January 12, 2006: Debtor awarded emotional distress damages of $10,000.00 for law firm's willful violation of the discharge injunction.
A Chapter 7 debtor-wife was entitled to emotional distress damages in the amount of $10,000.00 for a law firm's willful violation of the discharge injunction, an Oregon bankruptcy court has held, noting a split of authority as to whether emotional distress damages are available for violations of the discharge injunction but predicting that the Ninth Circuit would permit them. The law firm, despite having actual knowledge of the debtors' bankruptcy filing and their representation by counsel, made repeated post-discharge efforts to collect a debt allegedly owed by the debtors to a bank. These efforts included a telephone call to the debtor-husband's mother in which the caller falsely stated that the firm's attorney was a prosecuting attorney and the caller threatened to bring criminal charges against the debtor-wife. Although the debtors presented no medical evidence of emotional distress, they testified as to the stress caused them, especially the debtor-wife, by the firm's egregious conduct. Further, the court found, a "reasonable person" would have suffered significant emotional harm from this conduct.
A Chapter 7 debtor-wife was entitled to emotional distress damages in the amount of $10,000.00 for a law firm's willful violation of the discharge injunction, an Oregon bankruptcy court has held, noting a split of authority as to whether emotional distress damages are available for violations of the discharge injunction but predicting that the Ninth Circuit would permit them. The law firm, despite having actual knowledge of the debtors' bankruptcy filing and their representation by counsel, made repeated post-discharge efforts to collect a debt allegedly owed by the debtors to a bank. These efforts included a telephone call to the debtor-husband's mother in which the caller falsely stated that the firm's attorney was a prosecuting attorney and the caller threatened to bring criminal charges against the debtor-wife. Although the debtors presented no medical evidence of emotional distress, they testified as to the stress caused them, especially the debtor-wife, by the firm's egregious conduct. Further, the court found, a "reasonable person" would have suffered significant emotional harm from this conduct.
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