Court Opinion

ID: 2964853
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:32:13.427425+00
Date Added: 2024-06-11T15:01:43.300124
License: Public Domain

USCA1 Opinion

	

                                [Not for Publication]
                                For the First Circuit
                                ____________________
       Nos. 96-2114, 96-2115
                                HOBBY HORIZONS, INC.,
                                     Appellees,
                                         v.
                             JORGE O. AND JUDITH SAPERE,
                                     Appellants.
                                ____________________
                    APPEALS FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF MASSACHUSETTS
                   [Hon. Douglas P. Woodlock, U.S. District Judge]
                                ____________________
                                       Before
                               Torruella, Chief Judge,
                            Bownes, Senior Circuit Judge,
                              and Stahl, Circuit Judge.
                                ____________________
            Albert Auburn for appellant.
            John Yannis for appellees.
                                ____________________
                                   AUGUST 6, 1997
                                ____________________
                      Per Curiam.    Upon Appellees' Jorge O. and Judith

            Sapere ("Saperes") motion, the bankruptcy court held Appellant
            Hobby Horizons, Inc. ("Hobby") in contempt for willfully
            violating the automatic stay,  see 11 U.S.C. S 362(a), and
            awarded compensatory damages to the Saperes, but declined to
            award punitive damages. The district court affirmed the
            bankruptcy court. Hobby now appeals the finding of contempt
            and the grant of a bankruptcy discharge to the Saperes. The
            Saperes appeal the denial of punitive damages. We affirm for
            substantially the same reasons as the district court and add
            only a few additional comments. 
                      We exercise independent review of the bankruptcy
            court's decision in an appeal from a district court's review,
            granting "no special deference to the district court's
            determinations."  Grella v. Salem 
                                              Five 
                                                   Cent 
                                                        Savings 
                                                                Bank, 42
            F.3d 26, 30 (1st Cir. 1994). Typically we review the
            bankruptcy court's findings of fact for clear error, but
            subject its conclusions of law to 
                                             de 
                                                novo review.  See 
                                                                  id. In
            this case the bankruptcy court made no findings of fact,
            forcing the district court to make its own findings from the
            record. Accordingly, we independently reviewed the record in
            analyzing this appeal. 
                      We are satisfied that the record amply supported the
            district court's findings of fact that Hobby willfully violated
            the stay. Hobby continued pursuing the Saperes despite notice
            of the bankruptcy filing. On that basis, neither the
                                         -2-

            bankruptcy court nor district court erred in holding Hobby in
            contempt. See 
                          Vahlsing v. 
                                      Commercial Union Ins. Co.
                                                               , 928 F.2d
            486, 490 (1st Cir. 1991) (indicating that violation of stay
            requires either willfulness under 11 U.S.C. S 362(h) or other
            common law or statutory basis for liability). 
                      We also find that both courts correctly determined
            that the Saperes' debt to Hobby was discharged, despite the
            fact that the Saperes did not list Hobby as a creditor, because
            Hobby had notice of the filing.   See 11 U.S.C. S 523(a)(3)
            (indicating that discharge is effective with respect to
            unlisted creditor who had notice or actual notice of the case
            in time to submit a timely proof of claim). Should Hobby
            continue to insist that this is not a no asset case, it may
            proceed in accordance with the bankruptcy rules and procedures
            in its efforts to establish that fact. 
                      Finally, we affirm both courts' decisions not to
            award punitive damages to the Saperes. The bankruptcy court
            declined to impose punitive damages because it found that Hobby
            acted out of ignorance rather than malice. While we do not
            condone Hobby's actions, we note that Hobby has been required
            to compensate the Saperes for its conduct. We find no abuse of
            discretion in the denial of punitive damages.      See In  
                                                                       re
            Strumpf, 37 F.3d 155, 159 (4th Cir. 1994),    rev'd 
                                                                on 
                                                                    other
            grounds, Citizens Bank of Maryland v. Strumpf, 116 S. Ct. 286
            (1995).
                                         -3-
                                          3

                      For the reasons exhaustively explained in the
            district court's opinion, we affirm.
                      Affirmed.  Costs to Appellant. 
                                         -4-
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