In re: Miguel Angel Gracia

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: April 4, 2014
• Docket: CC-13-1373-PaTaKu
• Status: Unpublished

Opinion

FILED APR 04 2014 1 NO FO PUBL A IO T R IC T N 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-13-1373-PaTaKu ) 6 MIGUEL ANGEL GRACIA, ) Bankr. No. 09-40594-BR ) 7 Debtor. ) ______________________________) 8 ) FABIO BANEGAS; GREGORY L. ) 9 DOLL, ) ) 10 Appellants, ) ) 11 v. ) M E M O R A N D U M1 ) 12 MIGUEL ANGEL GRACIA, ) ) 13 Appellee. ) ______________________________) 14 Argued and Submitted on February 20, 2014 15 at Pasadena, California 16 Filed - April 4, 2014 17 Appeal from the United States Bankruptcy Court for the Central District of California 18 Honorable Barry Russell, Bankruptcy Judge, Presiding 19 20 Appearances: Ronald M. St. Marie of Doll Amir Eley LLP argued for appellants Fabio Banegas and Gregory L. Doll; 21 Steven A. Schwaber argued for appellee Miguel Angel Gracia. 22 23 Before: PAPPAS, TAYLOR and KURTZ, Bankruptcy Judges. 24 25 26 1 This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8013-1. 1 Appellants Fabio Banegas (“Banegas”) and Gregory L. Doll 2 (“Doll” and, together, “Appellants”) appeal the order of the 3 bankruptcy court finding them in contempt for violation of the 4 discharge order entered in the chapter 72 bankruptcy case of 5 debtor Miguel Gracia (“Gracia”). We AFFIRM. 6 FACTS 7 Gracia filed a chapter 7 bankruptcy petition on November 9, 8 2009. He did not list Banegas as a creditor on his schedules. 9 Gracia received a discharge on March 11, 2010, and the bankruptcy 10 case was closed on March 21, 2010. 11 On October 7, 2010, represented by his attorney Doll, 12 Banegas filed a complaint (the “Original Complaint”) in Los 13 Angeles Superior Court against Gracia alleging claims for fraud, 14 breach of contract, and conspiracy to commit fraud (the “State 15 Court Proceedings”). The Original Complaint included the 16 following allegations: 17 6. In November 2004, [Banegas] loaned [Gracia] $7,000 from [Banegas’] checking account. 18 7. [Banegas] and [Gracia] agreed that [Gracia] would 19 invest said money into [Gracia’s] business transactions, and that [Banegas] would receive a 20 return on his investment every three to four months. In reality, [Banegas] received a return 21 at irregular intervals. 22 8. [Banegas] is informed and believes that [Gracia] invested the money, and would periodically pay 23 commissions to [Banegas]. 24 9. Most of the commissions paid to [Banegas], in addition to other savings, were reinvested by 25 Defendant and amounted to approximately $45,000 by the end of 2009. 26 27 2 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101 – 1532.

-2- 1 10. As a form of collateral for the money invested by [Banegas, Gracia] gave [Banegas] checks to 2 guarantee payment of the $45,000. 3 11. In 2009, [Banegas] requested full payment of the $45,000, but only received $10,000 from [Gracia]. 4 12. In or about November of 2009, [Gracia] agreed 5 that, by the end of February 2010, [Gracia] would pay the remaining $35,000 to [Banegas]. 6 13. By the end of February 2010, however, [Gracia] 7 failed to return the remaining $35,000 to [Banegas], as agreed. At considerable time and 8 expense, [Banegas] was able to collect only $5,000. 9 10 Original Complaint at 3, October 7, 2010. 11 On January 10, 2011, Gracia filed a motion to reopen his 12 bankruptcy case to add Banegas as a creditor. On March 1, 2011, 13 Appellants filed an opposition to this motion suggesting that 14 Gracia had concealed assets. Gracia responded on March 2, 2011, 15 denying that he had concealed assets. The bankruptcy court 16 reopened the case on March 31, 2011. The case was again closed 17 on April 21, 2011. 18 On October 26, 2012, Gracia filed two motions in the 19 bankruptcy court: a second motion to reopen case (“Second Reopen 20 Motion”), and a motion for a temporary restraining order to halt 21 the State Court Proceedings and to hold Appellants in contempt 22 for violation of the injunction arising from entry of the 23 discharge order in the bankruptcy case (“Contempt Motion”). 24 On October 30, 2012, Appellants responded to the Second 25 Reopen and Contempt Motions. They generally argued that, in the 26 State Court Proceedings, Banegas was pursuing the recovery of 27 post-petition debts evidenced by the bounced checks given to him 28 by Gracia after the bankruptcy, which debts they claimed had not

