In the

United States Court of Appeals

For the Seventh Circuit

No. 14-3017

IN RE: CHARLES EDWARD TAYLOR, II,

 Debtor-Appellant.

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 1:13-CV-7743 — Edmond E. Chang, Judge.

ARGUED APRIL 13, 2015 — DECIDED JULY 20, 2015

Before WOOD, Chief Judge, ROVNER, Circuit Judge, and

SPRINGMANN, District Judge.*

SPRINGMANN, District Judge. In 2005, the brother of DebtorAppellant Charles Edward Taylor, II, died in a boating

accident. Patricia Caiarelli, the decedent’s ex-spouse and

guardian of their minor child, sought a declaration in Washington state court that the child was entitled to assets of the

decedent’s estate that were distributed to Taylor. The state

court entered judgment against Taylor for over $1.4 million.

The decedent’s estate, which was named judgment creditor,

assigned the judgment to Caiarelli. Taylor responded by

 Of the Northern District of Indiana, sitting by designation. 

*
2 No. 14-3017

seeking a declaration in probate court that the assignment was

void. Prior to a resolution, however, Taylor filed for

bankruptcy under Chapter 11. It’s fair to say that, at this point,

things get complicated. 

Three days after the bankruptcy filing, the probate judge

sent a letter to Caiarelli and Taylor (and their attorneys)

acknowledging the bankruptcy filing and the resulting

automatic stay of Taylor’s lawsuit. The letter listed several

matters the court planned to address once the case resumed.

As to the assignment, the judge opined that although “[the]

assignment may be properly” effectuated, “[i]t appears ... that

several steps were skipped at the time of assignment.” See R.

70-1, Judge Rogers Letter (April 26, 2012) at 263. The probate

judge confirmed that the letter is “not an Order.” Id. at 262. 

Notwithstanding the letter, Caiarelli initiated an adversary

proceeding in the bankruptcy court, objecting to a discharge of

the judgment under 11 U.S.C. § 523(a). Taylor moved to

dismiss the objection, arguing that Caiarelli lacked standing to

enfor ce the judgment. To address standing,

Caiarelli—represented by her attorneys, Madeline Gauthier

and Charles Kimbrough—returned to probate court and filed

a motion to ratify the assignment. But the plan backfired.

Taylor submitted to the bankruptcy court both the letter and

the motion to ratify as proof that Caiarelli lacked standing.

While noting that the letter provided no definitive answer as

to the validity of the assignment, the bankruptcy court dismissed the adversary proceeding and found that, as an

evidentiary matter, Caiarelli failed to establish standing. See R.

70-2, Dismissal Order Hr’g Tr. (Mar. 19, 2013) at 145–46. Upon

dismissal, the judgment was discharged, and Taylor’s creditors
No. 14-3017 3

were enjoined from collecting on the judgment by operation of

11 U.S.C. § 524(a)(2) and the bankruptcy plan of reorganization.

Despite the dismissal order, Caiarelli returned to probate

court and pressed forward with her motion to ratify. After

conducting a hearing, the probate court granted the motion,

finding that the assignment “met all the requirements of both

law and local probate court custom” and that “[a]ll concerns

regarding the Assignment raised by [the letter] have been

addressed.” See R. 70-1, Ratification Order, In re Taylor, No. 06-

4-02116-6 (Apr. 2, 2013) at 41–42. The probate court concluded

that the assignment “is valid, and has been valid since its

original signing.” Id. at 42. 

Taylor responded again, this time by seeking a civil

contempt order in the bankruptcy court. Taylor alleged that

Caiarelli and her attorneys violated both the statutory

discharge and plan injunctions by returning to the probate

court. The bankruptcy court granted Taylor’s motion and

entered a civil contempt order against Caiarelli and her

attorneys, holding that they violated the injunctions by

prosecuting and obtaining the ratification order for the

purpose of collecting on the discharged judgment; and that the

ratification order constitutedanimpermissible collateral attack,

rendering it void ab initio. The bankruptcy court then issued 1

a damages order and judgment for $165,662.36 in attorney’s

After the issuance of the contempt order, the ratification order was

1

vacated. See R. 40-1, Stipulation and Order (Aug. 27, 2013). 
4 No. 14-3017

fees, to be paid jointly and severally by Caiarelli and her

attorneys. 

Caiarelli, Gauthier and Kimbrough (collectively, the

Appellees in this Court) appealed all three orders—the

contempt order, the damages order, and the judgment—to the

United States District Court. The Appellees raised three issues:

(1) whether, as a matter of law, the ratification order violated

the statutory discharge injunction and/or the plan injunction;

(2) whether the bankruptcy court abused its discretion by

entering the civil contempt order; and (3) whether the

bankruptcy court abused its discretion by ordering $165,662.36

in attorney’s fees. 

