Richardson v. Koch Law Firm, P.C.
2014 U.S. App. LEXIS 18503
| 7th Cir. | 2014Background
- Richardson incurred an education debt in 1988; Indiana University sued in state court in May 1998 and secured a trial date for September 7, 2000.
- Richardson filed a bankruptcy petition on September 1, 2000, but did not notify the state court, the creditor, or the Law Firm and did not appear at trial; the state court entered a default judgment.
- The Koch Law Firm attempted to collect; Richardson later alleged FDCPA violations (15 U.S.C. §§ 1692e, 1692f) for enforcing the judgment in violation of the automatic stay (11 U.S.C. § 362) but the firm paused collection upon learning of the bankruptcy.
- Richardson had multiple subsequent bankruptcies (2002–2007) and the Law Firm again desisted during bankruptcy and resumed collection after discharge; the post-2007 collection efforts are the basis of the present suit.
- The district court dismissed the suit under Rooker-Feldman as an improper collateral attack on the state judgment; later the state court vacated its judgment and the bankruptcy court reopened Richardson’s 2000 bankruptcy, ruling any damages claim belonged to the estate.
- The Seventh Circuit modified the district court’s dismissal to a merits disposition and affirmed on the alternative ground that any claim for damages based on enforcement of the judgment belonged to the bankruptcy estate; Richardson forfeited contesting that ground.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rooker–Feldman bars Richardson's FDCPA suit | Richardson: injury comes from post-judgment collection efforts, not the state judgment itself | Law Firm: suit attacks state-court judgment and is barred by Rooker–Feldman | Court: district dismissal under Rooker–Feldman inappropriate after state judgment vacated; court declined to resolve "inextricably intertwined" gloss and moved to merits |
| Whether enforcement efforts violated the automatic stay and give rise to FDCPA damages | Richardson: Law Firm violated § 362 and thus FDCPA by seeking to enforce judgment while bankruptcy pending | Law Firm: ceased collection during bankruptcy; later relied on nondischargeability of student loans (§ 523(a)(8)) and resumed collection after bankruptcy ended | Court: collection after bankruptcy formed the basis of suit; ultimate finding affirmed on different ground (estate ownership), not on FDCPA merits |
| Ownership of any damages claim for post-judgment enforcement | Richardson: he asserts personal FDCPA damages | Law Firm/Bkrtcy court: any such claim accrued to the bankruptcy estate; Richardson failed to disclose the claim in bankruptcy and is estopped | Court: affirmed that the claim belongs to the estate; Richardson forfeited contesting this argument by not responding |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (establishing that only Supreme Court may review state-court judgments)
- District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (extending limits on federal review of state-court judicial decisions)
- Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280 (defining scope of Rooker–Feldman)
- Lance v. Dennis, 546 U.S. 459 (rejecting expansion of Rooker–Feldman beyond its proper scope)
- Cannon–Stokes v. Potter, 453 F.3d 446 (7th Cir.) (preclusion/estoppel principles in bankruptcy disclosure context)
- Massachusetts Mutual Life Insurance Co. v. Ludwig, 426 U.S. 479 (parties may defend judgments on any preserved ground on appeal)
- Morley Construction Co. v. Maryland Casualty Co., 300 U.S. 185 (recognizing longstanding rule about appellate grounds of decision)