California Appellate Tracker

In re Taggart (Lorenzen v. Taggart)

May 22, 2018

Creditors of a bankrupt debtor could not be held in contempt of the discharge injunction and sanctioned for filing post-petition motions in a state court action for an award of attorney fees against the debtor, since they had a good faith (albeit incorrect and unreasonable) belief that the injunction did not apply.

The BAP correctly held that creditors could not be held in contempt of the discharge injunction and sanctioned for filing post-petition motions in a state court action for an award of attorney fees against the debtor. The creditors had a subjective good faith belief that the discharge injunction did not apply because the debtor had, in their view, “returned to the fray” of the state court litigation after his discharge. Though incorrect, that view was a good faith belief that, even if unreasonable, insulated the creditors from a finding of contempt.

Ninth Circuit Court of Appeals (Bea, J.); April 23, 2018; 2018 U.S. App. LEXIS 10120

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In re Taggart (Lorenzen v. Taggart)

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