NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: BARBRA WILLIAMSON, 

Debtor, 

------------------------------

BARBRA WILLIAMSON, 

Appellant, 

 v. 

PARS, 

Appellee.

No. 18-60062 

BAP No. 17-1375 

MEMORANDUM*

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Lafferty III, Spraker, and Faris, Bankruptcy Judges, Presiding

Argued and Submitted February 14, 2020

Pasadena, California

Before: SCHROEDER, BERZON, and R. NELSON, Circuit Judges.

Barbra Williamson appeals a decision by the bankruptcy court, affirmed by 

the Bankruptcy Appellate Panel, concluding that PARS, the administrator of 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

FEB 26 2020

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
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Williamson’s pension plan, did not violate the automatic stay triggered by 

Williamson’s chapter 13 bankruptcy. The court concluded that PARS’s postpetition withholding of Williamson’s monthly pension payments to recoup prepetition overpayments constituted equitable recoupment, which is not subject to the 

automatic stay. It denied Williamson’s motion for sanctions under 11 U.S.C. 

§ 362(k) for violation of the stay. We affirm. 

“We review de novo the scope or applicability of the automatic stay under 

the Bankruptcy Code, 11 U.S.C. § 362, because it is a question of law.” In re 

Palmdale Hills Prop., LLC, 654 F.3d 868, 875 (9th Cir. 2011).

1. Williamson’s argument that the doctrine of equitable recoupment is 

invalid because it is a judicially created exception to 11 U.S.C. § 362, the statute 

providing for the automatic stay, is foreclosed by binding precedent. The common 

law doctrine of equitable recoupment is valid even though it “does not owe its 

legitimacy to anything in the Bankruptcy Code.” See In re TLC Hosps., Inc., 224 

F.3d 1008, 1011 (9th Cir. 2000). Use of recoupment in bankruptcy has been 

approved by the Supreme Court and the Ninth Circuit. See, e.g., Reiter v. Cooper, 

507 U.S. 258, 265 n.2 (1993) (observing that the use of recoupment is permitted in 

bankruptcy cases); In re TLC Hosps., 224 F.3d at 1011; Newbery Corp. v. 

Fireman’s Fund Ins. Co., 95 F.3d 1392, 1399 (9th Cir. 1996). 

Binding precedent further makes clear that the equitable recoupment is not 
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subject to the automatic stay. In re TLC Hospitals noted that “[a]s applied in 

bankruptcy, recoupment is an equitable doctrine that ‘exempts a debt from the 

automatic stay’” when it applies. 224 F.3d at 1011 (quoting United States v. 

Consumer Health Servs. of Am., Inc., 108 F.3d 390, 395 (D.C. Cir. 1997)). In re 

TLC Hospitals held that because the doctrine did apply, the party seeking 

recoupment “may recoup its overpayments by applying them against its postpetition underpayment liabilities to [debtor], without being affected by the 

automatic stay.” Id. at 1014 (emphasis added). Bound by these decisions, we reject 

Williamson’s argument that the doctrine of equitable recoupment is an invalid 

exception to the automatic stay.

2. Equitable recoupment is permissible only where mutual debts arise 

from “the same transaction,” and where “it would . . . be inequitable for the debtor 

to enjoy the benefits of that transaction without meeting its obligations.” See 

Newbery, 95 F.3d at 1399, 1403 (citations omitted). Williamson does not distinctly 

contest in her brief that the test for equitable recoupment was met here, and

appears to have waived this point at oral argument.

In any event, the court here properly applied the logical relationship test 

used in this circuit to determine whether the two claims arose from the same 

transaction. See In re TLC Hosps., 224 F.3d at 1012; Newbery, 95 F.3d at 1402.

PARS’s obligation to pay Williamson pension benefits and Williamson’s debt for 
4 

prior overpayments “logically relate to one another,” In re TLC Hosps., 224 F.3d at 

1012, as they both “arise[] from the same aggregate set of operative facts,” see In 

re Lazar, 237 F.3d 967, 979 (9th Cir. 2001) (internal citations omitted). Both debts 

arise from Williamson’s pension plan; the errors in her signed enrollment packet 

resulted in the miscalculation of her monthly benefit; and the subsequent correction 

of that miscalculation demonstrated that Williamson had already received the 

amount due each month by virtue of the earlier overpayment. The court also 

properly concluded that the equities favor recoupment. Equitable recoupment is 

thus appropriate. 

AFFIRMED.