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Englund v. SBS Financial Services, Inc.: BANKRUPTCY - error denying contempt motion; contempt motion can seek money damages without becoming adversarial proceding

United States Bankruptcy Appellate Panel
No. 08-6049
In re: *
Larry Gene Englund and Marianne *
Englund, *
Debtors. *
Larry Gene Englund and Marianne *
Englund, *
* Appeal from the United States
Debtors - Appellants, * Bankruptcy Court for the District of
* South Dakota
v. **
SBS Financial Services, Inc., *
Creditor - Appellee. *
Submitted: January 30, 2009
Filed: February 19, 2009
Before MAHONEY, SCHERMER, and VENTERS, Bankruptcy Judges.
Per Curiam.
This an appeal of the bankruptcy courts order denying the Debtors motion for
contempt against creditor SBS Financial Services, Inc. for alleged violations of the
discharge injunction. The motion was denied on purely procedural grounds; the
1 See, e.g., In re Zumbrun, 88 B.R. 250, 252 (B.A.P. 9th Cir. 1988); In re
Bock, 297 B.R. 22, 32 (Bankr. D. N.C. 1976). See also Budget Service Co. v.
Better Homes of Virginia, 804 F.2d 289, 291 (4th Cir. 1986) (granting motion for
monetary sanctions for violation of automatic stay).
bankruptcy court concluded that the Debtors were required to file an adversary
proceeding under Federal Rule of Bankruptcy Procedure 7001 instead of a motion
because they sought to recover monetary damages from SBS Financial. We have
jurisdiction over this appeal pursuant to 28 U.S.C. 158(b).
Federal Rule of Bankruptcy Procedure 9020 specifically states that motions for
contempt are governed by Rule 9014 the rule under which contested motions are
brought. The fact that a motion for contempt seeks monetary damages does not
transform the action into one that must be pursued as an adversary proceeding.1
Federal Rule of Bankruptcy Procedure 9014 provides essentially the same due process
requirements for contested matters that are applicable to adversary proceedings and
should alleviate any concerns the bankruptcy court might have for the creditors due
process protections.
Accordingly, the bankruptcy courts order is reversed and the matter is
remanded for further proceedings.


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