Wallace v. Rosales (In re Wallace)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
11 years 4 months ago

Citation:

In re Wallace, BAP No. NV-13-1518-JuHlPa (9th Cir. B.A.P. Oct. 28, 2014).

Tag(s):

Ruling:

Chapter 7 debtors are not entitled to an award of attorney fees incurred in defending on appeal the bankruptcy court’s order finding a creditor in contempt for violating the discharge injunction. (Not-for-publication memorandum decision.)

Procedural context:

The bankruptcy court found a creditor in contempt for violating the discharge injunction in this chapter 7 case. The court awarded sanctions to the debtors, consisting of the fee for reopening the case and additional amounts for attorney fees, costs, and punitive damages. On appeal to the BAP, the panel affirmed all but the punitive-damages award. On remand, the bankruptcy court upheld the punitive-damages award and closed the case. The debtors moved to reopen the case and requested additional sanctions of the amount of attorney fees and costs that they incurred in defending the contempt order on appeal. The bankruptcy court entered an order denying the additional fees. The debtors appealed that order, and the BAP affirmed.

Facts:

Although § 105(a) authorized the bankruptcy court to award the debtors actual damages, punitive damages, and attorney fees incurred as sanctions for the creditor’s violation of the discharge injunction, the court lacked authority to award fees incurred by the debtors in defending the sanctions order on appeal. In re Del Mission Ltd., 98 F.3d 1147, 1152-54 (9th Cir. 1996). The BAP’s decision in In re Schwartz-Tallard, 473 B.R. 340 (9th Cir. B.A.P. 2012), aff’d, 751 F.3d 966 (9th Cir. 2014), does not compel a different result, because it dealt with an award of appellate fees under § 362(k)(1), but Del Mission specifically analyzed the bankruptcy court’s discretionary authority to award appellate fees under § 105(a).

Judge(s):

Meredith A. Jury, Mark D. Houle, and Jim D. Pappas, Bankruptcy Judges. (Judge Houle, Bankruptcy Judge for the Central District of California, was sitting by designation.)

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