-3- 1 been discharged. 2 The bankruptcy court held its first hearing on the Second 3 Reopen and Contempt Motions on November 7, 2012. After hearing 4 from counsel, the court concluded that, based on the facts 5 alleged in the Original Complaint, Banegas was indeed asserting a 6 prepetition claim against Gracia stemming from Banegas’ payment 7 of the $7,000 to Gracia in 2004, and that assertion of such 8 claims amounted to a violation of the discharge injunction. The 9 bankruptcy court therefore ordered that the State Court 10 Proceedings be stayed but, assuming there was a proper basis to 11 do so, directed Appellants to amend the complaint to recover only 12 post-petition debts. The bankruptcy court gave clear 13 instructions to Banegas and Doll regarding the contents of any 14 amended complaint: “By December 7th you’ll file an amended 15 complaint in the Superior Court . . . and make it very clear that 16 that complaint will only deal with the . . . events that happened 17 post-petition . . . as long as there’s no allegations of any 18 obligations of this debtor prepetition.” Hr’g Tr. 21:4-22, 19 November 7, 2012. The court continued the hearing on the Second 20 Reopen and Contempt Motions. 21 On November 9, 2012, Appellants filed a motion in state 22 court for leave to file a First Amended Complaint (“FAC”). The 23 state court granted leave on February 20, 2013, and the FAC was 24 filed in the state court. Dissatisfied with its contents, Gracia 25 submitted a copy of the FAC to the bankruptcy court on March 2, 26 2013. The FAC alleged, among other facts, that: 27 6. In November 2004, [Banegas] invested $7,000 through [Gracia] based on the representation that 28 said money would be invested by [Gracia] and earn

-4- 1 a higher rate of return than interest earned from a bank account. 2 7. Specifically, [Banegas] and [Gracia] agreed that 3 [Gracia] would “invest said money into loan transactions, and that [Banegas] would receive a 4 return on his investment every three to four months. In reality, [Banegas] received a return 5 at irregular intervals. 6 8. [Banegas] is informed and believes that [Gracia] invested the money in A to Z Cash, which [Banegas] 7 now understands is a business controlled by [Gracia’s] daughter, Massiel Gracia. Periodically, 8 [Gracia] would pay money earned from the investment to [Banegas]. 9 9. Most of the returns on the initial investment paid 10 to [Banegas], in addition to other savings, were reinvested by [Gracia] on [Banegas’] behalf. 11 Eventually said amounts totaled approximately $45,000 by the end of 2009. 12 10. In 2009, [Banegas] requested full payment of the 13 $45,000, yet initially received $10,000 from [Gracia]. 14 11. After November 4, 2009, [Gracia] agreed that, by 15 the end of February 2010, [Gracia] would personally pay the remaining $35,000 to [Banegas]. 16 In consideration for this, [Banegas] agreed to forbear on any immediate collection efforts to 17 recover the debt owed by A to Z Cash or [Gracia’s] daughter. 18 12. By the end of February of 2010, however, [Gracia] 19 failed to return the remaining $35,000 to [Banegas], as agreed. At considerable time and 20 expense, [Banegas] was able to collect only $5,000. To assure future payments, [[Gracia] 21 agreed to issue, and after November 4, 2009 did issue, personal checks in the amount of $5,000 22 each, totaling $30,000. 23 13. On or about April 29, 2010, [Banegas] again agreed to pay Plaintiff the remainder of the debt in two 24 installments of $15,000. 25 FAC at 3, November 9, 2012. 26 At the continued hearing on the Second Reopen and Contempt 27 Motions, held on March 19, 2013, the bankruptcy court reviewed 28 the FAC and found that it also alleged facts stating a claim in

