576 B.R. 1
Bankr. N.D. Cal.2017Background
- Debtor Parker filed Chapter 13 on Oct 8, 2014, confirmed a plan (surrendering Unit 990 to secured creditors) and received discharge on Dec 1, 2015; BCOA (HOA) received notice of both filing and discharge.
- Unit 990 was subject to recorded CC&Rs; Parker listed BCOA’s disputed HOA lien on her schedules; the unit was in foreclosure at petition and Parker vacated in Nov 2014.
- The confirmed plan revested title in Parker and provided stay relief to secured creditors; BCOA nevertheless sought relief-from-stay (granted) and later filed notices/continued Alameda County litigation until Jan 27, 2017.
- Post-petition, BCOA: sent late-payment invoices (Dec 2014/Jan 2015), made retroactive assessments (May 2015), levied disciplinary fines, proposed and adopted June 2015 CC&Rs amendments authorizing leasing of “abandoned” units, leased Unit 990 for $5,000/mo, and recorded further amendments and bylaws in 2016.
- Parker alleges these acts were efforts to collect prepetition debt in violation of the automatic stay (§ 362) and the discharge injunction (§ 524), and seeks damages under §§ 362(k) and 105.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did BCOA’s postpetition settlement offer and communications violate the automatic stay (§ 362(a)(1))? | Parker: the Oct 2014 settlement offer was coercive, aimed to collect prepetition debt. | BCOA: merely negotiation; filed notice of stay in state court and did not continue litigation. | Settlement offer: summary judgment denied (could be coercive). Alameda County litigation: summary judgment for BCOA (notice of stay filed satisfied Eskanos & Adler). |
| Do postpetition invoices and retroactive assessments violate the stay (§ 362(a)(6))? | Parker: invoices and retroactive assessments sought prepetition amounts and were stay violations. | BCOA: assessments/collection rights under CC&Rs; some postpetition obligations collectible without stay relief. | Summary judgment denied as to Dec 2014/Jan 2015 invoices and May 2015 retroactive assessments (material factual disputes). |
| Did BCOA’s fines, increased assessments, leasing of Unit 990, and CC&R amendments violate the stay or constitute willful conduct under § 362(k) / § 105? | Parker: fines and amendments were pretextual efforts to recoup prepetition losses; leasing without credit to Parker coerced payment. | BCOA: authorized to assess postpetition; plan revested title so it could collect postpetition dues; relief-from-stay order limited and did not authorize all actions. | Summary judgment denied on many of these claims—material disputes exist about motive and whether acts were attempts to collect prepetition debt; some acts may be lawful but facts are contested. |
| Do post-discharge acts (invoices Apr 2, 2016; leasing revenue; annexations; bylaw amendments) violate the discharge injunction (§ 524/a contempt under § 105)? | Parker: post-discharge invoices, continued leasing/annexations and some bylaw amendments were intended to collect discharged debts. | BCOA: many amendments affected all members; actions served legitimate association interests and were not attempts to collect discharged debt. | Court denied summary judgment on April 2, 2016 invoice, leasing, annexations, failure to dismiss Alameda litigation—material facts exist whether acts coerced payment. Summary judgment granted as to several bylaw amendments that were general or unrelated (e.g., insurance tender, frivolous-suit fine). |
| Standard for willfulness / contempt: what must Parker prove for § 362(k) vs § 105? | Parker: BCOA knew stay/discharge and intended acts. | BCOA: may have had good-faith beliefs; some actions authorized by CC&Rs or court order. | Court: § 362(k) requires knowledge of stay and intentional act (no specific intent). § 105 contempt requires clear and convincing proof that respondent knew stay/discharge applied to the specific act; summary judgment denied on § 105 claims except for Alameda litigation. |
| Are equitable defenses (mitigation, judicial estoppel) available to BCOA to bar Parker’s claims? | N/A (Parker argues actions caused claims). | BCOA: mitigation and judicial estoppel should preclude claims. | Court rejected these defenses at summary judgment—factual disputes remain about parties’ conduct and prior positions. |
Key Cases Cited
- Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210 (9th Cir.) (creditor must stay or dismiss state-court litigation after learning of bankruptcy)
- In re Jamo, 283 F.3d 392 (1st Cir.) (postpetition negotiations permitted but coercive tactics may violate the automatic stay)
- In re Diamond, 346 F.3d 224 (1st Cir.) (distinguishing permissible negotiation from stay violations)
- In re Jones, 657 F.3d 921 (9th Cir.) (HOA may collect postpetition assessments without stay relief when debtor retains ownership)
- Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir.) (discharge enforcement via contempt under § 105; compensatory contempt remedies)
- In re Zilog, Inc., 450 F.3d 996 (9th Cir.) (elements for contempt for violation of bankruptcy orders)
- Paul v. Iglehart (In re Paul), 534 F.3d 1303 (10th Cir.) (discharge violation inquiry focuses on whether creditor’s conduct objectively coerced payment of discharged debt)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S.) (summary judgment standards and inferences)
- In re Peralta, 317 B.R. 381 (9th Cir. BAP) (willfulness under § 362 requires knowledge of stay and intentional act)