FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: NANCY ELAINE YBARRA, 

Debtor,

BOEING NORTH AMERICAN, INC., No. 03-56314

Successor for Limited Purposes to BAP No. Rockwell International  CC-02-01356-KBaP Corporation,

Appellant, OPINION

v.

NANCY ELAINE YBARRA,

Appellee. 

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Perris, Klein and Baum, Bankruptcy Judges, Presiding

Submitted March 10, 2005*

Pasadena, California

Filed September 14, 2005

Before: Kim McLane Wardlaw, Richard A. Paez,

Circuit Judges, and Ralph R. Beistline, District Judge.**

Opinion by Judge Paez

*This panel unanimously finds this case suitable for decision without

oral argument. See Fed. R. App. P. 34(a)(2) 

**The Honorable Ralph R. Beistline, United State District Judge for the

District of Alaska, sitting by designation. 

13215
COUNSEL

Wayne R. Terry, Mitchell, Silberberg & Knupp LLP, Los

Angeles, California, for the appellant. 

Nancy Elaine Ybarra, Santa Barbara, California, pro se for the

appellee. 

OPINION

PAEZ, Circuit Judge: 

After filing for bankruptcy protection, Nancy Elaine Ybarra

(“Ybarra”) persuaded a state court to vacate the dismissal of

13218 IN RE: YBARRA
an action she had filed against her former employer Rockwell

International Corporation (“Rockwell”) prior to filing for

bankruptcy. Rockwell prevailed and was awarded attorney

fees and costs by the state court. The bankruptcy court held

that despite Ybarra’s discharge in bankruptcy, Rockwell could

collect the portion of the fees and costs incurred after Ybarra

filed for bankruptcy. In a divided opinion, the Bankruptcy

Appellate Panel of the Ninth Circuit (“BAP”) reversed. The

BAP majority held that the entire award was encompassed in

the discharge. Boeing North American, Inc., as successor to

Rockwell, appealed. We hold that the fees and costs incurred

post-petition were not discharged, and therefore reverse. 

I. Statement of Facts and Procedural History 

In 1988, Ybarra sued Rockwell in Orange County Superior

Court. Ybarra’s Fifth Amended Complaint, filed in April of

1991, asserted two causes of action: 1) employment discrimination in violation of California Government Code section

12940; and 2) violation of the covenant of good faith and fair

dealing. 

On December 10, 1991, Ybarra filed a Chapter 11 bankruptcy petition. Ybarra did not initially schedule the cause of

action against Rockwell. Ybarra v. Boeing N. Am., Inc. (In re

Ybarra), 295 B.R. 609, 611 (BAP 9th Cir. 2003). Rockwell

first learned of the bankruptcy petition in 1993, and thereafter

promptly objected to Ybarra’s disclosure statement and

moved to convert the case to Chapter 7. The bankruptcy court

granted Rockwell’s motion and converted the case in June of

1993. 

The trustee for Ybarra’s Chapter 7 bankruptcy estate agreed

with Rockwell to settle the case via a compromise in which

Rockwell would purchase Ybarra’s cause of action for

$17,500. Id. Although Ybarra objected to the proposed compromise, the bankruptcy court approved it on November 12,

IN RE: YBARRA 13219
1993. Thereafter the state court granted the trustee’s and

Rockwell’s motion to dismiss Ybarra’s lawsuit. 

On September 29, 1993, Ybarra amended her schedule of

exempt property to add the cause of action against Rockwell.

The bankruptcy court sustained Rockwell’s objection to Ybarra’s claim of exemption on February 24, 1994. The BAP

reversed this decision, and we affirmed the BAP. Ybarra v.

Rockwell Int’l Corp. (In re Ybarra), No. 96-55203, 1997 WL

579130 (9th Cir. Aug. 8, 1997). 

On remand, the bankruptcy court ruled that the cause of

action was exempt. The court gave Ybarra the option of either

accepting $17,500 in full satisfaction and release of all claims

against Rockwell (“the Election”), or taking ownership of “all

right, title and interest” in the lawsuit. 

