Case Type:
Case Status:
21-1036 (9th Circuit, Oct 08,2021) Published
The U.S. Bankruptcy Appellate Panel (BAP) affirmed the denial of an order denying the contempt motion filed by chapter 13 debtor Jerome Perryman (DR) against his ex-wife, Karen Dal Poggetto (PG), for violation of the automatic stay, finding her requests for continuances and attendance at status hearings in her prepetition state court action, involving no substantive relief, not to be proscribed continuation of prepetition action and thus willful violations of § 362. After all, § 362 does not require dismissal by a creditor of a prepetition court action post-petition if not relief is sought.
Procedural context:
Prepetition, PG sought an order of sanctions and of execution against the DR in a dissolution proceeding that had been commenced in 2017. Once the DR filed his chapter 13 petition for relief, this action was stayed, but PG and the state court held at least four continued hearings. After the fourth, DR's counsel sent a letter to PG's asserting that the continued hearings were postpetition actions to collect a prepetition debt in violation of the automatic stay. PG's counsel responded that the Request for Order was stayed and would not proceed until the bankruptcy proceeding was adjudicated. And then on the fourth continued hearing date, this attorney asked the state court to continue the Request for Order again until June 17, 2021, pending the outcome of the DR's bankruptcy case. The DR countered by filing in the bankruptcy court a motion for contempt against PG on the basis that her requests for continuances constituted continued prosecution of the Request for Order and were willful violations of the automatic stay under § 362(a)(1) and (5). In opposing the motion, PG argued that attending continued hearings for the purpose of monitoring the status of a bankruptcy case, especially when ordered to do so by the court, did not violate the automatic stay. The bankruptcy court denied the contempt motion as "meritless" and "frivolous" and vacated the scheduled hearing. The DR timely appealed.
It all began when PG filed a petition for dissolution of her marriage with the DR in 2017. Per the parties' marital settlement agreement and the judgment entered in the dissolution proceeding, the DR would receive the marital home, and PG would receive an equalization payment of $29,000. As customarily done, the DR was required to sign a promissory note and deed of trust against the marital home in favor of PG to secure this obligation. Unfortunately, the DR failed to execute the promissory note and deed of trust. PG responded by seeking an order in the dissolution proceeding to effect their execution by the clerk of the state court and awarding her $3,000 in sanctions and $7,000 in attorney's fees. The Request for Order was set for hearing on May 6, 2019. On April 18, 2019, however, the DR filed his chapter 13 bankruptcy case. Soon thereafter, PG received notice of the bankruptcy filing and the notice of stay filed by the DR's counsel in the dissolution proceeding.
Julia W. Brand; Robert J. Faris; and Gary A. Spraker

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