Barrientos v. Wells Fargo Bank, N.A.
633 F.3d 1186
| 9th Cir. | 2011Background
- Barrientos filed for Chapter 7 discharge under 11 U.S.C. § 524.
- Credit reporting agencies allegedly continued reporting the discharged debt to Wells Fargo.
- Upon disputes, agencies contacted Wells Fargo, which allegedly verified an $80,831 debt in violation of § 524.
- Barrientos filed an adversary complaint on April 27, 2007 seeking contempt, injunction, coercive fine, declaratory relief, and fees.
- Bankruptcy court dismissed the FAAC on January 31, 2008 under Walls v. Wells Fargo Bank, N.A. for lack of a private § 105 action; district court affirmed in 2009, directing relief via contempt in bankruptcy court.
- Ninth Circuit affirms that contempt for § 524 violations must be sought by motion in the bankruptcy case, not via an adversary proceeding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is a private right of action for §524 violations. | Barrientos argues Walls permits some enforcement beyond a private damages action. | Wells Fargo contends there is no private right of action for damages under §524. | No private right of action; contempt must be in bankruptcy court. |
| Whether adversary proceedings can enforce a discharge violation. | Adversary proceeding could pursue contempt for discharge violations. | Such relief must be sought as a contempt motion in bankruptcy court. | Contempt for §524 violations must be pursued via motion in the bankruptcy case, not an adversary proceeding. |
| Whether contempt proceedings fall under Rule 9020 vs Rule 9014 procedures. | Contempt must be initiated by motion under Rule 9014; Rule 9020 governs these procedures. | ||
| Whether the case is an adversary proceeding or a contested matter for contempt. | FAAC was an appropriate vehicle for contempt. | FAAC does not fit Rule 7001 categories; contempt is a contested matter. | Contempt proceedings are contested matters not qualifying as adversary proceedings; must proceed by motion. |
Key Cases Cited
- Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002) (discharge injunction cannot be privately enforceable as damages)
- In re Kalikow, 602 F.3d 82 (2d Cir. 2010) (contempt for discharge enforcement must be by motion in bankruptcy court)
- Solow v. Kalikow, 602 F.3d 82 (2d Cir. 2010) (affirmed bankruptcy court’s motion-based contempt approach)
- Barclay v. Mackenzie (In re AFI Holding, Inc.), 525 F.3d 700 (9th Cir. 2008) (standard of review for bankruptcy court decisions on claims)