In re Sterling

In a civil contempt proceeding arising out of a bankruptcy matter, the Seventh Circuit considered the appropriate remedies where the bankruptcy court found that a creditor violated the court’s discharge order and that this violation resulted in the debtor being arrested for a failure appear at a hearing on the creditor’s collection action. The bankruptcy court allocated half the liability for the debtor’s lost wages and emotional distress as well as for reasonable attorney’s fees that the debtor incurred in prosecuting the contempt proceeding to each party. The Seventh Circuit vacated in part, explaining that the bankruptcy court did not recognize that different principles applied to compensatory damages and to attorney’s fees awards and remanded for the bankruptcy court to determine whether to reduce the creditor’s liability for attorney’s fees based on the actions of the debtor. The Seventh Circuit also noted that it would leave it to the bankruptcy court on remand to set a deadline for the filing of a bill of costs. (BRENNAN, concurring and ROVNER, specially concurring)