While the appeal was pending, Taylor notified the district

court that he reached a settlement with Gauthier and

Kimbrough’s legal malpractice insurance carrier. Under the

purported settlement, Taylor would receive $140,000 in

satisfaction for the judgment, and in turn, Taylor would file a

satisfaction and release of the judgment, along with a motion

to vacate all three orders challenged on appeal. However, both

Gauthier and Caiarelli denied that a full settlement had been

reached. 

Notwithstanding the disagreement, Taylor moved to

dismiss the appeal as moot, arguing that the purported

settlement provides all relief sought by the Appellees. The

district court then asked Taylor to seek an indicative ruling

from the bankruptcy court as to whether it would grant a

motion to vacate in light of the purported settlement. The

bankruptcy court determined that vacatur would be approved

if the parties returned to the court “arm [in] arm,” in favor of
No. 14-3017 5

settlement. R. 36-1, Appellees’ Exh. 1, Indicative Ruling Hr’g 2

Tr. (Apr. 8, 2014) at 5. The district court then issued an order

denying Taylor’s motion to dismiss; and in a separate order,

reversed the contempt order, damages order, and judgment,

finding that the Appellees did not violate the statutory

discharge or plan injunctions, and did not impermissibly attack

a federal judgment. Taylor now appeals. 

I. DISCUSSION

On appeal, we apply the same standard as the district court,

reviewing a finding of civil contempt for abuse of discretion.

Ohr ex rel. NLRB v. Latino Exp., Inc., 776 F.3d 469, 474 (7th Cir.

2015). A finding of civil contempt will only be reversed if it

“depends on faulty legal premises [or] clearly erroneous

factual findings.” Harrell ex rel. NLRB v. Am. Red Cross, Heart of

Am. Blood Servs. Region, 714 F.3d 553, 556 (7th Cir. 2013). The

legal conclusions of both the bankruptcy court and the district

 The bankruptcy judge stated the following: 

2

[M]y indicative ruling would be that if the parties upstairs settle

this, and they come in arm [in] arm, and they want me to—as a

condition to effectuating the settlement, to vacate the contempt

order, I’m perfectly happy to do that . . . . I just want to make clear

that in vacating it, if we had Ms. Gauthier, for example, come back

before me, and if she says that there is not a settlement agreement,

that could have some impact on it. . . . If what is holding up the

settlement is the existence of the contempt order, I will—I’m

indicating that I would, in order to effectuate that settlement, be

happy to vacate the contempt order. 

Indicative Ruling Hr’g Tr. at 5–7, 10. 
6 No. 14-3017

court are reviewed de novo. In re Mississippi Valley Livestock,

Inc., 745 F.3d 299, 302 (7th Cir. 2014).

Taylor presents three issues on appeal: whether the district

court erred (1) by refusing to dismiss the appeal as moot; (2) by

determining that the ratification order did not violate the

statutory discharge and/or plan injunctions; and (3) by

determining that the ratification order did not constitute an

impermissible collateral attack on a federal judgment. We

address each issue in turn, and in doing so, adopt the sound

reasoning of the district court. 

A. Mootness

The jurisdiction of Federal courts is limited to actual

“cases” and “controversies.” U.S. Const. art. III. A case is moot

“only when it is impossible for a court to grant any effectual

relief whatever to the prevailing party.” Chafin v. Chafin, 133 S.

Ct. 1017, 1023 (2013) (internal quotation marks and citation

omitted). If the possibility of partial relief exists, the appeal is

not moot. In re Envirodyne Indus., Inc., 29 F.3d 301, 304 (7th Cir.

1994). As such, this Circuit’s case law holds that an unaccepted

settlement offer will only render a case moot if it “‘offers to

satisfy the plaintiff’s entire demand.’” Scott v. Westlake Servs.

LLC, 740 F.3d 1124, 1126 (7th Cir. 2014) (citing Rand v. Monsanto

Co., 926 F.2d 596, 597–98 (7th Cir. 1991); see also Damasco v.

Clearwire Corp., 662 F.3d 891, 895 (7th Cir. 2011). When a

party’s entire demand is satisfied, “there is no dispute over

which to litigate and thus no controversy to resolve.” Scott, 740

F.3d at 1126 (internal quotation marks omitted). 

