A bankruptcy court in the District of South Carolina found that the objective standard in a civil contempt proceeding, under which the creditor may assert a fair ground of doubt as to whether its conduct violated a court order, applies in the context of a contempt action based on violation of a chapter 13 discharge order. In re Seaver, No. 20-2238 (Bankr. D. S.C. May 13, 2022). Read More
Tag Archive: Contempt
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Taggart Contempt Standard Applies in Chapter 13
Posted by NCBRC - June 21st, 2022
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Ocwen To Show Cause Why It Shouldn’t Be Held in Contempt
Posted by NCBRC - November 7th, 2017
Ocwen’s misconduct led the bankruptcy court to not only grant the debtor’s motion for temporary restraining order but to order Ocwen, as servicer for U.S. Bank, to show cause why it should not be held in contempt for violation of a Consent Order entered between the debtor and lender during her chapter 13 bankruptcy. Arrington v. Ocwen Loan Servicing, LLC, No. 12-70435, Adv. Proc. No. 17-70029 (Bankr. N.D. Ala. Sept. 25, 2017). Read More
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Governmental Regulatory Exception to Automatic Stay Applies to Contempt Proceeding
Posted by NCBRC - April 24th, 2017
“Civil contempt proceedings are exempted from the automatic stay under the government regulatory exemption when the proceedings are intended to effectuate the court’s public policy interest in deterring litigation misconduct.” Dingley v. Yellow Logistics, LLC, No. 14-60055 (9th Cir. April 3, 2017).
The underlying Nevada state court litigation arose out of a dispute in between Mark Dingley’s towing company and two transportation companies, Yellow Logistics, LLC, and Yellow Express, LLC, (Yellow) in which Yellow sued Mr. Dingley for improper towing, storage and sale of one of Yellow’s trucks. The Nevada court ordered $4,000 in discovery sanctions against Mr. Dingley when he failed to appear for a scheduled deposition. When he then failed to pay the sanction the court ordered Mr. Dingley to show cause why he should not be held in contempt. Mr. Dingley filed for chapter 7 bankruptcy before the contempt issue came to hearing. Yellow filed a brief in the state court arguing that the automatic stay did not apply to prevent the ongoing contempt litigation. Mr. Dingley responded with a complaint in the bankruptcy court arguing that Yellow’s state court brief violated the automatic stay. The bankruptcy court agreed with Mr. Dingley and awarded sanctions. Read More
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Going to Jail for Being Poor
Posted by NCBRC - May 21st, 2014
NPR did a story this week about how the poor are being saddled by increasing fees associated with the criminal justice system. The story highlights a disturbing trend in which people are facing jail time that is disproportionate to their crime because they are too poor to pay assessed fees, such as electronic monitoring fees, collection fees, probation fees, and public defender fees. A case currently pending before the Third Circuit Court of Appeals, In re Lopez, challenges lower court decisions holding that such fees are non-dischargeable fines and penalties. In Lopez, the debtor does not contest the nondischargeability of his restitution debt, but he does argue that more than $1,000 in costs for items such as the Judicial Computer Project, Firearm Education and Training Fund, collection fees, etc. are dischargeable. Last week, the Bankruptcy Court for the Western District of Missouri in In re Miller, 2014 WL 2012828 (Bankr. W.D. Mo. May 15, 2014) adopted an argument similar to that made by Lopez and held that such fees did not constitute a “fine, penalty or forfeiture” because the purpose of imposing the fees is not penal in nature.
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Debtor’s Prison in the 21st Century?
Posted by NCBRC - March 27th, 2014
Prof. Vivian Berger, Nash Professor of Law Emerita at Columbia Law School, writes here about the misuse of civil contempt proceedings to obtain the repayment of debts. She’s right that despite our common belief that debtors’ prisons have been eliminated in America, it just isn’t so.
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