Ybarra elected to take ownership of the cause of action.

Thereafter, Ybarra successfully persuaded the state court to

set aside the dismissal. Ybarra, 295 B.R. at 612. Ultimately,

the state court granted summary judgment in favor of Rockwell. Rockwell then moved for an award of attorney fees and

costs pursuant to California Code of Civil Procedure sections

1032 and 1033.51 and California Government Code sections

12940(a) and 12965(b).2 The state court awarded Rockwell

$456,884.03 in attorney fees and costs. Ybarra appealed, and

the California Court of Appeal affirmed in 2001. Ybarra, 295

B.R. at 612. 

Meanwhile, the bankruptcy court had granted Ybarra a discharge in May of 1998 pursuant to 11 U.S.C. § 727. In light

of the discharge, Rockwell moved the bankruptcy court for

1Section 1032(b) provides for the award of costs to prevailing parties.

Section 1033.5(a)(10) states that attorney fees are allowable costs under

§ 1032 where they are authorized by contract, statute, or law. 

2Section 12965(b) permits a court to award attorney fees and costs to

prevailing parties brought under that section. 

13220 IN RE: YBARRA
leave to enforce its state court award of fees and costs. The

bankruptcy court partially granted Rockwell’s motion, holding that the portion of the award incurred after Ybarra filed

her bankruptcy petition ($159,030.78) was not discharged. It

held that Rockwell was free to collect this “Enforceable

Amount” without violating the discharge injunction of 11

U.S.C. § 524. In awarding Rockwell attorney fees incurred

after the filing of Ybarra’s bankruptcy petition, the bankruptcy court relied on Siegel v. Federal Home Loan Mortgage

Corp., 143 F.3d 525 (9th Cir. 1998), which held that an award

of attorney fees incurred post-petition based on a pre-petition

cause of action was not discharged in bankruptcy. 

Ybarra appealed the bankruptcy court’s decision to the

BAP. The BAP, in a divided decision, reversed, holding that

the entire fee and cost award was discharged in Ybarra’s

bankruptcy. Ybarra, 295 B.R. at 617. The majority opinion

relied on Abercrombie v. Hayden Corp. (In re Abercrombie),

139 F.3d 755 (9th Cir. 1998), and Kadjevich v. Kadjevich (In

re Kadjevich), 220 F.3d 1016 (9th Cir. 2000), both of which

held that claims for post-petition attorney fees could not be

granted administrative expense priority in the distribution of

bankruptcy assets. Ybarra, 295 B.R. at 612-16. This case,

however, involves whether Ybarra’s debt to Rockwell was

discharged, not whether Rockwell’s claim should be accorded

administrative expense priority in the distribution of the bankruptcy estate’s assets. The BAP majority explained that it

relied on the administrative expense priority cases because

they turned on the issue of whether attorney fees were a prepetition claim. Id. at 612. The majority distinguished Siegel

on the ground that it involved a suit commenced post-petition.

Id. at 616. The dissent argued that Siegel should apply

because it involved the discharge of post-petition attorney

fees, which, it reasoned, is a “different concern” from the

issue of administrative expense priority in Abercrombie and

Kadjevich. Ybarra, 295 B.R. at 624 (Baum, J., dissenting).3

Rockwell timely appealed. 

3A concurring opinion by Judge Klein agreed that Abercrombie and

Kadjevich applied, but distinguished Siegel because it involved misconduct on the part of the debtor. Ybarra, 295 B.R. at 617 (Klein, J., concurring). 

IN RE: YBARRA 13221
II. Jurisdiction and Standard of Review 

We have jurisdiction to review decisions of the BAP pursuant to 28 U.S.C. § 158(d). We review BAP decisions de novo,

and we independently review the bankruptcy court’s decision

on appeal from the BAP. Carrillo v. Su (In re Su), 290 F.3d

1140, 1142 (9th Cir. 2002). We review the bankruptcy court’s

conclusions of law de novo, and its findings of fact for clear

error. Id. 

