In re: Gil Kabiling and Linda Kabiling, NV-15-1380-BDF

Gil and Linda Kabiling (Debtors) owned a condo subject to Desert Pine Villas HOA liens for unpaid prepetition assessments; Alessi & Koenig represented Desert Pines.
Debtors filed Chapter 7 on Feb. 1, 2011, listed Alessi & Koenig on Schedule F, and received a discharge on June 28, 2011; the Discharge Order was served on Alessi & Koenig.
Desert Pines nonjudicially foreclosed in 2013 and acquired title to the property.
On Dec. 15, 2014 Desert Pines (through Alessi & Koenig) filed a quiet-title complaint naming the Debtors and seeking attorneys’ fees; the complaint alleged prepetition assessment delinquencies but did not disclose the bankruptcy discharge.
Debtors moved for contempt, arguing the complaint violated the § 524 discharge injunction; the bankruptcy court found Desert Pines knew of the discharge, intended to file the complaint, and willfully violated the injunction, awarding compensatory damages of $8,928.00.
The BAP affirmed the bankruptcy court’s contempt finding and damages award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Desert Pines willfully violated the § 524 discharge injunction	Debtors: filing and serving the quiet-title complaint that alleged prepetition delinquencies and sought attorneys’ fees violated the discharge; Desert Pines had actual knowledge of the discharge.	Desert Pines: the complaint sought only title relief (not to collect money from the Debtors) and did not violate the discharge; attorneys’ fees sought were not necessarily prepetition claims.	Court held Desert Pines willfully violated § 524 because it knew of the discharge, intentionally filed the complaint based on prepetition facts, and sought attorneys’ fees that reasonably arose from prepetition obligations.

ZiLOG, Inc. v. Corning (In re ZiLOG, Inc.), 450 F.3d 996 (9th Cir. 2006) (two-part test for knowing and willful violation of discharge injunction).
United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (abuse-of-discretion standard framework and review steps).
Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178 (9th Cir. 2003) (intentional act standard for discharge/automatic-stay violations; specific intent not required).
O’Loghlin v. County of Orange, 229 F.3d 871 (9th Cir. 2000) (claim arises at time of events giving rise to claim for discharge purposes).
SNTL Corp. v. Centre Ins. Co. (In re SNTL Corp.), 571 F.3d 826 (9th Cir. 2009) (federal law determines whether claim arose pre- or postpetition).
Renwick v. Bennett (In re Bennett), 298 F.3d 1059 (9th Cir. 2002) (availability of § 105 civil contempt sanctions to enforce discharge injunction).