-5- 1 violation of the discharge injunction. The court ordered that 2 the bankruptcy case be reopened and ruled that the FAC violated 3 the discharge injunction. The court gave Appellants one last 4 opportunity to prepare another amended complaint, to be presented 5 first to the bankruptcy court for review, that omitted the 6 offensive allegations. The hearing was continued again. 7 As directed, Appellants submitted a proposed Second Amended 8 Complaint (“SAC”) to the bankruptcy court for review on April 25, 9 2013. The hearing concerning the SAC, Second Reopen Motion and 10 Contempt Motion occurred on May 7, 2013. In its order granting 11 the Second Reopen Motion on May 16, 2013, the bankruptcy court 12 determined that the SAC, as presented, did not violate the 13 discharge injunction, that the State Court Proceedings could go 14 forward, and that there would be a continued hearing on sanctions 15 for violation of the discharge injunction. 16 The bankruptcy court held a final hearing on July 23, 2013. 17 The court granted the Contempt Motion; it awarded Gracia damages 18 based on the attorney fees and costs he had incurred in 19 prosecuting the Contempt Motion, but declined any award for his 20 fees and costs incurred in the State Court Proceedings. The 21 bankruptcy court entered an order on August 5, 2013, imposing the 22 compensating sanctions against Appellants, jointly and severally, 23 in the amount of $13,673.00. The order recited, in part, that: 24 [Appellants] violated the statutory discharge injunction imposed under 11 U.S.C. § 524(a)(2) by 25 filing their original Complaint and their First Amended Complaint in the Los Angeles Superior Court case 26 entitled Fabio B[a]negas v. Miguel Gracia, Superior Court case no. 10CB4343. 27 These violations were willful on [Appellants’ part.] 28

-6- 1 Appellants filed a timely notice of appeal of the bankruptcy 2 court’s order on August 9, 2013. 3 JURISDICTION 4 The bankruptcy court had jurisdiction under 28 U.S.C. 5 §§ 1334 and 157(b)(2)(A) and (I). We have jurisdiction under 6 28 U.S.C. § 158. 7 ISSUES 8 Whether the bankruptcy court clearly erred when it 9 determined that Appellants willfully violated the discharge 10 injunction. 11 Whether the bankruptcy court abused its discretion when it 12 determined that Appellants were in contempt. 13 STANDARDS OF REVIEW 14 The bankruptcy court's finding that a willful violation of 15 the § 524 discharge injunction has occurred is reviewed for clear 16 error, and its imposition of sanctions for contempt is reviewed 17 for abuse of discretion. Sciarrino v. Mendoza, 201 B.R. 541, 543 18 (E.D. Cal 1996). A finding is clearly erroneous if it is 19 illogical, implausible, or without support in the record. United 20 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc). 21 In applying the abuse of discretion standard, we first “determine 22 de novo whether the [bankruptcy] court identified the correct 23 legal rule to apply to the relief requested.” Id. at 1262. If 24 the correct legal rule was applied, we then consider whether its 25 “application of the correct legal standard was (1) illogical, 26 (2) implausible, or (3) without support in inferences that may be 27 drawn from the facts in the record.” Id. Only in the event that 28 one of these three apply are we then able to find that the

-7- 1 bankruptcy court abused its discretion. Id. 2 DISCUSSION 3 A. 4 In a chapter 7 case, with exceptions not relevant here, 5 “[t]he [bankruptcy] court shall grant the debtor a discharge.” 6 § 727(a). When entered, this order “discharges the debtor from 7 all debts that arose before the date of the [bankruptcy filing].” 8 § 727(b). To give the discharge teeth, § 524(a)(2) prescribes 9 that the discharge “operates as an injunction against the 10 commencement or continuation of an action . . . to collect, 11 recover or offset any such debt as a personal liability of the 12 debtor, whether or not discharge of such debt is waived[.]” See 13 Aldrich & Imbrogno (In re Aldrich), 34 B.R. 776, 779 (9th Cir. 14 BAP 1983) (explanation of how §§ 524 and 727 work together). 15 Unlike § 362(k), addressing violations of the § 362(a) 16 automatic stay, there is no provision in the Code providing a 17 specific remedy for violations of the § 524(a) discharge 18 injunction. Instead, a discharge violation must be pursued via a 19 motion invoking the bankruptcy court’s contempt powers embodied 20 in § 105(a). In re Nash, 464 B.R. at 879-80 (citing Walls ex rel 21 Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 507 (9th Cir. 22 2002) and Renwick v. Bennett (In re Bennett), 298 F.3d 1059, 1069 23 (9th Cir. 2002)). 24 To be subject to sanctions for violating the discharge 25 injunction, a party’s violation must be “willful.” In re Nash, 26 464 B.R. at 880. The Ninth Circuit applies a two-part test to 27 determine whether the willfulness standard has been met: (1) did 28 the alleged offending party know that the discharge injunction

