730 F.3d 1268
11th Cir.2013Background
- Feingold filed a Chapter 7 petition immediately after a Pennsylvania state court entered a judgment against him in disciplinary proceedings.
- The judgment ordered Feingold to pay approximately $44,889.92 for costs and expenses associated with the conservator and disciplinary proceedings.
- The Disciplinary Board sought relief from the automatic stay to enforce its judgment, arguing § 362(b)(4) or, alternatively, § 362(d)(1) for cause.
- The bankruptcy court ruled the debt was dischargeable as compensation for actual pecuniary loss, and thus no relief from stay was warranted.
- The district court reversed, holding the debt nondischargeable under § 523(a)(7) and granting stay relief, and this appeal followed.
- The court ultimately concludes dischargeability is established, but relief from the stay requires consideration of the totality of circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Feingold's debt nondischargeable under § 523(a)(7)? | Feingold | Board | Yes; the debt is nondischargeable under § 523(a)(7). |
| Does nondischargeability alone establish 'cause' to lift the stay under § 362(d)(1)? | Feingold | Board | No; nondischargeability alone is insufficient. |
| May the court rely solely on dischargeability in deciding stay relief without considering the totality of circumstances? | Board | Feingold | No; totality of circumstances required. |
| Should the case be remanded to evaluate stay relief under the totality of circumstances? | Board | Feingold | Yes; remand to assess whether relief is appropriate under the totality of circumstances. |
Key Cases Cited
- In re Taggart, 249 F.3d 987 (9th Cir. 2001) (costs in attorney disciplinary proceedings may be non-dischargeable)
- In re Mu’min, 374 B.R. 149 (Bankr. E.D. Pa. 2007) (dischargeability alone does not justify stay relief)
- In re Dixie Broad., Inc., 871 F.2d 1023 (11th Cir. 1989) (totality-of-circumstances approach to stay relief)
- Kelly v. Robinson, 479 U.S. 36 (1986) (restitution and penal sanctions under § 523(a)(7))
- In re Smith, 317 B.R. 302 (Bankr. D. Md. 2004) (penalty-like nature of disciplinary costs)
- In re Findley, 593 F.3d 1048 (9th Cir. 2010) (attorney disciplinary costs are nondischargeable)
- Richmond v. N.H. Supreme Court Comm. on Prof’l Conduct, 542 F.3d 913 (1st Cir. 2008) (system aims to protect public; penalties promote deterrence)