Hann v. Educational Credit Management Corp. (In re Hann)
- Summarized by Guy Moss ,
- 11 years 9 months ago
- Citation:
- United States Court of Appeals for the First Circuit, No. 12-9006, March 29, 2013
- Tag(s):
-
- Ruling:
- Addressing the pitfalls of an unusually phrased order, the Court affirmed lower court rulings and concluded that when an order imprecisely "allows" a claim at zero (rather than disallowing the claim based on the absence of debt) after a full hearing addressing whether any debt at all existed, the record may be combed on appeal to ascertain the judge's intention in lieu of returning the case to the authorizing court for clarification, an alternative approach not available here. In this case, because the trial court had carefully sought to determine whether the loan claims were paid in full pre-petition, there was a determination for all relevant purposes that no debt existed and, accordingly, dischargeability was no longer relevant. And, while a party should normally not be sanctioned for violating an ambiguous order, sanctions are appropriate under 11 U.S.C. sec.105 when the party's "entire course of conduct," as here, shows an abuse of the bankruptcy process.
- Procedural context:
- Appeal from the Bankruptcy Appellate Panel for the First Circuit of an order affirming a ruling of the U.S. Bankruptcy Court for the District of New Hampshire in a post-Chapter 13 adversary proceeding addressing efforts by a creditor to collect an allegedly non-discharged debt.
- Facts:
- During her Chaper 13 case, the Debtor (Hann) objected to the claim of ECMC, which asserted that $55,000 in non-dischargeable student loans were owed. Hann contended that the loans had been paid in full. ECMC neither responded nor attended the hearing. Hann testified, and at the Court's request supplemented her testimony with an affidavit. An unusually phrased Order, drafted by Hann's counsel, read "Debtor's objection to [Claim X] is sustained [and allowed] in the amount of $0.00." ECMC later resumed its efforts to collect, which led Hann to reopen the case and file an adversary proceeding seeking damages and an injunction against the collection efforts. ECMC argued that the Order (i) was ambiguous and therefore could not be the basis for sanctions, (ii) had only disallowed the claim against the estate for Chapter 13 purposes, and (iii) did not adjudicate the amount owing or the dischargeability of the claim. The bankruptcy court (a successor judge)concluded that the Order evidenced the conclusion that no debt was owed as of the filing and awarded fees and costs for a violation of the discharge injunction. The BAP affirmed.
- Judge(s):
- Torruella, Stahl and Thompson
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