596 B.R. 554
6th Cir. BAP2019Background
- Debtor Lawrence Wohleber filed Chapter 13 after a state domestic relations court had found him in contempt for failing to pay a pre-petition property‑settlement judgment and set an October 8, 2013 hearing to sentence him to jail unless he paid (he filed bankruptcy between the purge date and that hearing).
- At the October 8 hearing the state judge, having researched the stay, proceeded to jail Wohleber for 30 days; he was released 10 days later by agreement that held the sentence in abeyance pending bankruptcy resolution.
- Wohleber later dismissed that bankruptcy, was jailed briefly, then filed a second bankruptcy and sued his ex‑wife (Skurko) and her attorney (Gentile) under 11 U.S.C. § 362(k) for willful violation of the automatic stay for allowing the post‑petition sentencing/confinement to proceed.
- The bankruptcy court granted judgment on partial evidence for Skurko and Gentile, finding (1) they took no affirmative collection action post‑petition and (2) they could not have stopped the state judge from sentencing because the contempt finding had already been entered.
- On appeal the Panel (6th Cir. BAP) reversed: it held the sentencing and confinement were stay violations (the contempt was civil/coercive and purgeable), creditors have an affirmative duty to act to halt post‑petition enforcement of pre‑petition civil contempt orders, and remanded for determinations whether Skurko and Gentile breached that duty and, if so, damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether continuing a contempt sentencing hearing held post‑petition (after pre‑petition contempt finding) violated § 362(a) | Wohleber: sentencing to coerce payment of a pre‑petition property settlement continued a proceeding to collect a debt and thus violated the stay | Skurko/Gentile: sentencing was an act of the state court (not creditor), possibly criminal contempt or a court‑dignity exception, so not stayed | Held: Violation. Contempt was civil/coercive (purgeable) and subject to the automatic stay; no applicable statutory or court‑made exception justified confinement |
| Whether creditor and counsel who did not take steps to stop the state court violated the stay | Wohleber: creditors must take affirmative steps (motion to stay, relief from stay, vacatur, agreed abeyance) to prevent post‑petition enforcement | Skurko/Gentile: once contempt was found their involvement ended; state court independently chose to proceed; burden was on debtor's counsel to persuade the judge | Held: Duty on creditor/counsel to act to halt enforcement. Their inaction can constitute a stay violation; remand to determine if they breached that duty |
| Whether Rooker–Feldman or related preclusion deprived bankruptcy court jurisdiction to hear stay claim | Wohleber: federal court has jurisdiction to adjudicate stay violations despite parallel state proceeding | Defendants/State judge: Rooker–Feldman bars federal review of state‑court rulings that the stay does not apply | Held: Rooker–Feldman does not apply here (parallel proceedings); bankruptcy court had jurisdiction to hear stay claim |
| Whether any court‑made exception (upholding court dignity) permits state court to jail debtor for dischargeable debt despite stay | Wohleber: no evidence confinement served court‑dignity purpose; record shows coercion to collect payment | Skurko/Gentile: state court had inherent power to protect its dignity and proceed | Held: Exception inapplicable where confinement enforces a dischargeable money judgment; allowing it would eviscerate the stay |
Key Cases Cited
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (Rooker–Feldman does not convert concurrent jurisdiction into a bar; state and federal proceedings can be parallel)
- Hicks v. Feiock, 485 U.S. 624 (U.S. 1988) (distinguishes civil contempt from criminal: conditional incarceration to coerce compliance is civil)
- Dominic's Rest. of Dayton, Inc. v. Mantia, 683 F.3d 757 (6th Cir. 2012) (recognizes limited court‑made exceptions but confirms bankruptcy court has exclusive stay‑relief authority)
- Easley v. Pettibone Mich. Corp., 990 F.2d 905 (6th Cir. 1993) (actions taken in violation of the stay may be void or voidable; equitable exceptions are limited)