Court Opinion

ID: 2719152
Source: CourtListenerOpinion
Date Created: 2014-08-20 01:00:47.275416+00
Date Added: 2024-06-11T15:38:20.494797
License: Public Domain

FILED
                                                            AUG 19 2014
 1                         NO FO PUBL A IO
                             T R     IC T N
 2                                                      SUSAN M. SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
                                                          OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )         BAP No. NC-13-1469-DJuKu
                                   )
 6   MARCO GUTIERREZ and JENNIFER )          Bk. No. 08-44503
     GUTIERREZ,                    )
 7                                 )
                    Debtors.       )
 8   ______________________________)
                                   )
 9   MARCO GUTIERREZ; JENNIFER     )
     GUTIERREZ,                    )
10                                 )
                    Appellants,    )
11                                 )
     v.                            )         M E M O R A N D U M1
12                                 )
     JOHN DIAZ COKER; IRENE MACIAS,)
13                                 )
                    Appellees.     )
14   ______________________________)
15                   Argued and Submitted on July 24, 2014
                          at San Francisco, California
16
                            Filed - August 19, 2014
17
               Appeal from the United States Bankruptcy Court
18                 for the Northern District of California
19       Honorable M. Elaine Hammond, Bankruptcy Judge, Presiding
20
     Appearances:     Appellants Marco Gutierrez and Jennifer Gutierrez
21                    argued pro se; John Diaz Coker, Esq. argued pro se
                      and for Appellee Irene Macias.
22
23   Before:   DUNN, JURY and KURTZ, Bankruptcy Judges.
24
25
26        1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

                                       -1-
 1        Debtor appellants Marco A. Gutierrez (“Mr. Gutierrez”) and
 2   Jennifer V. Gutierrez (“Ms. Gutierrez”) (collectively, “Debtors”)
 3   appeal the bankruptcy court’s order denying their motion for
 4   contempt for violation of the discharge injunction (“Motion”)
 5   against appellees Irene Macias (“Ms. Macias”) and John Diaz Coker
 6   (“Mr. Coker”) (collectively, “Appellees”).       The Debtors contend
 7   that the bankruptcy court erred in determining that the Appellees
 8   did not willfully violate the discharge injunction.      We conclude
 9   otherwise, and we AFFIRM.
10                         I.    FACTUAL BACKGROUND
11        The Debtors and Appellees each filed multiple, voluminous
12   declarations setting forth their conflicting versions of events
13   in support of and in opposition to the Motion prior to the
14   evidentiary hearing on the Motion before the bankruptcy court,
15   which they have submitted in their excerpts of record.      However,
16   the parties did not include in their excerpts of record the
17   bankruptcy court’s Memorandum Decision (“Memorandum Decision”),
18   entered on September 9, 2013, that set forth its findings of fact
19   and conclusions of law for purposes of Civil Rule 52(a),
20   applicable with respect to the Motion under Rules 7052 and 9014,2
21   or its Order Denying Motion for Contempt (“Order”), entered on
22   the same date.   We located and reviewed the Memorandum Decision
23   and the Order in exercising our discretion to review the
24
25
          2
            Unless otherwise indicated, all chapter and section
26   references are to the federal Bankruptcy Code, 11 U.S.C.
27   §§ 101-1532, and all “Rule” references are to the Federal Rules
     of Bankruptcy Procedure, Rules 1001-9037. All “Civil Rule”
28   references are to the Federal Rules of Civil Procedure.

