the Castros had standing to pursue that violation in the adversary proceeding. However, the ultimate question in this appeal is whether the Castros were entitled to damages under § 362(k), i.e., whether they were injured by Mr. Farnsworth's willful violation of the stay. We conclude that they were not, as a matter of law, for the following reasons.
When a chapter 7 bankruptcy petition is filed, an estate is automatically created that comprises essentially all property owned by the debtor. § 541. Section 522(b) allows an individual debtor to exempt specific property from liquidation as part of the estate. Section 522(l) provides that the method for exempting property from the bankruptcy estate is filing a list of property which the debtor claims is exempt. The Bankruptcy Rules set forth the documents a debtor must file in connection with the bankruptcy case.
At the time of the First Case, Interim Bankruptcy Rule 4003 required the Castros to "list the property claimed as exempt under § 522 of the Code on the schedule of assets required to be filed by Rule 1007." Interim Rule 1007(b)(1)(A) required the Castros to file their schedules of assets and liabilities "prepared as prescribed by the appropriate Official Form . . . ." The Castros filed their Official Form 6C (Schedule C — Property Claimed as Exempt) on January 18, 2008, claiming an exemption under California law for the full value of the vehicles.
Once a claim of exemption has been asserted, "[u]nless a party in interest objects, the property claimed as exempt on [Official Form 6C] is exempt." § 522(l). Objections are timely if filed within 30 days after the § 341(a) Meeting of Creditors is concluded. See Interim Bankruptcy Rule 4003(b). If the 30-day objection period mandated by Bankruptcy Rule 4003(b) runs without objection, "[p]roperty claimed as exempt leaves the estate and revests in the debtor . . . ." Kretzer v. DFW Fed. Credit Union (In re Kretzer), 48 B.R. 585, 588 (Bankr. D. Nev. 1985), even if the debtor did not have "a colorable statutory basis for claiming" the exemption. Taylor v. Freeland & Kronz, 503 U.S. 638, 643 (1992).
However, when that revesting occurs is open to question. As stated by this Panel in Hyman v. Plotkin (In re Hyman), 123 B.R. 342, 347 (9th Cir. BAP 1991):
[T]he 30-day period fixes the right to an exemption and the statute as a whole requires that the property somehow revest. The timing of the reversion, however, is not apparent by the interplay of these two rules; it is not necessarily prior to abandonment by the trustee or immediately following the 30-day period.
(Emphasis in original). Because exemption rights are determined as of the petition date, see Klein v. Chappell (In re Chappell), 373 B.R. 73, 77 (9th Cir. BAP 2007), until the property claimed exempt revests in the debtor, it is an inchoate interest of the debtor in the property.
In the typical consumer chapter 7 case, few, if any, objections are filed to claimed exemptions, and it is virtually unheard of for trustees to object to debtors' statutory exemption claims in automobiles. As the bankruptcy court noted, "I've been doing this for over 20 years, and I can count on one hand the number of times a trustee in bankruptcy has administered a vehicle." Transcript of the Trial of the Adversary Proceeding, at 227.
The First Case is not typical. It was dismissed because the Castros did not obtain the prepetition credit counseling required by § 109(h). Mr. Farnsworth argues that the Castros' bankruptcy filings were strategic in the sense that their chapter 7 petitions were filed solely to invoke the automatic stay and regain possession of their vehicles, and that the Castros never had any intention of performing the obligations required of chapter 7 debtors to obtain a discharge in bankruptcy. Some support for that argument is provided by the fact that once the vehicles were returned to the Castros during the Second Case, the Castros allowed the Second Case to be dismissed for failure to appear either at the initial § 341(a) Meeting or at the continued § 341(a) Meeting.
Whatever the motivations behind the Castros' successive bankruptcy filings, they bear the following consequences of their failure to fulfill the eligibility requirements under § 109(h), and thus their obligations as debtors, in the First Case: Although the Castros filed their schedule of claimed exemptions on January 18, 2008, the First Case was dismissed following the bankruptcy court's hearing on its order to show cause regarding the Castros' eligibility on February 7, 2008, prior to the time the 30-day period for objections to the Castros' claimed exemptions would run. Accordingly, the Castros' inchoate claim of ownership of the vehicles did not ripen, i.e., the possessory interest in the vehicles did not revest in the Castros, while the First Case was open. In re Hyman, 123 B.R. at 347.
The record reflects that the Castros' assets were not abandoned to them until the First Case was dismissed and closed. Accordingly, the estate held the only ownership interest in the vehicles during the relatively short period that the First Case was pending, and the trustee as the estate's representative had the only possessory interest in the vehicles. In re Knaus, 889 F.2d at 775. Abrams does not require a different conclusion because this Panel determined in Abrams that the record supported a finding that a willful violation of the stay occurred but remanded for a determination of damages under § 362(h), the version of current § 362(k) prior to the 2005 amendments to the Bankruptcy Code. 127 B.R. at 243-44.
We do not suggest that the Castros were required to seek abandonment from the trustee in order for the vehicles to be removed from estate property. We note only that they were not foreclosed from seeking abandonment if the exemption process was not sufficient for their purposes.
While it remanded for a determination of damages under former § 362(h), the Panel in Abrams was not called upon to, nor did it, decide the issue raised here: whether individual debtors were injured, and thus entitled to damages under § 362(k), for a willful violation of the stay in a chapter 7 case dismissed prior to the end of the objection period with respect to their claimed exemptions in the subject property.
Section 362(k)(1) provides that "an individual injured by any willful violation of the stay . . . shall recover any actual damages, including costs and attorneys' fees, . . . ." The Castros are individuals, but they had no ownership interest independent of the estate that entitled them to possession of the vehicles, and thus would support an award of damages under § 362(k), while the First Case was pending. Accordingly, the bankruptcy court erred as a matter of law in awarding damages, including attorneys' fees, to the Castros for Mr. Farnsworth's violation of the stay. Had the ownership interest in the vehicles revested in the Castros during the pendency of the First Case, we would have reviewed the bankruptcy court's award of damages for an abuse of discretion, mindful that because exemptions are determined as of the petition date, so would be the rights relating to property interests vested in the debtors as the result of a valid claim of exemption.
VI. CONCLUSION
The bankruptcy court did not err when it determined that Mr. Farnsworth's exercise of control over the vehicles after the Castros filed their First Case constituted a willful violation of the automatic stay. However, the bankruptcy court erred as a matter of law when it awarded the Castros damages, including attorneys' fees, for Mr. Farnsworth's stay violation, when the 20 estate had the only ownership interest entitling the trustee to possession of the vehicles during the limited period that the First Case was pending. Accordingly, we AFFIRM the bankruptcy court's finding that Mr. Farnsworth willfully violated the automatic stay in the First Case, but REVERSE the bankruptcy court's judgment for damages, including attorneys' fees, to the Castros.