-8- 1 applied; (2) and did such party intend the actions that violated 2 the discharge injunction? Id. at 880 (citing Espinosa v. United 3 Student Aid Funds, Inc., 553 F.3d 1193, 1205 n.7 (9th Cir. 2008), 4 aff'd, 559 U.S. 260 (2010)); see also, Zilog, Inc. v. Corning 5 (In re Zilog, Inc.), 450 F.3d 996, 1007 (9th Cir. 2006). In 6 applying the second prong of this test, the bankruptcy court's 7 focus is not on the offending party’s subjective beliefs or 8 intent, but on whether the party’s conduct in fact violated the 9 order at issue. Bassett v. Am. Gen. Fin. (In re Bassett), 10 255 B.R. 747, 758 (9th Cir. BAP 2000), rev'd on other grounds, 11 285 F.3d 882 (9th Cir. 2002). “A party's negligence or absence 12 of intent to violate the discharge order is not a defense against 13 a motion for contempt.” Jarvar v. Title Cash of Mont., Inc. 14 (In re Jarvar), 422 B.R. 242, 250 (Bankr. D. Mont. 2009) (citing 15 Atkins v. Martinez (In re Atkins), 176 B.R. 998, 1009-10 (Bankr. 16 D. Minn. 1994)); see Hardy v. United States (In re Hardy), 17 97 F.3d 1384, 1390 (11th Cir. 1996) (in determining “willful” 18 violations of the discharge injunction, "the focus of the court's 19 inquiry. . . is not on the subjective beliefs or intent of the 20 alleged contemnors in complying with the order, but whether in 21 fact their conduct complied with the order at issue"). 22 To support contempt, the moving party must prove by clear 23 and convincing evidence that the offending party violated the 24 discharge order. In re Zilog, Inc., 450 F.3d at 1007; Knupfer v. 25 Lindblade (In re Dyer), 322 F.3d 1178, 1191 (9th Cir. 2003). The 26 moving party bears this same burden to prove that sanctions are 27 justified. Espinosa, 553 F.3d at 1205 n.7. If adequate proof is 28 produced, the burden then shifts to the alleged offending party

-9- 1 to demonstrate why it was unable to comply with the discharge 2 injunction. In re Bennett, 298 F.3d at 1069. If a bankruptcy 3 court finds that a party has willfully violated the discharge 4 injunction, it may award a debtor actual damages, punitive 5 damages, and attorney's fees and costs. In re Nash, 464 B.R. at 6 880 (citing Espinosa, 553 F.3d at 1205 n.7). The bankruptcy 7 court has broad discretion in fashioning a remedy for violation 8 of the discharge injunction. In re Bassett, 255 B.R. at 758. 9 B. 10 The bankruptcy court did not clearly err in determining that 11 Appellants violated the discharge injunction in this case. The 12 discharge was entered in the bankruptcy case on March 11, 2010. 13 On October 7, 2010, Appellants filed the Original Complaint in 14 state court which alleged that Banegas had “loaned” $7,000 to 15 Banegas in 2004; that over the years Gracia had invested the 16 money; and that Banegas had demanded payment and Gracia did not 17 make full payment. As the transactions between Banegas and 18 Gracia were described in the Original Complaint, there is little 19 room to argue that Appellants were not engaged in an effort to 20 collect a debt arising before Gracia filed his bankruptcy 21 petition that, pursuant to § 727(b), had been discharged. 22 On January 10, 2011, Gracia filed a motion to reopen the 23 bankruptcy case and to add Banegas as a creditor. By responding 24 to that motion on March 1, 2011, Appellants demonstrated that 25 they were now aware of the bankruptcy case and the discharge 26 order. 27 After Gracia filed the Contempt Motion on October 26, 2012, 28 Appellants argued to the bankruptcy court that they were not