Here, the purported settlement lacks the consent of all the

parties—both Caiarelli and Gauthier continue towithholdtheir
No. 14-3017 7

consent. Nonetheless, Taylor maintains that Caiarelli and

Gauthier’s consent is unnecessary because, pursuant to the

purported settlement, the insurance carrier will pay an agreed

amount to Taylor, and then Taylor will move to vacate the

contempt order, damages order, and the judgment. And

therefore, no further relief may be granted on appeal. 

As the district court thoroughly explained, Taylor’s

argument is flawed. First, according to the bankruptcy judge’s

indicative ruling, a motion to vacate would only be granted if

all the parties—Caiarelli and Gauthier included—returned to

the bankruptcy court “arm [in] arm” in favor of settlement.

Indicative Ruling Hr’g Tr. at 5. The judge noted that “if we had

Ms. Gauthier, for example, come back before me, and if she

says that there is not a settlement agreement, that could have

some impact on it.” Id. at 6–7. The record clearly demonstrates

that an “arm [in] arm” agreement has eluded the parties thus

far, calling into question whether the bankruptcy court would

even grant vacatur upon remand. And without vacatur, the

challenged orders remain in place. 

Second, even if the bankruptcy court did grant vacatur, the

purported settlement does not encompass all relief sought by

the Appellees—namely, it does not negate the Appellees’ stake

in reversing the bankruptcy court’s dismissal order, and

ultimately, the discharge injunction. Again, a settlement offer

must provide the plaintiff with complete relief to render a case

moot. Scott, 740 F.3d at 1126; see, e.g., Clark Equip. Co. v. Lift

Parts Mfg. Co. Inc., 972 F.2d 817, 818–19 (7th Cir. 1992) (an

appeal of sanctions was mooted because the appellees paid the

full amount of the imposed sanctions and reached a settlement

as to the underlying case to which the sanctions arose).
8 No. 14-3017

Taylor counters that the bankruptcy court’s dismissal order

which led to the discharge injunction, was not before the

district court on appeal. The discharge injunction remains in

place, Taylor argues, with or without a ruling on the orders

challenged on appeal. While true, Taylor’s argument ignores

the Appellees’ interest in safely returning to the probate court

to ratify the assignment. The contempt order, which was before

the district court on appeal, rendered the ratification order void

ab initio. For the ratification order to be reentered, the

Appellees must file a motion for reentry in the probate court.3

And with the discharge injunction in place, any such return to

the probate court would risk a repeat violation, and a repeat

finding of civil contempt. Thus, so long as the discharge

injunction remains in place, the purported settlement provides

only partial relief, and the underlying dispute to which the

challenged orders arose remains unresolved. See Chafin, 133 S.

Ct. at 1023 (a case is moot “only when it is impossible for a

court to grant any effectual relief whatever to the prevailing

party.”) (internal quotation marks and citation omitted). 

As such, the district court correctly determined that the

appeal is not moot. Article III poses no bar to our consideration

of the remaining claims. 

Taylor’s counsel conceded this point at oral argument: “It’s true that ... 3

if this Court was to affirm ... and the Appellees returned to state court and

got the ratification order reentered, which they would have to do since it

was vacated ... .” Oral Arg. (Apr. 13, 2015). 
No. 14-3017 9

B. Violation of Injunctions

The district court also found that no violation of the

statutory discharge or plan injunctions occurred because the

ratification motion did not seek to collect, recover, prosecute or

satisfy the judgment against Taylor. We agree. 

When a debtor confirms a Chapter 11 reorganization plan,

the plan “discharges the debtorfrom any debt that arose before

the date of such confirmation.” 11 U.S.C. § 1141(d)(1)(A).

Discharge in a bankruptcy case “operates as an injunction

against the commencement or continuation of an action, the

employment of process, or an act, to collect, recover, or offset

any [discharged] debt as a personal liability of the debtor,

whether or not discharge of such debt is waived.” 11 U.S.C.

§ 524(a)(2). Similarly, the plan injunction at issue enjoins

creditors “from taking any action ... to prosecute, collect or in

any way to satisfy any claim such creditor may have against

the Debtor or the Debtor’s property that arose prior to the

confirmation of the plan.” See R. 70, Debtor’s First Am. Plan

§ 11.1 at 135. The bankruptcy court is permitted to “sanction a

party for violating the discharge injunction only if the party

took some action prohibited by § 524(a)(2)—i.e., an action to

collect, recover or offset any [discharged] debt ... of the

debtor.” Paul v. Iglehart (In re Paul), 534 F.3d 1303, 1307 (10th

Cir. 2008) (internal quotation marks omitted); see also In re

Hunter, 970 F.2d 299, 310 (7th Cir. 1992) (explaining that a

bankruptcy discharge “precludes only actions to establish

personal liability.” (emphasis in original)). 