III. Analysis

Ybarra argues that the BAP should be affirmed because the

rule set forth in Abercrombie and Kadjevich applies to this

case. Rockwell advances the BAP dissent’s argument that Siegel controls. As we explain below, we agree with the BAP

dissent’s conclusion that this case is governed by the discharge principles recognized in Siegel, rather than the rules

relating to administrative expense priority claims. Accordingly, we reverse the BAP’s judgment and remand with directions to enter a judgment affirming the bankruptcy court.

Because we conclude that this case is governed by the principles of discharge, we first address this area of bankruptcy law.

A. Discharge Pursuant to 11 U.S.C. § 727 

[1] A Chapter 7 bankruptcy discharge releases the debtor

from personal liability for her pre-bankruptcy debts. United

States v. Hatton (In re Hatton), 220 F.3d 1057, 1059-60 (9th

Cir. 2000); 1 David G. Epstein et al., Bankruptcy § 1-7(e), at

12 (1992). A discharge is the “legal embodiment of the idea

of the fresh start; it is the barrier that keeps the creditors of

old from reaching the wages and other income of the new.”

2 id. § 7-16, at 312. If the debtor receives a discharge, the

creditor will receive only its pro-rata share of the distribution

of the property of the bankruptcy estate. 1 id. § 1-7, at 12. 

13222 IN RE: YBARRA
[2] Specifically, § 727 of the Bankruptcy Code (“the Code”)4

“discharges the debtor from all debts that arose before the

date of the order for relief . . . .” 11 U.S.C. § 727(b). The

Code defines “debt” as “liability on a claim.” § 101(12).

“Claim” is defined as a “right to payment, whether or not such

right is reduced to judgment, liquidated, unliquidated, fixed,

contingent, matured, unmatured, disputed, undisputed, legal,

equitable, secured, or unsecured.” § 101(5)(A). “This ‘broadest possible definition’ of ‘claim’ is designed to ensure that

‘all legal obligations of the debtor, no matter how remote or

contingent, will be able to be dealt with in the bankruptcy

case.’ ” California Dep’t of Health Servs. v. Jensen (In re Jensen), 995 F.2d 925, 929 (9th Cir. 1993) (quoting H.R. Rep.

No. 95-595, at 309 (1978), reprinted in 1978 U.S.C.C.A.N.

5963, 6266; S. Rep. No. 95-598, at 22 (1978), reprinted in

1978 U.S.C.C.A.N. 5787, 5808). 

[3] The filing of a petition under Chapter 7 constitutes an

“order for relief.” See § 301. For the purposes of discharge,

conversion of a case from Chapter 11 to Chapter 7 constitutes

an order for relief, but does not change the date of the filing

of the petition or order of relief. § 348(a). Thus, the relevant

date in this case is December 10, 1991, the date of Ybarra’s

original bankruptcy petition. Rockwell argues that its claim

for attorney fees and costs did not arise before the order of

relief and therefore was not discharged.5

4Title I of the Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92

Stat. 2549, as amended; Title 11 United States Code. 

5The bankruptcy court noted, and on appeal the parties do not dispute,

that none of the § 523 exceptions to discharge apply to this case. See

§ 727(b). Similarly, Rockwell does not argue that the discharge was

improper under § 727(a). Rather, Rockwell argues that its claim was not

discharged because it did not arise before Ybarra filed her petition, the

effective date of the order of relief. 

IN RE: YBARRA 13223
B. When a Claim Arises Under 11 U.S.C. § 727(b) 

[4] “[A] claim arises, for purposes of discharge in bankruptcy, at the time of the events giving rise to the claim . . . .”

O’Loughlin v. County of Orange, 229 F.3d 871, 874 (9th Cir.

2000). For example, in Jensen, we held that environmental

cleanup expenses incurred post-petition arising from prepetition conduct were discharged in bankruptcy. 995 F.2d at

931. In O’Loughlin, alleged violations of the Americans with

Disabilities Act, 42 U.S.C. §§ 12101-12213, that took place

before the date of confirmation6 met the definition of “claim”

and were discharged in Orange County’s bankruptcy, whereas

violations that took place after the date of confirmation were

not discharged. 229 F.3d at 874-75. We reasoned that the

County could not insulate itself from post-confirmation violations, despite its argument that they were part of the same

course of conduct as pre-confirmation violations. Id. at 875.

