JACOBS v. BRAIN POWER AMERICA INC (2018)

MEMORANDUM ***

Appellant Debra Leigh Jacobs appeals the district court's order affirming the bankruptcy court's denial of her motion to hold creditor Brain Power America, Inc. and its attorney in contempt for violating a stay and discharge order. We review the bankruptcy court's contempt and sanctions decision for an abuse of discretion, In re Icenhower, 755 F.3d 1130, 1138 (9th Cir. 2014), and we affirm.

To prevail, Jacobs had to establish by clear and convincing evidence not only that Brain Power actually violated the stay or discharge order but also knew the orders applied and intended to violate them. See, e.g., In re Zilog, Inc., 450 F.3d 996, 1007 (9th Cir. 2006); Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1215 (9th Cir. 2002).

The majority of courts to address this issue have held that merely renewing an existing judgment lien does not “create, perfect, or enforce” a lien under the Bankruptcy Code, and it does not violate a stay. See, e.g., In re Morton, 866 F.2d 561, 564 (2d Cir. 1989); In re Silva, 215 B.R. 73 (Bankr. D. Idaho 1997). Even if we were to accept Jacobs's argument that renewal of the judgment violates the stay, it would not establish that Brian Power knew this act would do so.¹ That argument would also fail to establish that Brain Power knew that the stay applied to the lien because Jacobs did not list Brain Power as a creditor in the original bankruptcy proceeding. The bankruptcy court did not abuse its discretion by denying the motion.

AFFIRMED.

FOOTNOTES

1.   Whether the renewal of a judgment violates a stay is an open question in the Ninth Circuit. See In re Spirtos, 221 F.3d 1079, 1081 (9th Cir. 2000).