Fonseca v. Government Employees Association

Summarized by David Baker , Law Office of David G. Baker
10 years 2 months ago

Citation:

1st Cir. BAP No. PR-15-033

Tag(s):

Ruling:

Bankruptcy court's grant of summary judgment to the creditor affirmed.

Procedural context:

This was an appeal from a grant of summary judgment to a creditor in an adversary proceeding where the debtor claimed that the creditor had violated the discharge injunction.

Facts:

The fact pattern in this case is rather complex. In summary, the debtor was a government employee in Puerto Rico. As such, he was required by statute to belong to a non-govermental savings & loan, and 3% of his salary was deducted and paid into the account. A few months prior to leaving employment, he signed two promissory notes with the savings and loan. The loan documents provided that the loans would be secured by his accumulated sick and vacation leave time. Between the time he took the loans and his leaving employment, he filed a chapter 7 case and received a discharge; no discharge ability issues were raised. After the case was closed and the debtor left employment, the savings and loan sent correspondence to the government (not to the debtor) requesting payment of the balance due on the loans pursuant to the statutory lien(s). The debtor reopened his bankruptcy case and sought damages for violation of the discharge injunction based on the correspondence. The bankruptcy court, essentially, held that the correspondence did not violate the discharge injunction because it was sent to the government employer, not to the debtor, and in any event was an attempt to collect in rem rather than in personam.

Judge(s):

Deasey (author), Feeney and Carey.

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