In re: Jose J. Hernandez
SC-13-1301-PaJuKu
| 9th Cir. BAP | Apr 4, 2014Background
- Hernandez’s 2002 San Diego judgment for First Select, later renewed in 2008, was enforced by Collect via a writ of execution in 2011.
- Sheriff service in 2011 yielded $712.39 from Hernandez’s funds before turnover disputes.
- Hernandez, in bankruptcy under Chapter 7 filed Sept. 27, 2011, claimed the seized funds as exempt assets.
- Bankruptcy court issued turnover orders directing Collect to return funds; funds were transferred to Zee Group, Collect’s attorney.
- Collect challenged turnover; Hernandez sought damages under §362(k) for stay violation; the court granted turnover and later awarded damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contempt was proper for Collect’s failure to comply with the Attorney Fee Order | Hernandez: Collect willfully violated a definite order; contempt appropriate | Collect: Attorney Fee Order is a money judgment enforceable by execution | Contempt affirmed; willful noncompliance supported by clear and convincing evidence |
| Whether the Attorney Fee Order is a money judgment enforceable by Civil Rule 69(a) | Hernandez: order was compensatory sanction not ordinary judgment | Collect: order should be enforced as a money judgment | Order not treated as ordinary money judgment; contempt proper under sanctions authority |
| Whether Sternberg limits recovery to §362(k) damages or allows 105(a) damages | Hernandez: allowed damages under §362(k) and §105(a) | Collect: Sternberg restricts to §362(k) | Recovery permissible under §362(k) and §105(a) based on context; Sternberg does not limit to §362(k) only |
| Whether the Attorney Fee Order and the Contempt Order were lawful and within the court’s power | Hernandez: orders enforceable via contempt for misconduct | Collect: may challenge legality of orders | Court did not abuse discretion; Collect knowingly violated a valid order |
| Whether contempt damages could be awarded as compensatory rather than punitive | Hernandez: compensatory fees for stay violation | Collect: damages limited to stay violation with procedural constraints | Damages awarded as compensatory sanctions for stay violation; no abuse of discretion |
Key Cases Cited
- Maness v. Meyers, 419 F.2d 449 (U.S. 1975) (governs compliance with court orders pending appeal)
- Espinosa v. United Student Aid Funds, 553 F.3d 1193 (9th Cir. 2008) ( creditor cannot ignore a bankruptcy order pending appeal; stay rules apply)
- In re Wallace, 490 B.R. 898 (9th Cir. BAP 2013) (contempt sanctions not ordinary money judgments; contempt proper)
- Rosales v. Wallace (In re Wallace), 490 B.R. 898 (9th Cir. BAP 2013) (panel rejects treating sanctions as money judgments enforceable only by execution)
- Shuffler v. Heritage Bank, 720 F.2d 1141 (9th Cir. 1983) (enforcement of sanctions; contempt authority cited)
- Hilao v. Estate of Marcos, 95 F.3d 848 (9th Cir. 1996) (context of enforcing large judgments; Civil Rule 69(a) relevance)
- Crystal Palace v. Mark Twain Indus., Inc., 817 F.2d 1361 (9th Cir. 1987) (order enforcement context in contempt discussions)