IN RE: STEVEN RICHARD ALECKNA; JAIME SUE ALECKNA
- Case Type:
- Case Status:
- No. 20-1309 (3rd Circuit, Sep 09,2021) Published
- Addressing the effect of the 2005 amendment to 11 U.S.C. § 362, the Third Circuit's decision in In re University Medical Center, 973 F.2d 1065 (3d Cir. 1992), remains good law so that a creditor has a defense to the "willfulness" requirement of § 362(k)(1) if the creditor can show that its actions were in subjective good faith and resulted from a rational belief, based on persuasive authority, that its actions were lawful. Nonetheless, the creditor's actions in this case were willful because the creditor did not rely on persuasive authority for its actions.
- Procedural context:
- California Coast University appealed from the district court's order affirming the bankruptcy court's order awarding attorney's fees and other relief to Jamie Aleckna for CCU's violation of the automatic stay.
- Before bankruptcy, Jamie Aleckna was a student at California Coast University ("CCU"). She still owed CCU tuition when she filed her chapter 13 bankruptcy petition. Jamie informed CCU that she had filed bankruptcy and asked CCU to send her a transcript. CCU sent an incomplete transcript that did not show her graduation date. CCU informed Jamie that she was not entitled to a full transcript because there was a "financial hold" on her account.
CCU explained that, as "a matter of policy," CCU considers any student who is not current on his or her payment obligations "to have not technically graduated and [that CCU] may withhold the student's transcript or diploma as a result."
CCU filed an action in the bankruptcy case seeking to have Jamie's debt deemed to be a non-dischargeable student loan. Jamie filed a counterclaim against CCU, arguing that (i) CCU violated the automatic stay by refusing to give her a full, certified transcript and (ii) the debt was dischargeable.
CCU then dismissed its non-dischargeability complaint with prejudice.
- GREENAWAY, JR., SHWARTZ, and FUENTES
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!