In Siegel, we addressed the issue of whether attorney fees

incurred post-petition were discharged in bankruptcy.7 There,

mortgagee Freddie Mac foreclosed on a property and filed

suit in federal district court, seeking a deficiency judgment

against Siegel, the mortgagor. Siegel, 143 F.3d at 528. Before

that case went to trial, Siegel filed for bankruptcy. Id. Freddie

Mac filed proofs of claim in the bankruptcy proceeding, to

which Siegel did not object. Id. The bankruptcy court granted

Freddie Mac relief from the automatic stay provisions of 11

U.S.C. § 362 so that it could foreclose on a second property.

Id. Siegel was then granted a discharge. Id. 

6O’Loughlin involved the adjustment of a municipality’s debts, in which

the debtor is discharged from debts that arose before the confirmation of

the adjustment plan. See 11 U.S.C. § 944(b). Thus, the key date was that

of confirmation, rather than the date the petition was filed, as it would

have been in a Chapter 7 case. 

7The Siegel opinion did not clarify whether the case involved a liquidation under Chapter 7, although the BAP later surmised that it did. In re

Good Taste, Inc., 317 B.R. 112, 115 (Bankr. D. Alaska 2004). 

13224 IN RE: YBARRA
After Siegel filed the bankruptcy petition, but two months

prior to the discharge, he sued Freddie Mac in state court,

alleging breach of duties under the deeds of trust. Id. at 528,

531. Freddie Mac removed the case to federal court. Id. at

528. The federal district court granted summary judgment to

Freddie Mac on the ground that the action was barred by the

res judicata effect of the bankruptcy proceeding. Id. The district court awarded Freddie Mac attorney fees incurred in pursuing its rights under the deeds of trust, pursuant to a

provision in the deeds. Id. at 528, 531. 

On appeal, Siegel argued that the claim for attorney fees

was discharged in the bankruptcy proceedings. Id. at 532. We

analyzed the issue under the framework of whether the claim

was “contingent” pursuant to § 101(5)(A). Id. A contingent

claim is “one which the debtor will be called upon to pay only

upon the occurrence or happening of an extrinsic event which

will trigger the liability of the debtor to the alleged creditor.”

Id. (quoting Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305,

306 (9th Cir. 1987)). We reasoned that because, after being

“freed from the untoward effects of the contracts he had

entered into” through the discharge, Siegel voluntarily chose

to “return to the fray and to use the contract as a weapon,” it

was “perfectly just, and within the purposes of bankruptcy, to

allow the same weapon to be used against him.” Id. at 533.

We emphasized Siegel’s post-petition initiation of new litigation:

Siegel’s decision to pursue a whole new course of

litigation made him subject to the strictures of the

attorney’s fee provision. In other words, while his

bankruptcy did protect him from the results of his

past acts, including attorney’s fees associated with

those acts, it did not give him carte blanche to go out

and commence new litigation about the contract

without consequences. 

IN RE: YBARRA 13225
Id. at 534. On the basis of this post-petition voluntary action

on the part of the debtor, we concluded that the award of postpetition attorney fees was not discharged. Id. 

Siegel cited with approval two opinions that shed light on

the boundaries of the definition of “claim” for the purposes of

discharge. Id. at 533. Shure v. Vermont (In re Sure-Snap), 983

F.2d 1015 (11th Cir. 1993), addressed the discharge of debt

under § 1141(d)(1)(A), which discharges a Chapter 11 debtor

from debts that arose before the date of the order confirming

the bankruptcy plan. After filing for bankruptcy but before the

order confirming the plan, the debtor sought a declaration

from the bankruptcy court that its mortgage agreement with

a creditor was void. Shure, 983 F.2d at 1017. The bankruptcy

court upheld the agreement, and then confirmed the Chapter

11 plan one week later. Id. The debtor then appealed, and the

district court affirmed. Id. 