                                       -2-
 1   bankruptcy court’s electronic docket and the documents on record
 2   therein.   See O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert,
 3   Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989); Atwood v. Chase
 4   Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th
 5   Cir. BAP 2003).   The following factual narrative relies
 6   substantially on the factual information included in the
 7   Memorandum Decision.
 8   A.   Pre-Bankruptcy Relations
 9        This appeal arises from the personal relationship between
10   the Debtors and Ms. Macias that ripened into friendship but
11   ultimately soured into estrangement and antipathy.   The Debtors
12   formed and operated Hidalgo Properties, a real estate and
13   mortgage brokerage business.    Ms. Macias worked for the Debtors
14   from 2006 until 2008, first as a real estate assistant and later
15   as a real estate broker under Mr. Gutierrez’ license.    Hidalgo
16   Properties eventually grew to encompassing 60 agents and
17   assistants with four branches in Antioch, Citrus Heights, Madera
18   and Concord, California.   However, with the recession, Hidalgo
19   Properties and the Debtors fell on hard times, and the Debtors
20   experienced financial difficulties.    As Ms. Macias recalled,
21   “Toward the end of the time I was with them [the Debtors] began
22   to do loan modifications and bankruptcies, as their regular real
23   estate business decreased.   With the real estate crisis of 2007,
24   their business decreased so much that they fell behind in paying
25   commissions so they lost all but two of their agents.”
26   Ms. Macias Declaration, at p. 2.
27        In July 2007, facing eviction from the Antioch office, the
28   Debtors moved their business office into their home.    During the

                                      -3-
 1   period from mid-2007 through 2008, Ms. Macias continued to work
 2   for the Debtors.    She stated in her Declaration:
 3        I became the office manager, and continued as agent
          when all of their other agents left them. My
 4        relationship became personal and I even helped
          [Debtors] with frequent small loans, with housekeeping,
 5        and with the care of their children.
 6        I was occasionally paid, but more often I was asked to
          give them money because they were in financial
 7        difficulty with their large house . . . .
 8   Ms. Macias Declaration, at pp. 2-3.    Ms. Gutierrez stated in her
 9   Declaration that her husband “believed the debt owed to Miguel
10   and Irene Macias to be approximately $50,000.”    Ms. Gutierrez
11   Declaration, at p. 11.
12        In his Declaration, Miguel Macias stated, “As Marco
13   Gutierrez’ business declined my wife [Ms. Macias] and I became
14   close to them and helped them by sharing some of my earnings from
15   other employment.”    Miguel Macias Declaration, at p. 2.    In fact,
16   when utilities were shut off at the Debtors’ home for nonpayment,
17   the Debtors moved their family in with Mr. and Ms. Macias for a
18   short period.   However, over time, the relationship between the
19   Debtors and Mr. and Ms. Macias deteriorated to the point where
20   Ms. Macias decided to cut off all ties with the Debtors and
21   ceased communications.
22   B.   The Debtors’ Bankruptcy
23        The Debtors are no strangers to bankruptcy court.      They have
24   filed “a total of 14 bankruptcy cases (either jointly or
25   individually).”    Memorandum Decision, at p. 2; Mr. Coker
26   Declaration, at p. 8.    The chapter 7 case (“Chapter 7 Case”) from
27   which this appeal arises was filed on August 19, 2008, and is the
28   only one of the Debtors’ bankruptcy cases in which they obtained

                                      -4-
 1   a discharge.   At oral argument, Ms. Gutierrez insisted that the
 2   Chapter 7 Case was only the Debtors’ third bankruptcy filing.
 3        Ms. Macias stated in her Declaration,
 4        During the time I was working with [Debtors] they
          explained to me how they were using the bankruptcy
 5        court to prevent foreclosure on their home and to
          prevent other collection efforts, since they had no
 6        money. Mrs. Gutierrez explained to us that the way
          they were preventing a foreclosure was by filing for
 7        bankruptcy and then not following up on a legal
          requirement and the case would be dismissed. She
 8        explained to us that sometimes there was a three month
          period between the filing and the dismissal and that
 9        interfered with the foreclosure.
10   Ms. Macias Declaration, at p. 5.
11        Initially, the Debtors did not list Ms. Macias as a creditor
12   in their schedules.   However, two and a half months after the
13   Chapter 7 Case was filed, the Debtors filed an amended Schedule F
14   listing Ms. Macias as a creditor.      The amended Schedule F was
15   filed after a notice of a possible distribution to creditors was
16   served.   “There is no record of [Ms.] Macias having received
17   notice from the court of the bankruptcy filing at this time, or
18   of the opportunity to file proofs of claim.”      Memorandum
19   Decision, at p. 2.    The Debtors received their discharge by order
20   entered on May 27, 2009.
21   C.   Subsequent Litigation among the Parties
22        The Debtors first sued Ms. Macias and her husband in Contra
23   Costa Superior Court (“State Court”) in January 2010 (“First
24   Suit”).   Ms. Macias filed a general denial and affirmative
25   defenses, but did not file a cross-complaint for unpaid wages or
26   commissions.   The First Suit was mediated and ultimately was
27   dismissed without any determination of liability.
28        The Debtors subsequently filed a second lawsuit (“Second

