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Jacob Westley Lara and Tobitha Ann Lara
16-50201
Bankr. N.D. Tex.
Sep 6, 2017
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Background

  • Debtors Jacob and Tobitha Lara filed Chapter 7; they rejected a Vivint home-security lease and notified Vivint of the bankruptcy and automatic stay. Vivint continued collection efforts and attempted collection after the Laras received discharge.
  • On March 27, 2017 the bankruptcy court found Vivint willfully violated the automatic stay and discharge injunction and awarded $500 in actual damages, $24,000 in punitive damages, and $7,480 in attorney’s fees to the Laras.
  • The Memorandum Opinion and Order were served on Vivint’s registered agent/counsel by certified mail; Vivint did not pay or respond before the case closed on April 17, 2017.
  • The Laras moved to reopen the case and filed a show-cause motion seeking contempt for Vivint’s failure to pay the award; notice and hearing were served and the court reopened the case.
  • Vivint did not appear at the June 21, 2017 hearing. The Laras sought additional actual damages, large punitive damages, attorneys’ fees, and arrest orders for Vivint’s principals for contempt.
  • The core question presented was whether civil contempt is a proper remedy to enforce the court’s prior money-damages order (rather than pursuing execution procedures).

Issues

Issue Plaintiff's Argument Defendant's Argument Held
1. Whether contempt is proper to enforce the March 27 money-damages order Lara: Vivint’s failure to respond/pay justifies contempt for disobedience and further sanctions Vivint: The order is a money judgment; enforcement should proceed via execution, not contempt Court: The order is a money judgment; contempt is not appropriate as the first remedy—use execution procedures (Rule 7069/Fed. R. Civ. P. 69)
2. Whether the court may award damages for violations of the discharge injunction akin to § 362(k) stay damages Lara: Court may and did treat discharge violations like stay violations and award damages Vivint: (Implicit) scope of § 362(k) limited to stay; challenge enforcement method Court: It previously awarded damages for discharge violations as it commonly occurs; that award stands, but enforcement must follow judgment-collection rules
3. Whether Vivint’s silence constitutes a continuing violation warranting contempt Lara: Continued silence/nonpayment after service shows ongoing noncompliance supporting contempt Vivint: Silence is not an affirmative continuing violation; no turnover or specified act to enforce Court: Laras did not allege a continuing violation requiring contempt; prior order imposed money damages without an injunctive act, so contempt is not justified

Key Cases Cited

  • Garrett v. Coventry II DDR/Trademark Montgomery Farm, L.P., 777 F.3d 792 (5th Cir.) (describing core bankruptcy proceedings and contempt context)
  • Cleveland Hair Clinic, Inc. v. Puig, 106 F.3d 165 (7th Cir. 1997) (distinguishing contempt for sanctions from enforcement of ordinary money judgments)
  • Andrews v. Roadway Express Inc., 473 F.3d 565 (5th Cir.) (judgment enforcement procedures and Rule 69 practice)
  • Penn Terra Ltd. v. Dep’t of Envtl. Res., 733 F.2d 267 (3d Cir. 1984) (definition and essential elements of a money judgment)
  • Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (U.S.) (characterizing suits seeking sums as money judgments)
Read the full case

Case Details

Case Name: Jacob Westley Lara and Tobitha Ann Lara
Court Name: United States Bankruptcy Court, N.D. Texas
Date Published: Sep 6, 2017
Docket Number: 16-50201
Court Abbreviation: Bankr. N.D. Tex.