-10- 1 attempting to pursue collection of any prepetition debts in the 2 State Court Proceedings. However, at the first hearing on the 3 Contempt Motion on November 7, 2012, the bankruptcy court made 4 its finding that, by asserting in the Original Complaint that the 5 debt owed by Gracia to Banegas arose in 2004, and that it had not 6 been repaid, Appellants had violated the discharge injunction. 7 As a reaction to their argument that, they were attempting to 8 collect post-bankruptcy debts from Gracia, the bankruptcy court 9 gave clear, unambiguous instructions to Appellants to file an 10 amended complaint in the State Court Proceedings to make it “very 11 clear that . . . [the critical] events that happened post- 12 petition . . . .” Hr’g Tr. 21:4-22, October 26, 2012. 13 Appellants ignored the bankruptcy court’s admonition that 14 any amended complaint should not allege that Gracia’s obligations 15 stemmed from his prepetition dealings with Gracia. Instead, 16 Appellants filed the FAC which, while it deleted a direct 17 reference to the 2004 “loan” from Banegas to Gracia, nonetheless 18 contained allegations concerning Gracia’s obligations to Banegas 19 occurring before his bankruptcy. As a result, at the continued 20 hearing on March 19, 2013, the bankruptcy court found that the 21 FAC still contained offending allegations such that its filing 22 was also a violation of the discharge injunction. 23 Appellants argued in the bankruptcy court, and now on 24 appeal, that they never intended to collect a prepetition debt 25 from Gracia. However, they conceded that the first two 26 complaints were, at least, ambiguous. The bankruptcy court found 27 no ambiguity in the allegations of the Original Complaint, and 28 informed Appellants that the content of the complaint appeared to

-11- 1 bring into play a prepetition debt, and that, to avoid a 2 discharge violation, it must be amended to make it “very clear” 3 that no prebankruptcy obligations were targeted. Unfortunately, 4 the bankruptcy court’s instructions went unheeded because, at 5 best, the FAC contained allegations that tied Gracia’s execution 6 of the post-bankruptcy checks to Banegas directly to Banegas’ 7 original “loan” to Gracia in 2004, and Gracia’s alleged conduct 8 in “investing” that money in his daughter’s business, all events 9 that preceded his bankruptcy filing. Because these allegations 10 suggest that Banegas’ right to collect from Gracia and his 11 daughter stem from prebankruptcy events, they constitute a 12 discharge violation as to Gracia. 13 The bankruptcy court determined that, in the FAC, Banegas 14 was again attempting to collect a prepetition debt owed to him by 15 Gracia. Since the discharge applies to “debts,” we refer to the 16 Supreme Court’s explanation of the meaning of that term in the 17 Bankruptcy Code: 18 A "debt" is defined in the Code as "liability on a claim," § 101(12), a "claim" is defined in turn as a 19 "right to payment," § 101(5)(A), and a "right to payment," we have said, "is nothing more nor less than 20 an enforceable obligation." Pennsylvania Dept. of Public Welfare v. Davenport, 495 U.S. 552, 559, 21 109 L. Ed. 2d 588, 110 S. Ct. 2126 (1990). 22 Cohen v. de la Cruz, 523 U.S. 213, 218 (1998). 23 Here, Banegas asserted in the FAC that he had provided funds 24 to Gracia in 2004 that originally totaled $7,000, FAC at ¶ 6; 25 that over time, those funds, with interest and investment 26 returns, amounted to $45,000, FAC at ¶ 9; and that, prepetition 27 in 2009, “[Banegas] requested full payment of the $45,000, yet 28 initially received $10,000 from [Gracia].” FAC at ¶ 10. Fairly