                                      -5-
 1   Suit”) against Mr. and Ms. Macias and Ms. Lorena Mendez in State
 2   Court on September 13, 2011, setting forth claims for
 3   “Defamation, Civil Conspiracy, Misappropriation of Trade Secret
 4   and Punitive Damages,” seeking damages of “one dollar short of
 5   one million.”    Ms. Macias Declaration, at p. 6; Mr. Coker
 6   Declaration, at p. 3.    The Second Suit
 7        was brought after [Ms.] Macias and Lorena Mendez had
          cooperated with the investigation by the State
 8        Department of Real Estate resulting from a complaint by
          Mr. Oscar Garzon, which ultimately resulted in
 9        revocation of Mr. Gutierrez’ broker’s license, for
          various violations, including the surreptitious taking
10        of money from the bank account of Mr. Oscar Garzon, the
          illegal collection of fees in advance of a modification
11        for the same individual and his wife, and for Debtors’
          acting in the real estate field on suspended licenses.
12
13   Mr. Coker Declaration, at p. 3.     The defendants answered, and
14   Ms. Macias filed a cross-complaint for unpaid wages, unpaid
15   commissions and abuse of process, pro se but assisted by a law
16   student.    Ultimately, the Second Suit was dismissed, again with
17   no determination of liability.
18        Meanwhile, the Debtors filed a motion to reopen the
19   Chapter 7 Case, which was granted by order entered on January 10,
20   2012.    The Debtors subsequently filed an adversary proceeding
21   complaint against Mr. and Ms. Macias, Mr. Coker and his wife, and
22   Lorena Mendez, asserting claims for violation of the discharge
23   injunction and additional state law claims, to which answers were
24   filed.    The bankruptcy court abstained from hearing claims other
25   than the claim for violation of the discharge injunction.
26   D.   Further Proceedings and the Decision on the Motion
27        In light of the Ninth Circuit’s determination that no
28   private right of action exists to enforce the discharge

                                       -6-
 1   injunction, see Walls v. Wells Fargo Bank, N.A., 276 F.3d 502
 2   (9th Cir. 2002), the bankruptcy court interpreted the Debtors’
 3   adversary complaint as a motion (“Motion”) for civil contempt.
 4   As noted above, the parties filed multiple, lengthy declarations
 5   in support of and in opposition to the Motion.
 6        The Motion was heard at an evidentiary hearing (“Hearing”)
 7   before the bankruptcy court on August 29, 2013.       At that point,
 8   the claims against Mr. Macias, Mrs. Coker and Lorena Mendez had
 9   been dropped, and the Debtors were pursuing the Motion only
10   against Ms. Macias and Mr. Coker.       In addition to the
11   declarations submitted by the parties, Ms. Macias, Ms. Gutierrez
12   and Lorena Mendez testified at the Hearing.       At the conclusion of
13   the Hearing, the bankruptcy court took the matter under
14   submission.
15        In its subsequent Memorandum Decision, the bankruptcy court
16   began its legal analysis by noting that a party who knowingly
17   violates the discharge injunction can be held in contempt under
18   § 105(a), citing Walls v. Wells Fargo Bank, 276 F.3d at 507.
19   The bankruptcy court continued:
20        Violation of a discharge injunction requires proof that
          the creditor (1) knew the discharge injunction was
21        applicable and (2) intended the actions, which violated
          the injunction. In re Zilog, Inc., 450 F.3d 996, 1007
22        (9th Cir. 2006). A party seeking contempt sanctions
          has the burden of proving by clear and convincing
23        evidence that sanctions are justified. In re Bennett,
          298 F.3d 1059, 1069 (9th Cir. 2002).
24
25   Memorandum Decision, at p. 3.
26        The bankruptcy court then stated separate findings as to
27   Ms. Macias and Mr. Coker.   As to Ms. Macias, the bankruptcy court
28   noted that the Debtors asserted that Ms. Macias had knowledge of

