In re Deemer

602 B.R. 770
CourtUnited States Bankruptcy Court, M.D. Alabama
DecidedJune 17, 2019
DocketCase No. 14-12353-BPC
StatusPublished
Cited by1 cases

This text of 602 B.R. 770 (In re Deemer) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Deemer, 602 B.R. 770 (Ala. 2019).

Opinion

Bess M. Parrish Creswell, United States Bankruptcy Judge

This matter is before the Court on Debtor's Amended Motion for Contempt and Motion for Sanctions for Violation of Discharge Injunction (Doc. 48) filed against NCEP, LLC.1 The Court, having reviewed the pleadings, briefs, and counsels' arguments, holds the Amended Motion for Contempt and Motion for Sanctions is GRANTED in part and DENIED in part.

I. JURISDICTION

This Court has jurisdiction over the parties and the subject matter pursuant to *77428 U.S.C. §§ 157(a) and 1334(b) ; In re McLean , 794 F.3d 1313, 1318-19 (11th Cir. 2015). Furthermore, this Court may hear and adjudicate this matter because it is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). This is a final order.

II. FACTS

Lenora Jack Deemer ("Debtor") filed a voluntary petition under Chapter 13, Title 11, United States Code on November 18, 2014 (Doc. 1). Debtor's plan proposed to pay Santander Consumer USA ("Santander") for a 2005 Nissan Altima valued at $6,900.00 (Doc. 2). On December 2, 2014, Santander filed a Proof of Claim in the amount of $8,494.62 (Claim 5-1). The claim was subsequently transferred to NCEP, LLC ("NCEP") on June 2, 2015 (Doc. 23). On August 10, 2017, Debtor filed her Notice of Conversion to Chapter 7 and expressed her intention to surrender the inoperable 2005 Nissan Altima (Doc. 27). The discharge order entered on November 28, 2017 (Doc. 40). Neither Santander nor NCEP ever repossessed the collateral. On November 29, 2018, this Court entered an Order (Doc. 44) granting Debtor's Motion to Reopen (Doc. 43). Debtor filed the Motion for Contempt (Doc. 46) on December 3, 2018, which was subsequently amended (Doc. 48) on December 5, 2018 to include a request for sanctions. The matter came on for hearing on January 17, 2019, and the Court allowed additional time for the parties to file briefs regarding whether NCEP's actions (and/or inactions) effectively coerced Debtor in violation of the discharge injunction. NCEP filed its brief on February 15, 2019 (Doc. 55), and Debtor filed her brief on February 18, 2019 (Doc. 56).

III. CONCLUSIONS OF LAW

Debtor seeks enforcement of this Court's discharge order entered on November 28, 2017 and asks the Court hold NCEP in contempt and impose sanctions for violating the injunction.

A. Contempt -- Violation of Discharge Injunction

Debtor asserts NCEP "violated the discharge injunction of 11 U.S.C. § 524(a) by engaging in acts which coerced or had the effect of coercing Debtor into remitting money to NCEP in payment of an obligation upon which Debtor's in personam liability had been extinguished" through the discharge order. (Doc. 56). Section 524 of the Bankruptcy Code imposes a post-discharge injunction against the collection of debts discharged in bankruptcy. In re Hardy , 97 F.3d 1384, 1388-89 (11th Cir. 1996). The Code provides in relevant part:

(a) A discharge in a case under this title -
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; ....

11 U.S.C. § 524(a)(2). The moving party bears the burden of proving by clear and convincing evidence that a court order has been violated. In re McLean , 794 F.3d at 1326.

In a recent Supreme Court decision, the Court held a creditor may be held in civil contempt for violating a discharge injunction if there is no fair ground of doubt as to whether the discharge order barred the creditor's conduct. Taggart v. Lorenzen , --- U.S. ----, 139 S. Ct. 1795, 1797, --- L.Ed.2d ---- (2019). The Court held § 524 and § 105 of the Bankruptcy Code "authorize[ ] a court to impose civil contempt sanctions when there is no objectively reasonable basis for concluding that *775the creditor's conduct might be lawful under the discharge order." Id. at 1801. This is an objective test. Id. at 1804. Cf. In re McLean , 794 F.3d at 1322 ("[T]he test for whether a creditor violates the discharge injunction under 11 U.S.C. § 524(a)(2) is whether the objective effect of the creditor's action is to pressure a debtor to repay a discharged debt.").

Debtor asserts NCEP's failure to timely repossess the vehicle or release the title effectively coerced Debtor into repaying the discharged debt - in violation of the discharge injunction. In support, Debtor relies on the First Circuit decision of In re Pratt , 462 F.3d 14 (1st Cir. 2006). In In re Pratt , the debtor proposed to surrender her inoperable vehicle in lieu of reaffirming or redeeming the loan.

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Bluebook (online)
602 B.R. 770, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-deemer-almb-2019.