Rediger Investment Corp. v. H Granados Communications, Inc. (In Re H Granados Communications, Inc.)
503 B.R. 726
| 9th Cir. BAP | 2013Background
- Rediger and Duringer Firm prosecuted state court action against Debtor in 2012 despite Debtor’s Jan. 2012 bankruptcy filing.
- Debtor listed Rediger as creditor and Notice of Bankruptcy was served; notices continued to flow to Rediger during the case.
- Debtor filed a Notice of Stay in state court action on Nov. 1–2, 2012; both Appellants knew of the bankruptcy by that time.
- State court proceedings continued into 2012, resulting in a default judgment and a writ of execution before the stay was remedied.
- DIP funds were levied from Debtor’s bank account; Debtor’s counsel sought release and notified the Duringer Firm.
- Bankruptcy court found willful stay violations, held Appellants in civil contempt under 11 U.S.C. § 105(a), and awarded sanctions totaling $27,072.09, affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the stay violation was willful | Rediger/Duringer argued lack of willfulness. | Granados contends stay violations were willful. | Yes, willful violations were established. |
| Whether the sanctions award under § 105(a) was proper | Damages included attorneys’ fees incurred pursuing damages for the violation. | Charges exceeded proper scope or should be reduced under lodestar. | Sanctions award affirmed; fees reasonable and properly compensatory. |
Key Cases Cited
- In re Dyer, 322 F.3d 1178 (9th Cir. 2003) (abuse of discretion standard for civil contempt; willfulness defined)
- Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010) (damages scope under § 362(k); civil contempt context)
- Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002) (actual damages and fees for discharge injunction violations)
- Espinosa v. United Student Aid Funds, Inc., 559 U.S. 260 (U.S. 2010) (discharge injunction civil contempt; award of fees)