Hazelton v. The Board of Regents for the University of Wisconsin System

Case Type:
Consumer
Case Status:
Dismissed
Citation:
No. 19-1405 (7th Circuit, Mar 16,2020) Published
Tag(s):
Ruling:
The Seventh Circuit Court of Appeals dismissed the Appellant’s appeal, finding that the Court lacked jurisdiction to hear the appeal under 28 U.SC. § 158(d)(1) because the district court’s order did not “finally” resolve the parties’ discharge injunction sanctions dispute.
Procedural context:
The bankruptcy court denied the debtors’ motion for sanctions, finding that their debt was a student loan and therefore, non-dischargeable. The debtors appealed. The district court rejected the bankruptcy court’s classification of the debt as a non-dischargeable student loan, and reversed and remanded the sanctions dispute to the bankruptcy court. The University of Wisconsin-Stout (“UW-Stout”) appealed. The 7th Circuit found that it lacked jurisdiction to hear UW-Stout’s appeal and dismissed it.
Facts:
A husband and wife jointly filed for Chapter 7 bankruptcy and received a discharge. Post-discharge, UW-Stout collected the tuition debt owed by intercepting the debtors’ joint 2016 income-tax refund. The debtors reopened their bankruptcy case and filed a motion for sanctions against UW-Stout, alleging the university violated the discharge injunction when it collected their tuition debt after their debts were discharged. The bankruptcy court denied the debtors’ motion for sanctions, finding that their tuition debt classified as a non-dischargeable student loan. The debtors appealed. The district court rejected the bankruptcy court’s classification of the debt as a non-dischargeable student loan, and reversed and remanded the sanctions dispute to the bankruptcy court. UW-Stout appealed. The 7th Circuit found that while the bankruptcy court’s decision on the sanctions dispute was “final” under 28 U.SC. § 158(a)(1), the district court did not “finally” resolve the sanctions dispute when it ruled on the dischargeability issue and remanded the sanctions dispute to the bankruptcy court. Thus, the 7th Circuit held that it lacked jurisdiction to hear UW-Stout’s appeal under 28 U.SC. § 158(d)(1) and dismissed the appeal.
Judge(s):
Ripple, Rovner and Sykes, Circuit Judges

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