In an unpublished decision (In re Grihalva 2013 WL 5311227), Chief Bankruptcy Judge Mike K. Nakagawa held parties in contempt for violating the discharge injunction. The creditors filed a judicial foreclosure action but in its prayer sought judgment only against the Debtor for over $584,000, costs and fees. However, within the complaint the Creditor indicated that no deficiency judgment will be sought against the Debtor.
The Court found that the creditor and its counsel placed the debtor in an untenable position by engaging in conduct inconsistent with the discharge. Since the creditor never amended the complaint after being put on notice, the violation of the discharge injunction was continuing.
The Court found both counsel and the creditor jointly and severally liable for $5919.90 and a fine of $10,000.00.
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