In seeking ratification, the Appellees were not attempting

to modify the judgment against Taylor. They were not even
10 No. 14-3017

attempting to modify or cure a deficiency with the assignment

of the judgment. The ratification order, as spelled out by the

probate court, was nothing more than a declaration that the

assignment “is valid, and has been valid since its original

signing.” See Ratification Order at 42. The probate court

recognized that the order had no impact on the legal status of

the parties, and in particular, it had no impact on Taylor’s legal

obligations in relation to the judgment. With or without the

ratification order, Taylor’s liability remained the same. See

Hawxhurst v. Pettibone Corp., 40 F.3d 175, 180 (7th Cir. 1994)

(“Permitting a suit to obtain a declaration of liability against a

debtoris not equivalent to authorizing the recovery of a barred

claim in a bankruptcy proceeding”).

Nonetheless, Taylor argues that ratification, albeit not a

direct attempt to enforce the judgment, is prohibited because

it constitutes an indirect attempt at establishing personal

liability. According to Taylor, the ratification order would “set

in motion a series of events” that may enable collection of the

judgment. See Appellant’s Br. at 40. Taylor’s cites a handful of

bankruptcy court decisions from other circuits to support this

theory. See, e.g., Torres v. Chase Bank USA, N.A. (In re Torres),

367 B.R. 478 (Bankr. S.D.N.Y. 2007); Atkins v. Martinez (In re

Atkins), 176 B.R. 998 (Bankr. D. Minn. 1994). 

The Appellees readily admit that ratification was sought to

lay the groundwork for a Rule 60(b) motion (incorporated

under Bankruptcy Rule 9024) to vacate the dismissal order and
No. 14-3017 11

reopen the adversary proceeding. But gathering evidence to 4

support a Rule 60(b) motion, in order to argue that a debt is not

dischargeable, is not the same as taking action to collect on the

debt. When taken to its logical conclusion, Taylor’s theory

would render any attempt by a creditorto support a Rule 60(b)

motion—a permissible motion under the Federal Rules of Civil

Procedure and the Bankruptcy Code—as a violation of a

discharge injunction. Such an outcome would undermine the

purpose of Rule 60(b), and would, in effect, shut down

Caiarelli’s remaining avenue for relief. 

The ratification order is also, to say the least, several steps

removed from a collection on the judgment. Before Caiarelli

could even present her argument that the judgment is nondischargeable—let alone initiate a collection action—the

bankruptcy court must approve a Rule 60(b) motion to reopen

the adversary proceeding. This is a high bar for relief. See, e.g.,

Eskridge v. Cook Cnty., 577 F.3d 806, 809 (7th Cir. 2009) (“relief

under Rule 60(b) is ‘an extraordinary remedy and is granted

only in exceptional circumstances’” (quoting McCormick v. City

of Chi., 230 F.3d 319, 327 (7th Cir. 2000)). And even if Caiarelli

does establish that “exceptional circumstances” warrant relief

under Rule 60(b), she must also convince the bankruptcy court

that the judgment is non-dischargeable. Then, and only then,

could Caiarelli attempt collection. It goes without saying that,

While the appeal was pending before the district court, Caiarelli filed a

4

Rule 60(b) motion to vacate the dismissal. The bankruptcy court denied the

motion with prejudice to the extent it was based on subsections (1)–(3), and

without prejudice to the extent it was based on subsections (4)–(6). See R. 47-

1, Order (Apr. 29, 2014). 
12 No. 14-3017

at this stage of the litigation, a direct action to collect is purely

hypothetical.

Given the facts presented—and in particular, the

procedural gulf between the ratification order and an action to

collect—we are not convinced that the Appellees violated the

statutory discharge or plan injunctions by obtaining evidence

in support of a permissible post-judgment motion.

C. Collateral Attack 

Lastly, the district court correctly determined that the

ratification order is not an impermissible collateral attack on a

federal judgment—i.e., the bankruptcy court’s dismissal order.