                                       -7-
 1   their discharge in the Chapter 7 Case because she received a copy
 2   of the discharge order from the court.   The bankruptcy court
 3   further noted that the Bankruptcy Noticing Center sent a copy of
 4   the discharge order to Ms. Macias at her home address in Oakley,
 5   California (“Residence Property”) on May 29, 2009.
 6        However, the bankruptcy court further noted that Ms. Macias
 7   testified that she moved from the Residence Property in March
 8   2009 following foreclosure, and that due to a forwarding error,
 9   the postal service continued to deliver her mail to the Residence
10   Property.   Ms. Macias admitted that she had knowledge of the
11   Debtors’ bankruptcy filings, but she testified that she did not
12   know that the Debtors had received a discharge in the Chapter 7
13   Case.   Ms. Gutierrez asserted in her Declaration that Ms. Macias
14   was informed that the Debtors had obtained a discharge during a
15   December 2010 settlement conference.   However, the bankruptcy
16   court considered this evidence and rejected it as dispositive for
17   the following reasons:
18        The court notes that this appears to be the only time
          knowledge on this basis is asserted in the 18 months of
19        proceedings before this court and the state court, and
          in the approximately 11 inches of pleadings filed on
20        the issue of violation of the discharge. At the
          [Hearing], no testimony was provided as to this
21        allegation. The court finds it is not clear and
          convincing evidence that [Ms.] Macias knew of the
22        discharge.
23   Memorandum Decision, at p. 3 n.3.
24        The bankruptcy court also addressed the Debtors’ allegations
25   that Ms. Macias violated the discharge injunction by cooperating
26   with an investigation conducted by the California Department of
27   Real Estate with respect to the Debtors’ business practices and
28   by speaking out against the Debtors’ business operations within

                                     -8-
 1   their common religious community.      The bankruptcy court found
 2   that the discharge injunction did not prohibit Ms. Macias from
 3   engaging in such speech, and no evidence was presented to the
 4   effect that such speech by Ms. Macias was undertaken to collect a
 5   discharged debt.    In fact, the bankruptcy court further concluded
 6   that harming the Debtors’ business operations would be
 7   counterproductive if Ms. Macias’ goal was to collect a debt,
 8   discharged or otherwise.   The bankruptcy court ultimately
 9   determined that the Debtors had not established by clear and
10   convincing evidence that Ms. Macias had violated the discharge
11   injunction order in the Chapter 7 Case.
12        As to Mr. Coker, the bankruptcy court first noted that
13   Mr. Coker “was not, and never has been, a creditor of Debtors.”
14   Memorandum Decision, at p. 2.   However, the Debtors asserted that
15   Mr. Coker assisted Ms. Macias in preparing her cross-complaint
16   against them, and as Ms. Macias’ counsel, failed to dismiss the
17   cross-complaint immediately after receiving notice of the
18   Chapter 7 Case discharge in a letter from the Debtors.
19        The bankruptcy court found that Ms. Macias filed her
20   cross-complaint against the Debtors in the Second Suit on
21   October 24, 2011.   Mr. Coker received a letter from Mr. Gutierrez
22   on November 28, 2011, advising Mr. Coker that the debt included
23   in Ms. Macias’ cross-complaint was discharged, and any effort to
24   collect that debt violated federal law.      The bankruptcy court
25   found that Mr. Coker responded promptly on November 30, 2011,
26   acknowledging that the Debtors had provided a partial copy of the
27   discharge order and stating that if the information provided was
28   correct, no further action to collect on the claim asserted in