-12- 1 construed, these allegations in the FAC assert that Gracia is 2 indebted to Banegas stemming from his receipt of the original 3 tender of funds in 2004, and that Banegas made a demand that 4 Gracia repay him before Gracia’s bankruptcy. The FAC also 5 elaborates the difficulties Banegas encountered in recovering the 6 debt prepetition. ¶¶ 11-12. It is only in ¶ 12 that Banegas 7 alleges that Gracia had tendered checks to Banegas in payment of 8 this obligation “after November 9, 2009," the filing date of 9 Gracia’s petition. While Appellants refuse to believe it, the 10 FAC effectively alleges that Banegas was asserting a prepetition 11 right to payment of a financial obligation by Gracia and that 12 Banegas had attempted to recover from Gracia before Gracia issued 13 the bounced checks. 14 We have examined the FAC and, giving it a fair reading, 15 conclude that the bankruptcy court did not clearly err in finding 16 that Appellants were attempting to collect prebankruptcy debts 17 allegedly owed by Gracia to Banegas. As noted above, whether 18 Appellants committed a violation of the discharge injunction is a 19 finding of fact that we review for clear error. Sciarrino, 20 201 B.R. at 543. The bankruptcy court considered the two 21 complaints filed by Appellants against Gracia, together with 22 Appellants’ explanation of the allegations in those complaints, 23 and found that both asserted the right to enforce obligations of 24 Gracia that had been discharged. Where two permissible views of 25 the evidence exist, the fact finder's choice between them cannot 26 be clearly erroneous. Anderson v. City of Bessemer City, N.C., 27 470 U.S. 564, 573-74 (1985). 28 Appellants also contend that the debt targeted by Banegas’

-13- 1 allegations in the FAC was really that of Gracia’s daughter, and 2 that Gracia, after his bankruptcy filing, had agreed to pay her 3 debt to Banegas. But this argument is belied by the allegations 4 of the FAC. Therein, it is clear that Banegas sought to recover 5 funds from Gracia, not just from his daughter, based on the 6 representation that Gracia invested in his daughter’s business 7 using money obtained from Banegas in 2004. 8 We agree with the bankruptcy court that the FAC alleges 9 facts and seeks recovery from Gracia on account of a prepetition 10 debt. Perhaps this was a drafting error by Doll, and this may 11 have been remedied in the SAC. Nevertheless, Appellants filed 12 the FAC in the State Court Proceedings after the bankruptcy court 13 directed them to remove any prepetition allegations against 14 Gracia. They submitted the FAC to the state court with the 15 offending allegations against Gracia. The bankruptcy court did 16 not clearly err in determining that there was a violation of the 17 discharge injunction in the FAC. 18 That there was a violation of the discharge injunction in 19 this case requires us to review the bankruptcy court’s decision 20 to find that Appellants’ actions constituted contempt of the 21 discharge order. According to the two-prong test in In re Nash, 22 the bankruptcy court must find that: (1) Appellants knew that the 23 discharge injunction prohibited their actions; and (2) Appellants 24 intended the actions that violated the discharge injunction. 25 464 B.R. at 880. 26 On this record, there may be some doubt whether Appellants 27 were aware of the Gracia bankruptcy filing and entry of the 28 discharge order at the time they filed the Original Complaint.

-14- 1 However, there is no doubt that Appellants knew before filing the 2 FAC that there was a bankruptcy and discharge injunction. 3 Appellants nevertheless filed the FAC that continued to allege 4 that Gracia’s prepetition activities created a debt, in defiance 5 of the bankruptcy court’s instruction to remove any such 6 allegations. We conclude that the first part of the Nash test is 7 satisfied. 8 The second requirement of Nash is also met. It was not 9 necessary that the bankruptcy court find that Appellants intended 10 to violate the discharge injunction by filing the FAC. It was 11 sufficient if they intended the acts that violated the 12 injunction. In re Jarvar, 422 B.R. at 250. Nor is it relevant 13 that Appellants might have not understood that their actions 14 violated the injunction. Hardy, 97 F.3d at 1390. Here, the 15 bankruptcy court had instructed Appellants to remove all 16 references to Gracia’s prepetition obligations in any amended 17 complaint. Appellants seemed to ignore those instructions and 18 asserted similar allegations in the FAC. Therefore, at least as 19 to the FAC, the bankruptcy court did not abuse its discretion in 20 finding that Appellants were in contempt for violating the 21 discharge injunction or in awarding compensatory sanctions.3 22 CONCLUSION 23 We AFFIRM the order of the bankruptcy court. 24 25 26 3 27 Appellants do not challenge the amount of the bankruptcy court’s sanctions award on appeal, so we do not review that 28 aspect of the order.

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