The creditor sought attorney fees and costs incurred in the

appeal pursuant to a contractual provision in the mortgage

agreement. Id. The Eleventh Circuit held that because the

debtor “voluntarily continued to litigate” after confirmation of

the plan, it did so “at the risk of incurring post-confirmation

costs involved in its acts.” Id. at 1018. The court characterized

the appeal as being “initiated” by the debtor, and reasoned

that the creditor “had no choice but to defend.” Id. It therefore

awarded the creditor attorney fees incurred in the postconfirmation appeal, concluding that the fees were not discharged. Id. at 1019. 

In Siegel, 143 F.3d at 533, we also cited In re Hadden, 57

B.R. 187, 190 (Bankr. W.D. Wis. 1986), in which the bankruptcy court declined to discharge attorney fees incurred postpetition. In Hadden, the debtor initiated the state litigation

pre-petition, and voluntarily continued the litigation after filing under Chapter 7. Id. at 188. The bankruptcy court noted

that “bankruptcy was intended to protect the debtor from the

continuing costs of pre-bankruptcy acts but not to insulate the

13226 IN RE: YBARRA
debtor from the costs of post-bankruptcy acts.” Id. at 190. It

therefore balanced the competing policy concerns of providing debtors with a fresh start and preventing post-bankruptcy

acts taken with “impunity.” Id. The court concluded: “If the

debtor chooses to enjoy his fresh start by pursuing prepetition claims which have been exempted, he must do so at

the risk of incurring the post-petition costs involved in his

acts.” Id.; see also Big Yank Corp. v. Liberty Mutual Fire Ins.

Co. (In re Water Valley Finishing, Inc.), 139 F.3d 325, 328

(2d Cir. 1998) (holding that a claim for sanctions in the

amount of attorney fees was not discharged where, postpetition, the debtor rejected the creditor’s settlement offer in

bad faith). 

[5] In sum, we have held that post-petition attorney fee

awards are not discharged where post-petition, the debtor voluntarily “pursue[d] a whole new course of litigation,” commenced litigation, or “return[ed] to the fray” voluntarily.

Siegel, 143 F.3d at 533-34. We have also endorsed the notion

that by voluntarily continuing to pursue litigation postpetition that had been initiated pre-petition, a debtor may be

held personally liable for attorney fees and costs that result

from that litigation. 

C. Inapplicability of Administrative Expense Priority

Caselaw 

Although administrative expense priority is not at issue in

this case, the BAP majority relied on Abercrombie and Kadjevich, both involving administrative expense priority,

because the outcome of those cases turned on whether attorney fees arose from a pre-petition claim. Ybarra, 295 B.R. at

612. The BAP dissent found the administrative expense priority caselaw inapt because 

[t]he purpose of administrative expense priority is to

facilitate the operation of the debtor in possession’s

business with a view to rehabilitation. . . . The purIN RE: YBARRA 13227
pose of a discharge is to provide the debtor with a

fresh start, which is a different concern from determining administrative priority. The Ninth Circuit has

not concluded that the standard for determining

administrative expense status under § 503(b) and

dischargeability under § 727(b) is the same. 

Id. at 624. We agree with the BAP dissent’s assessment and

hold that because our standards for determining administrative expense priority are animated by different purposes than

are our standards for determining which claims are discharged

in bankruptcy, Kadjevich and Abercrombie do not control this

case.8

[6] Whereas in discharge cases, the personal liability of the

debtor is at issue, creditors seeking administrative expense

priority are pursuing property of the bankruptcy estate. Section 507 of the Code sets forth the order of priority accorded

to various classes of unsecured creditors when a Chapter 7

bankruptcy estate is liquidated. Administrative expense

claims, defined in § 503, are accorded the first level of priority; these claims are paid in full before claims in a lower category. See § 726(a)(1); In re Lazar, 207 B.R. 668, 673 (Bankr.