                                      -9-
 1   Ms. Macias’ cross-complaint would be taken.     However, the
 2   bankruptcy court further noted that Mr. Coker had stated that
 3   Ms. Macias had no knowledge of any discharge, and he indicated
 4   that he was going to “review whether setoff of the discharged
 5   debt might still be available.”     Memorandum Decision, at p. 4.
 6   Mr. Coker subsequently filed a motion to amend the cross-
 7   complaint to assert only a claim for setoff, but before the
 8   motion was determined, Ms. Macias voluntarily dismissed the
 9   cross-complaint on February 7, 2012.
10        Noting that the Debtors did not allege that Mr. Coker had
11   any knowledge of their discharge prior to November 28, 2011, the
12   bankruptcy court found that his actions following their informal
13   letter notice did not constitute a clear violation of the
14   discharge injunction.   Accordingly, the bankruptcy court found
15   against the Debtors on the Motion both as to Ms. Macias and
16   Mr. Coker.
17        Consistent with its findings and conclusions in the
18   Memorandum Decision, the bankruptcy court entered its Order
19   denying the Motion on September 9, 2013.     The Debtors timely
20   appealed.
21   E.   Epilogue
22        After the bankruptcy court abstained from hearing the state
23   law claims asserted in the Debtors’ adversary proceeding, the
24   Debtors filed a new lawsuit (“Third Suit”) in State Court against
25   Mr. and Ms. Macias and Lorena Mendez, seeking three million
26   dollars in damages.   The Debtors’ allegations in the Third Suit
27   were essentially the same as in their prior State Court lawsuits.
28   After the defendants had filed answers and cross-complaints for

                                       -10-
 1   abuse of process, among other claims, the Debtors agreed to
 2   dismiss the Third Suit with prejudice, and the cross-complaints
 3   also were dismissed with prejudice.
 4                              II.    JURISDICTION
 5        The bankruptcy court had jurisdiction under 28 U.S.C.
 6   §§ 1334 and 157(b)(2)(O).        We have jurisdiction under 28 U.S.C.
 7   § 158.
 8                                    III.     ISSUE
 9        Did the bankruptcy court err in determining that Ms. Macias
10   and Mr. Coker did not willfully violate the discharge injunction
11   in the Debtors’ Chapter 7 Case?
12                        IV.    STANDARDS OF REVIEW
13        “We review the decision to impose contempt for an abuse of
14   discretion, and underlying factual findings for clear error.”
15   Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1191 (9th Cir.
16   2003) (citing FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th
17   Cir. 1999)).
18        A bankruptcy court abuses its discretion if it applies an
19   incorrect legal standard or misapplies the correct legal standard
20   under the facts before it.       United States v. Hinkson, 585 F.3d
21   1247, 1262 (9th Cir. 2009) (en banc).             If the bankruptcy court
22   applied the correct legal standard, the question then becomes
23   “whether the . . . court’s application of the correct legal
24   standard was (1) ‘illogical,’ (2) ‘implausible,’ or without
25   ‘support in inferences that may be drawn from the facts in the
26   record.’”   Id. (quoting Anderson v. City of Bessemer City, North
27   Carolina, 470 U.S. 564, 577 (1985)).           Clear error exists when, on
28   the entire record, the reviewing court has a definite and firm

