MIKE K. NAKAGAWA, Bankruptcy Judge.
On June 22, 2016, the court heard the Motion to Compel Compliance with Court Order, for Additional Sanctions, and to Reduce to Judgment ("Motion"). The appearances of counsel were noted on the record. After arguments were presented, the matter was taken under submission.
On October 17, 2014, Curtis Bryant and Robin Bryant ("Debtors") filed a voluntary Chapter 13 petition. (ECF No. 1).
On April 17, 2015, the court entered its Order on Motion to Determine Willful Violation of the Automatic Stay and Request for Actual Damages, Punitive Damages, Attorney's Fees and Other Sanctions ("Sanction Order"). (ECF No. 86).
On March 28, 2016, an order was entered confirming the Debtors' Chapter 13 plan
On May 2, 2016, Debtors filed the instant Motion. (ECF No. 138). Debtors allege that Smith has made one payment of $100.00 towards the Sanction Order, but refuses to pay the remaining balance of $1,400.00. In addition to requiring Smith to pay that balance, Debtors seek $1,615.00 in legal fees for having to bring their Motion. Whatever additional amount is awarded pursuant to the Motion, Debtors further request that the total amount be reduced to a judgment so that the Debtors may pursue post-judgment collection remedies, such as subjecting Smith to a judgment debtor's examination, issuance of writs of execution on his assets, and the like.
Having been warned in advance that the Debtors' would be seeking further relief from the court to enforce the Sanction Order, on April 27, 2016, Smith had written a letter to the court that was received the following day. (ECF No. 137). In that missive, Smith acknowledged that he had paid only $100.00 of the amount ordered, but asserted that payment of the balance would be an undue hardship. He asserted that his only sources of income are rental proceeds from the Dusty Canyon Property and Social Security payments.
On June 8, 2016, Debtors' Motion came on for duly noticed hearing, but Smith never appeared. The court continued the hearing to June 22, 2016, in order to allow Smith another chance to appear and to allow Debtors' counsel to submit a billing statement for the professional fees incurred in bringing the Motion. On June 13, 2016, that billing statement was filed. (ECF No. 143).
On June 22, 2016, the continued hearing on the Motion was conducted. Debtors' counsel appeared and Smith appeared as well. Other than the letter he submitted before the Motion was filed, Smith filed no other opposition to the Motion. He did, however, orally repeat the matters contained in his letter and also apparently asserted that he no longer receives any income from the business referred to in the Motion.
The court has considered the record in this case as well as the written and oral arguments presented. Based on that consideration, the Motion will be granted under the terms provided below.
Smith did not comply with the Sanction Order. Debtors were protected by the automatic stay under Section 362(a)(3) and Smith violated the statute. The factual circumstances establishing the violation were addressed in the Sanction Order. Damages were awarded by the Sanction Order and Smith never appealed the order. He is bound by that order.
Smith's proof of claim is subject to payment under the terms of the Debtors' confirmed Chapter 13 plan. Debtors are not walking away from their creditors, but have committed their future income for 46 months. Only if they complete their Chapter 13 plan will they receive a discharge of their personal liability on the debts encompassed by the confirmed plan.
Instead of heeding the admonitions of Debtors' counsel, or even seeking the advice of bankruptcy counsel of his own, Smith violated the automatic stay and has now violated the Sanction Order. He claims that he cannot afford to pay what he owes, which sounds strangely similar to the Debtors' claim that they cannot pay their debts, except that the Debtors sought the relief provided by Congress through the Bankruptcy Code. In this case, Smith chose not to listen to Debtors' counsel or to the court, and has no one to blame but himself.
The court will, however, credit Smith for his representation that his means of satisfying the award are limited. The court accepts his representation primarily because Debtors' counsel did not request an evidentiary hearing where Smith would be required to testify under oath. An evidentiary hearing would be limited to a determination of Smith's financial resources and would merely generate further legal expenses to the Debtors. The court therefore will structure the payment of the award to allow Smith to pay a discounted amount by a date certain. In the event Smith fails to pay the discounted amount by that date, he will be required to pay the full amount of the award under a judgment to be entered by the court.
