Frambes v. Nuvell National Auto Finance, LLC (In Re Frambes)
454 B.R. 437
Bankr. E.D. Ky.2011Background
- Debtor filed Chapter 7 petition Nov 24, 2008 and listed Nuvell as a creditor with secured debt on a 2007 Cadillac Escalade.
- Debtor entered into a reaffirmation with Nuvell Jan 6, 2009, later withdrawn, and Escalade lien was later deemed unperfected.
- Bankruptcy court voided Nuvell's lien and ordered Escalade turnover to Trustee on Apr 15, 2009; sale approved Jul 13, 2009.
- Discharge entered Mar 6, 2010; clerk issued notice of discharge to creditors Mar 8, 2010.
- CCB attempted to collect the discharged Escalade debt Oct 2010 and phone calls continued through Nov 2010, despite discharge; Debtor moved to reopen in Jan 2011 to pursue sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discharge-injunction violations may be pursued via an adversary proceeding | Frambes contends an adversary proceeding can seek contempt and damages for § 524 violations. | Defendants rely on Pertuso that no private § 524 action exists and contempt is only via main case. | Count I dismissed; contempt remedy only in main case via motion. |
| Whether the court has jurisdiction over Counts II–III (FDCPA and KCPA) as related to bankruptcy | FDCPA and KCPA claims relate to discharged debts and touch estate administration. | Counts II–III are not under/ arising under title 11 and lack related-to basis; jurisdiction not proper. | Counts II–III dismissed for lack of related-to jurisdiction. |
Key Cases Cited
- Pertuso v. Ford Motor Credit Co., 233 F.3d 417 (6th Cir. 2000) (no private right of action under § 524; discharge violations punished by contempt)
- Miles v. Clarke, 357 B.R. 446 (Bankr. W.D. Ky. 2006) (contempt may award actual damages and fees; sanctions are the remedy)
- In re Motichko, 395 B.R. 25 (Bankr. N.D. Ohio 2008) (adversary proceeding can include contempt for discharge violations; form over substance caution)
- Barrientos v. Wells Fargo Bank, N.A., 633 F.3d 1186 (9th Cir. 2011) (discharged debtor must use main-case contempt motion; no private right in § 524)
- Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002) (emphasizes bankruptcy-court enforcement of discharge injunction via contempt)
- Vienneau v. Saxon Capital, Inc. (In re Vienneau), 410 B.R. 329 (Bankr. D. Mass. 2009) (post-petition FDCPA-like claims not core to estate; lack of related-to jurisdiction)