                                             -11-
 1   conviction that a mistake was made.      Hoopai v. Countrywide Home
 2   Loans, Inc. (In re Hoopai), 369 B.R. 506, 509 (9th Cir. BAP
 3   2007).   “Where there are two permissible views of the evidence,
 4   the factfinder’s choice between them cannot be clearly
 5   erroneous.”    Anderson, 470 U.S. at 574.
 6        We may affirm a decision of the bankruptcy court on any
 7   basis supported by the record.     Shanks v. Dressel, 540 F.3d 1082,
 8   1086 (9th Cir. 2008).
 9                               V.   DISCUSSION
10        Section 524 provides that a discharge in bankruptcy
11   “operates as an injunction against the commencement or
12   continuation of an action . . . to collect, recover or offset any
13   [discharged] debt as a personal liability of the debtor.”
14   § 524(a)(2).    To justify the imposition of contempt sanctions for
15   violating the discharge injunction, the Ninth Circuit has adopted
16   a two-part test: The debtor must establish by clear and
17   convincing evidence “that the creditor (1) knew the discharge
18   injunction was applicable and (2) intended the actions which
19   violated the injunction.”    Renwick v. Bennett (In re Bennett),
20   298 F.3d 1059, 1069 (9th Cir. 2002).     Zilog, Inc. v. Corning
21   (In re Zilog, Inc.), 450 F.3d 996, 1007 (9th Cir. 2006) (“A party
22   who knowingly violates the discharge injunction can be held in
23   contempt under section 105(a) of the bankruptcy code.”).
24        These are precisely the legal standards applied by the
25   bankruptcy court in its Memorandum Decision, and the Debtors do
26   not argue otherwise.    Construing the Debtors’ pro se briefs
27   liberally, what they do argue is that the bankruptcy court
28   misapplied the applicable legal standards based on the evidence

                                       -12-
 1   before it.    We disagree for the following reasons.
 2   1.   Ms. Macias
 3        The Debtors argue that Ms. Macias violated the discharge
 4   injunction by pursuing her cross-complaint in the Second Suit
 5   when she had knowledge of the Debtors’ discharge in the Chapter 7
 6   Case from the bankruptcy court and from the Debtors.    The record
 7   before the bankruptcy court contained contradictory evidence on
 8   this point.    The Debtors contended that Ms. Macias received a
 9   copy of their discharge order and presented evidence that the
10   Bankruptcy Noticing Center sent the discharge order to Ms. Macias
11   on May 29, 2009 at the Residence Property.    Ms. Macias countered
12   that she had moved out of the Residence Property following
13   foreclosure in March 2009, and although she had provided a
14   forwarding address for her mail to the postal service, they kept
15   delivering her mail to the Residence Property.    Although
16   Ms. Macias admitted that she knew about the Debtors’ bankruptcy
17   filings, she stated in her Declaration that she did not know that
18   they had received a discharge in this Chapter 7 Case, testimony
19   that she reiterated under oath at the Hearing.    The bankruptcy
20   court found that there was no evidence to the contrary.      The
21   parties presented two not necessarily contrary versions of the
22   facts concerning whether Ms. Macias received a copy of the
23   discharge order and thus knew that the Debtors had received a
24   discharge.    On this mixed record, the bankruptcy court concluded
25   that the Debtors had not proved by clear and convincing evidence
26   that Ms. Macias knew that the discharge injunction was
27   applicable.    We perceive no error in that determination.
28        The bankruptcy court also considered Ms. Gutierrez’

                                      -13-
 1   assertion in her Declaration that Ms. Macias had been informed
 2   that the Debtors had obtained a discharge of their debts during
 3   the course of a settlement conference in 2010.     Noting that over
 4   the course of 18 months of proceedings in the State Court and the
 5   bankruptcy court and in their voluminous papers, the Debtors only
 6   referred to such a communication to Ms. Macias on one occasion,
 7   and no testimony to support this allegation was presented at the
 8   Hearing, despite the fact that Ms. Gutierrez testified, the
 9   bankruptcy court emphatically determined that the Debtors did not
10   establish by clear and convincing evidence that Ms. Macias knew
11   of their bankruptcy discharge from their direct communications.
12   Memorandum Decision, at p. 3 n.3.      Again, we perceive no error in
13   the bankruptcy court’s determination on this point based on the
14   entire record before it.
15        Finally, the Debtors contend that Ms. Macias violated the
16   discharge injunction by cooperating with the investigation of the
17   California Department of Real Estate that resulted in
18   Mr. Gutierrez losing his broker’s license and by speaking against
19   the Debtors’ business practices with people in their common
20   religious community.   The bankruptcy court found no violation of
21   the discharge injunction on these bases for two reasons: first,
22   because the discharge injunction did not prohibit such speech;
23   and second, because no evidence was presented tending to
24   establish that Ms. Macias’ conduct was an effort to collect a
25   discharged debt.   As the bankruptcy court noted, such conduct
26   “would be counter to any collection efforts.”     Memorandum
27   Decision, at p. 5.   We conclude, particularly based on the second
28   rationale articulated by the bankruptcy court for its