C.D. Cal. 1997). Allowable administrative expenses include

“the actual, necessary costs and expenses of preserving the

estate, including wages, salaries, or commissions for services

8We note that the BAP majority perceived a discrepancy between our

determinations of whether attorney fees arose from a pre-petition claim in

Kadjevich and Siegel: while both cases involved fees awarded as a result

of the debtor’s voluntary post-petition conduct, in Siegel we held that the

fee award was not discharged, whereas in Kadjevich we held that the fee

award could not be granted administrative expense priority. As the splintered BAP opinion reflects, this perceived discrepancy has led to some

confusion in the bankruptcy courts. See In re Good Taste, Inc., 317 B.R.

at 114-16, 120 (noting the “ambiguous state of the 9th Circuit authority”

in this area). Ultimately, because the contrasting outcomes in Kadjevich

and Siegel can be explained by the differing purposes of discharge and

administrative expense priority, we need not attempt to “harmonize” our

caselaw. 

13228 IN RE: YBARRA
rendered after the commencement of the case.”

§ 503(b)(1)(A). To be deemed an administrative expense, the

claim must have arisen from a transaction with the debtor in

possession,9 and directly and substantially benefitted the

estate. Abercrombie, 139 F.3d at 757 (quoting Microsoft

Corp. v. DAK Indus. (In re DAK Indus.), 66 F.3d 1091, 1094

(9th Cir. 1995)).10 Thus, under the Code, only claims arising

from post-petition transactions may be granted such priority.

Kadjevich, 220 F.3d at 1019; Abercrombie, 139 F.3d at 758.

[7] The purpose of administrative priority status is to

encourage third parties to contract with the bankruptcy estate

for the benefit of the estate as a whole. See Christian Life Ctr.

Litig. Def. Comm. v. Silva (In re Christian Life Ctr.), 821 F.2d

1370, 1373 (9th Cir. 1987); Kadjevich, 220 F.3d at 1019 (noting that the purpose of granting priority to post-petition debts

is “so that third parties will risk providing the goods and services that are necessary for a struggling debtor to reorganize”); see also Abercrombie, 139 F.3d at 757 (citing

encouragement of third parties to deal with the debtor in possession and facilitate rehabilitation as purpose of the administrative expense priority). The central question in determining

whether a claim is granted administrative expense priority is

whether the third party should be paid at the expense of the

debtor’s existing unsecured creditors. See Total Minatome

9The “debtor in possession” is a debtor in a Chapter 11 or Chapter 12

case or a person who has qualified as a trustee under § 322. § 1101; 1

Epstein et al., Bankruptcy § 1-4, at 9. 

10The Supreme Court carved out an exception to this “post-petition

transaction requirement” in Reading v. Brown, 391 U.S. 471 (1968). Abercrombie, 139 F.3d at 758. There, the Court determined that an award of

tort damages to victims of a fire caused by the Chapter 11 receiver’s negligence was entitled to administrative expense priority, despite the fact that

victims did not transact with the receiver, nor did the estate benefit from

the event. Reading, 391 U.S. at 485. In the interests of “fairness to all persons having claims against the insolvent,” id. at 477, the Court held that

tort claims arising post-petition were “actual and necessary expenses” of

preserving the estate. Id. at 482, 485. 

IN RE: YBARRA 13229
Corp. v. Jack/Wade Drilling, Inc. (In re Jack/Wade Drilling,

Inc.), 258 F.3d 385, 389 (5th Cir. 2001). 

[8] By contrast, in the discharge context, the question is

whether the debtor should be released from pre-petition debts

so that she can be given a “fresh start.” See Jensen, 995 F.2d

at 928. The discharge inquiry involves the existence of personal liability, while administrative expense priority concerns

the distribution of assets from a limited pool. Even if a cause

of action arose pre-petition, the discharge shield cannot be

used as a sword that enables a debtor to undertake risk-free

litigation at others’ expense. See Siegel, 143 F.3d at 533-34.

Personal liability for fees incurred through the voluntary pursuit of litigation initiated post-petition is more consistent with

the purpose of discharge. This policy difference supports our

conclusion that the administrative expense priority cases do

not control our determination of whether a claim is prepetition or post-petition in the discharge context. 

