Attorney for Debtor’s Ex-Wife, Who had Knowledge of Bankruptcy, Violated the Automatic Stay by Bringing Contempt Action in Divorce Case

Attorney for Debtor’s Ex-Wife, Who had Knowledge of Bankruptcy, Violated the Automatic Stay by Bringing Contempt Action in Divorce Case

Before the court is a motion for contempt filed by the Debtor, seeking sanctions against “Attorney,” counsel for the Debtor’s ex-wife, for alleged violations of the automatic stay and discharge injunction. In particular, the Debtor seeks damages for Attorney’s act of filing, at a time when the automatic stay was in effect, a motion for contempt in the divorce action between the Debtor and his ex-wife. Additionally, the Debtor requests damages for Attorney’s act of filing, at a time after the entry of the Debtor’s chapter 7 discharge, a second motion for contempt in the divorce action. Both motions for contempt filed by Attorney alleged that the Debtor had failed to comply with the divorce judgment by neglecting to pay a Home Depot credit card bill.

In August of 2011, the Debtor’s ex-wife commenced, with the assistance of Attorney, a dissolution of marriage proceeding against her then-husband, the Debtor. Throughout the Divorce Action, Attorney  represented the ex-wife. The Debtor proceeded pro se in the Divorce Action. The Divorce Judgment provided, in relevant part: The Debtor was responsible for paying in full the credit card bill from Home Depot (that was in ex-wife’s name only).

On April 19, 2013, the Debtor, representing himself and therefore proceeding pro se, filed a voluntary chapter 7 bankruptcy petition. On the statistical summary of certain liabilities and related data (Official Form 6 – Summary 12/07), the Debtor stated that he did not owe any domestic support obligations, but owed $400.00 in domestic support, separation agreement, and divorce degree obligations that were not reported on Schedule E. On Schedule F (a listing of non-priority unsecured claims), the Debtor identified Home Depot Credit Services as a creditor holding a contingent claim of $6,645.11 for charge account fees decreed in judgments.

The Debtor additionally identified Attorney, as a collection agent for Home Depot Credit Services, as a creditor holding a contingent claim of $0.00.  On Schedule H (a listing of co-debtors), he listed ex-wife.  On the creditor mailing matrix filed with the petition, the Debtor listed Attorney but did not separately list his ex-wife.  On April 21, 2013, the Bankruptcy Noticing Center  served, by first class mail, the Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors & Deadlines on Attorney.

On May 30, 2013, the chapter 7 trustee filed a Report of No Distribution and, thereafter on August 21, 2013, the Debtor received an order of discharge pursuant to 11 U.S.C. § 727.

On July 25, 2013, at a time when the automatic stay remained in effect, Attorney, on behalf of the Debtor’s now ex-wife, moved, in the Divorce Action, for an order of contempt against the Debtor for his failure to pay the Home Depot bill as required under the Divorce Judgment. The Debtor, on August 9, 2013, opposed the motion for contempt citing the fact that he had a pending bankruptcy case. On August 28, 2013, the state court entered an order noting that ex-wife did not appear to be actively pursuing the motion for contempt. The order marked the Debtor’s objection off the court’s calendar without prejudice for him to reclaim his objection should his ex-wife seek to pursue the motion for contempt in the future.

On June 11, 2014, at a time when the automatic stay had expired, Attorney  filed a second motion for contempt (“2014 Motion for Contempt”). The 2014 Motion for Contempt alleged, in pertinent part, that the Debtor had failed to comply with the Divorce Judgment by neglecting to pay the Home Depot bill. On August 29, 2014, the state court ruled that to the extent the 2014 Motion for Contempt

seeks to have the Debtor held in contempt for his failure to pay the Home Depot credit card bill in accordance with Order #9 of the orders incorporated in the judgment dated November 12, 2012, the court finds that because of his good faith belief that the debt has been or will be discharged in his bankruptcy case, the Debtor has not willfully violated a court order. However, the court further finds that the Debtor failed to prove that the obligation in question was properly listed in his bankruptcy petition, the Debtor testifying only that he named his former wife’s attorney as a creditor to receive notice of the bankruptcy filing.
Accordingly, as a remedial order the court determines that there has been no showing that the Debtor’s obligation under Order #9 of the orders incorporated into the judgment dated November 12, 2012 has been discharged in bankruptcy, and that the said obligation remains in full force and effect.

On October 7, 2015, in this instant proceeding, the Debtor filed a motion for contempt against Attorney  for violating the Bankruptcy Code’s automatic stay provision and the discharge injunction.

The ex-wife’s Attorney  argued that the court should not find him in contempt because he believed that, despite his actual knowledge of the bankruptcy proceeding, the Debtor had not properly named his client – ex-wife – and, as a result, the bankruptcy did not affect him or his client.

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