                                     -14-
 1   determination, that the bankruptcy court did not err in its
 2   conclusion that such evidence of conduct by Ms. Macias did not
 3   establish a violation of the discharge injunction.
 4        Ultimately, we conclude, based on the record before us, that
 5   the bankruptcy court did not err in deciding that the Debtors did
 6   not meet their burden of proof to establish that Ms. Macias
 7   committed a sanctionable violation of the discharge injunction in
 8   the Chapter 7 Case.
 9   2.   Mr. Coker
10        The Debtors argue that Mr. Coker violated the discharge
11   injunction by assisting Ms. Macias in the preparation of the
12   cross-complaint against them in the Second Suit and in failing to
13   dismiss Ms. Macias’ cross-complaint immediately after receiving
14   notice of the Debtors’ discharge in a letter from Mr. Gutierrez.
15   Mr. Coker is not a creditor of the Debtors, and they do not
16   assert otherwise.
17        The uncontradicted evidence before the bankruptcy court was
18   that Ms. Macias prepared the cross-complaint herself with the
19   assistance of a law student, and it was filed on October 24,
20   2011.   Mr. Coker was not involved in the preparation of the
21   cross-complaint.    From the record before us, it appears that
22   Ms. Macias filed the cross-complaint in an effort to counter the
23   Debtors’ harassment through their State Court lawsuits.
24        The record is also clear that Mr. Coker was not aware of the
25   Debtors’ bankruptcy discharge until receiving Mr. Gutierrez’
26   letter on November 28, 2011.    As noted by the bankruptcy court,
27   Mr. Coker promptly responded two days later on November 30, 2011,
28   stating that if, in fact, the Debtors had discharged their

                                      -15-
 1   obligation to Ms. Macias in bankruptcy, no further collection
 2   efforts would be taken.   However, he also stated that Ms. Macias
 3   was not aware that the Debtors had obtained a discharge, and he
 4   would investigate whether a setoff of the discharged debt might
 5   still be available to Ms. Macias.
 6        The record reflects that Mr. Coker is not a bankruptcy
 7   attorney.   He did file a motion to amend the cross-complaint to
 8   assert only a setoff claim.     However, after consulting with the
 9   bankruptcy counsel retained to represent all of the defendants in
10   the Debtors’ adversary proceeding, Mr. Coker voluntarily
11   dismissed the cross-complaint on February 7, 2012, before any
12   action was taken on the motion to amend.
13        On this record, Mr. Coker could be faulted for failing to do
14   the limited research required to determine that the Debtors’ debt
15   to Ms. Macias in fact had been discharged and to dismiss the
16   cross-complaint more quickly.    However, we conclude that the
17   bankruptcy court did not err in determining that the Debtors did
18   not meet their burden of proof to establish by clear and
19   convincing evidence that Mr. Coker willfully violated the
20   discharge injunction.   Cf. Knupfer v. Lindblade (In re Dyer),
21   322 F.3d at 1196-97.
22                             VI.    CONCLUSION
23        Based on the foregoing authorities and analysis, we AFFIRM
24   the bankruptcy court’s Order denying the Motion.
25
26
27
28

                                       -16-