[9] As the BAP noted, Siegel was decided less than six

weeks after Abercrombie but failed to cite it. Ybarra, 295

B.R. at 613. Kadjevich was decided two years after Siegel, but

does not discuss that case. In our view, the best explanation

for this lack of integration is that Siegel involved discharge,

while Abercrombie and Kadjevich involved administrative

expense priority — two distinct areas of bankruptcy law with

separate purposes. In sum, we conclude that the rules set forth

in Abercrombie and Kadjevich do not apply to the question of

whether debts are discharged. 

D. Discharge of Rockwell’s Attorney Fees and Cost

Claims 

[10] In light of the foregoing discussion, we reaffirm that

claims for attorney fees and costs incurred post-petition are

not discharged where post-petition, the debtor voluntarily

commences litigation or otherwise voluntarily “return[s] to

the fray.” See Siegel, 143 F.3d at 533-34. Whether attorney

13230 IN RE: YBARRA
fees and costs incurred through the continued prosecution of

litigation initiated pre-petition may be discharged depends on

whether the debtor has taken affirmative post-petition action

to litigate a prepetition claim and has thereby risked the liability of these litigation expenses. 

[11] In this case, after petitioning for bankruptcy, Ybarra

petitioned the bankruptcy court to exempt the state suit

against Rockwell, and then appealed the bankruptcy court’s

denial of this exemption to the BAP and this court. On

remand, Ybarra chose to pursue the state case rather than

accepting Rockwell’s $17,500 settlement offer. Ybarra

actively persuaded the state court to set aside the dismissal.

We conclude that by affirmatively reviving the state suit,

Ybarra “returned to the fray.” Thus, under Siegel, Rockwell’s

claim for attorney fees and costs incurred post-petition was

not discharged in the bankruptcy. 

[12] The BAP reasoned that because the bankruptcy court’s

decisions not to exempt the lawsuit and to approve the settlement were later overturned, Ybarra’s state suit should be considered continuous litigation, rather than the commencement

of a new suit post-petition. Ybarra, 295 B.R. at 616. We disagree, and conclude that Ybarra’s actions to revive the state

suit were sufficiently voluntary and affirmative to be considered “returning to the fray.” Accordingly, we reverse the

BAP’s holding that the attorney fees incurred post-petition

were discharged. 

IV. CONCLUSION

In light of the foregoing, we conclude that the award of

attorney fees and costs incurred post-petition was not discharged in Ybarra’s bankruptcy.11 We therefore REVERSE. 

11Ybarra also challenges the BAP’s refusal to impose sanctions against

Rockwell for allegedly violating the discharge injunction of 11 U.S.C.

§ 524(a) by filing an abstract of judgment, reporting to a credit bureau,

IN RE: YBARRA 13231
and filing motions for Ybarra to appear for examination. As the BAP concluded, this argument is without merit. See Ybarra, 295 B.R. at 617. As

the record reflects, Rockwell was proceeding pursuant to the bankruptcy

court’s order (“Leave Order”) which granted Rockwell’s motion to collect

the “Enforceable Amount” of its cost and fee award. Because Rockwell

was attempting to collect debts that the bankruptcy court held were not

discharged, these debts would not have been subject to the injunction. See

Ruvacalba v. Munoz (In re Munoz), 287 B.R. 546, 556 (BAP 9th Cir.

2002). Moreover, Ybarra did not move for a stay of the bankruptcy court’s

decision pending the appeal. See Fed. R. Bankr. Proc. 8017(a), (b). We

therefore affirm the BAP’s determination that Rockwell did not violate the

discharge injunction. 

Ybarra next argues that we should exercise our discretion to award

sanctions against Rockwell for bringing a frivolous appeal. Her request for

sanctions on appeal is improper, because such a request must be made in

a separate motion pursuant to Federal Rule of Appellate Procedure 38. In

any event, in light of our disposition, sanctions would not be warranted.

13232 IN RE: YBARRA