In its dismissal order, the bankruptcy court held that

Caiarelli presented insufficient evidence to establish standing

to enforce the judgment against Taylor. In contrast, when

adjudicating the motion to ratify, the probate court did not

determine whether Caiarelli may enforce the judgment against

Taylor, or even whether Caiarelli had standing to make such

an argument before the bankruptcy court. The probate court

issued a declaration as to the validity of the assignment—and

that is all. As Taylor noted in his brief, such a declaration is a

“routine aspect of Washington probate practice.” Appellant’s

Br. 27. The record reveals that the bankruptcy court was

reluctant to engage in this “routine aspect” of probate court, as

it passed on determining the validity of the assignment. See

Dismissal Order Hr’g Tr. at 145 (“In order to find [out whether

the assignment is valid], we have to send it back to Judge

Rogers to determine that. It’s an evidentiary issue for me. I

have exclusive jurisdiction to determine standing. And I think
No. 14-3017 13

that ... [Caiarelli failed] to me[et] the burden of proving

standing.”).

Additionally, the dismissal order did not expressly prohibit

Caiarelli from returning to the probate court. Instead, it

prohibited her from “cur[ing]” any deficiencies with the

assignment—or in other words, retroactively establishing

standing. R. 70-9, Hr’g Tr. (Mar. 19, 2013) at 63 (“[T]he

discharge injunction doesn’t permit the plaintiff ... to go back

nunc pro tunc and cure whatever defects there may have been

in ... her standing when she original brought the [adversary

proceeding]”). But Caiarelli was not seeking to “cure” any

deficiencies with the assignment. She sought a declaration that

the assignment “has been valid since its original signing.”

Ratification Order at 42. Thus, the state court declaration and

the federal judgment are not in conflict.

Taylor claims that an action may still constitute an

impermissible collateral attack if its “inevitable effect” is to

undermine a federal judgment. See Appellant’s Br. at 23–25

(citing Miller v. Meinhard-Commercial Corp., 462 F.2d 358 (5th

Cir. 1972), and GAF Holdings, LLC v. Rinaldi (In re Farmland

Indus., Inc., 376 B.R. 718 (Bankr. W.D. Mo. 2007)). The

inevitable effect of the ratification motion, argues Taylor, was

to “overrule the legal and practical effects” of the dismissal

order. Id. at 27. 

Taylor’s interpretation of the collateral attack doctrine,

when applied to the present facts, is unduly broad. The

ratification order was sought to support, or “muster additional

evidence” for, a Rule 60(b) motion, see Appellees’ Br. at 22, and

neither party disputes that a Rule 60(b) motion is a permissible
14 No. 14-3017

collateral attack on a federal judgment. See Bell v. Eastman

Kodak Co., 214 F.3d 798, 800–01 (7th Cir. 2000). So under

Taylor’s “inevitable effect” theory, obtaining evidence to

support a permissible collateral attack may, in and of itself,

constitute an impermissible collateral attack. Such an outcome

would, again, undermine the purpose of Rule

60(b)—particularly in the present circumstances, where the

ratification order is central to the Appellees’ argument for

relief.5

Further, there is nothing “inevitable” about the effect of the

ratification order. The bankruptcy court retains exclusive

jurisdiction to determine whether Caiarelli has standing to

pursue the adversary proceeding against Taylor. See U.S.C. 11

§ 523(c)(1). Upon receipt of the ratification order, the

bankruptcy court is free to take it, leave it, or otherwise do

with it what it pleases. See also McCormick, 230 F.3d at 327 (a

court’s decision to reinstate a case under Rule 60(b) amounts

Taylor argues that “Rule 60(b) does not exist to extricate a litigant from

5

risky litigation tactics that later turn out to have been improvident.”

Appellant’s Reply 2. He notes that the Appellees had ample opportunity to

resolve standing without resorting to a post-discharge return to probate

court. Namely, the Appellees could have requested a lift of the automatic

stay to permit a resolution of the assignment issue in state court; requested

an extension to file an adversary proceeding under § 523(a); directly

appealed the dismissal order; or moved to vacate the dismissal order under

Rule 59(e). Perhaps, but this is an argument as to why relief is inappropriate

under Rule 60(b), see Fed. R. Civ. P. 60(b) (“the court may relieve a party ...

from a final judgment ... for ... newly discovered evidence that, with

reasonable diligence, could not have been discovered in time to move for a new trial

under Rule 59(b).” (emphasis added)), and is therefore more appropriately

made before the bankruptcy court. 
No. 14-3017 15

to “discretion piled on discretion.”) (internal quotation marks

and citation omitted). As Appellees’ counsel aptly noted at oral

argument, the road to collection is an “uphill battle.”

Accordingly, the district court correctly determined that the

ratification order is not an impermissible collateral attack on a

federal judgment. 

II. CONCLUSION

For the foregoing reasons, we concur with the district

court’s findings that the appeal was not moot, and that the

bankruptcy court abused its discretion by issuing the contempt

order, damages order, and judgment. The judgment of the

district court is AFFIRMED.