Bloom, In re, 88-5956

• Citation: 875 F.2d 224
• Decision Date: 15 May 1989
• Docket Number: No. 88-5956,88-5956
• Parties: In re Edith BLOOM, M.D., Debtor. William A. GOICHMAN, Plaintiff-Appellant, v. Edith BLOOM, M.D., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 224

875 F.2d 224 19 Bankr.Ct.Dec. 590 In re Edith BLOOM, M.D., Debtor.
William A. GOICHMAN, Plaintiff-Appellant,
v.
Edith BLOOM, M.D., Defendant-Appellee. No. 88-5956. United States Court of Appeals,
Ninth Circuit. Argued and Submitted Feb. 9, 1989.
Decided May 15, 1989.

Page 225

William A. Goichman, Encino, Cal., for plaintiff-appellant.

Richard M. Moneymaker, Moneymaker & Kelley, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, FARRIS and BEEZER, Circuit Judges.

OPINION

BEEZER, Circuit Judge:

William Goichman appeals an award of compensatory damages, attorney's fees, and punitive damages under 11 U.S.C. Sec. 362(h). Section 362(h) ¹ has received almost no scrutiny in our published opinions. We affirm in part, and remand for determination of the rate of interest.

FACTS

Goichman, Edith Bloom, and others invested money in a series of limited partnerships that failed. Litigation in state and federal courts resulted in a consent decree under which Bloom was obligated to pay the first $70,000 of any liability found against Goichman as a result of certain transactions. Goichman executed a levy on Bloom's salary. Bloom filed a claim of exemption in federal district court; the matter was referred to a magistrate. A hearing was set and Goichman noticed a deposition of Bloom. Bloom failed to attend the deposition. Between the date noticed for deposition and the date set for the exemption hearing, Bloom filed her bankruptcy petition. Goichman was scheduled as a creditor and attended the bankruptcy court examinations.

After he was notified of Bloom's bankruptcy petition, Goichman attended the hearing on Bloom's pending claim of exemption. Bloom did not attend and was not represented at any of the nonbankruptcy hearings. Bloom's claim was dismissed and $16,000 was paid over to Goichman.

Goichman then filed a motion in the district court asking that Bloom be found in contempt and for specific relief. The district court ordered Bloom to convey partnership assets to Goichman as security for his prebankruptcy-petition judgment. The district judge also told Goichman she would fine Bloom $500 for contempt due to Bloom's failure to attend depositions. The district court made a minute entry of the fine and asked Goichman to contact Bloom's counsel. The fine, however, was not included in the final written order.

Bloom subsequently moved against Goichman in bankruptcy court for violation of the automatic stay. Goichman responded by filing a motion in the district court asking that court to withdraw the reference. Meanwhile, as part of the administration of Bloom's bankruptcy proceedings, the bankruptcy court partially upheld Bloom's claim of exemption and awarded her title to $8,250 of the funds that the federal magistrate had ordered be paid over to Goichman. ²

In sum, two separate proceedings form the factual basis for this appeal. In the federal district court, and before a magistrate, Goichman obtained a levy on Bloom's salary, obtained security on a consent decree, received a minute entry--but not a written order--holding Bloom in contempt, and filed a motion to withdraw the reference. In bankruptcy court, Bloom filed a petition for bankruptcy, won a partial claim

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of exemption from the levy on her salary, and sued Goichman for violation of the automatic stay.

Bloom prevailed on her complaint against Goichman in bankruptcy court. Specifically, it found that Goichman "willfully and contumaciously" violated the automatic stay provisions of 11 U.S.C. Sec. 362 and awarded compensatory damages, attorney's fees, and punitive damages. Goichman appealed to the district court, which adopted the findings of the bankruptcy court. Goichman now appeals to this court.

DISCUSSION A

Goichman contends that moving to hold Bloom in contempt and attending the hearing did not violate the automatic stay provision of the Bankruptcy Code. He relies primarily on David v. Hooker, Ltd., which concluded

despite filing of the bankruptcy petition and the broad language of [the automatic stay rule], it was entirely consistent for the trial court to grant a stay of the principal proceedings but to continue to order the [defendant] to comply with a prior discovery order.... Pursuant to that limited continuation of a collateral aspect of litigation, it was also within the trial judge's power to consider whether the defendant and its agent were in contempt of court....

560 F.2d 412, 418 (9th Cir.1977).

Hooker does not offer ironclad protection to Goichman. The automatic stay is intended to give "the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions" S.Rep. No. 989, 95th Cong., 2d Sess. 54, reprinted in 1978 U.S.Code Cong. & Admin. News 5787, 5840. Thus, if Goichman filed the contempt motion with the purpose of securing assets protected by the stay or harassing Bloom, he is not protected.

The bankruptcy court did not make a specific finding that Goichman was attempting to harass Bloom. Goichman's motion, however, was not merely a motion to hold Bloom in contempt. Among other things, Goichman moved to appoint a receiver for Bloom's estate, to order Bloom to comply with the prebankruptcy consent decree, to strike Bloom's claim of exemption, and to order transfer of certain Florida properties to himself. On its face, the motion patently violates the spirit and letter of section 362. See Morgan Guaranty Trust Co. v. American Savings and Loan Ass'n., 804 F.2d 1487, 1491 (9th Cir.1986), cert. denied, 482 U.S. 929, 107 S.Ct. 3214, 96 L.Ed.2d 701...