Actual Notice as a Prerequisite to Civil Contempt for Discharge-Injunction Violations; Broad Discretion over Discovery Sanctions Reaffirmed

Introduction

In Shirley White‑Lett v. Shellpoint Mortgage Servicing (and Select Portfolio Servicing, Inc.), the Eleventh Circuit (per curiam, non‑argument calendar, unpublished) affirmed the bankruptcy and district courts’ refusal to hold Select Portfolio Servicing, Inc. (SPS) in civil contempt for violating the bankruptcy discharge injunction and declined to disturb the bankruptcy court’s resolution of discovery disputes. The appeal arose from an adversary proceeding in which the debtor, proceeding pro se, alleged that SPS and Shellpoint attempted to collect a mortgage debt previously discharged in bankruptcy. At summary judgment, the bankruptcy court granted Shellpoint judgment but found SPS had violated the discharge order, then held a focused bench trial on whether SPS knew of the discharge when it attempted collection. Concluding SPS lacked knowledge, the court declined civil contempt and also denied discovery sanctions. The district court affirmed, and the Eleventh Circuit now does so as well.

Two central issues frame the opinion:

Whether the bankruptcy court abused its discretion in declining to hold SPS in civil contempt for violation of the discharge injunction (§§ 524(a)(2), 105(a)).
Whether the bankruptcy court abused its discretion in declining to sanction SPS for alleged discovery misconduct.

A preliminary appellate wrinkle: the debtor did not brief any challenge to Shellpoint’s summary judgment, and the Eleventh Circuit deems that issue abandoned on appeal.

Summary of the Opinion

Civil Contempt: Affirmed. Although the bankruptcy court found SPS’s conduct violated the discharge injunction, it credited SPS’s representative’s testimony that SPS lacked knowledge of the discharge order at the time of collection efforts. Because actual notice is a prerequisite for civil contempt of an injunction, and because credibility determinations are entitled to strong deference, the bankruptcy court acted within its discretion in declining contempt sanctions.
Discovery Sanctions: Affirmed. The bankruptcy court did not abuse its wide discretion. There was no order compelling the specific documents the debtor claims were withheld; the court remedied earlier disclosure failures by reopening discovery; privilege objections during a deposition were proper; and an additional document complaint was unpreserved below.
Abandonment: Any challenge to Shellpoint’s summary judgment was abandoned by failure to brief it.

Analysis

Precedents Cited and Their Role

Taggart v. Lorenzen, 587 U.S. 554 (2019): Establishes the governing standard for civil contempt for discharge violations. Courts may impose civil contempt sanctions when “there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order,” incorporating traditional equity standards and emphasizing the severity of contempt and the need for fair notice.
11 U.S.C. §§ 524(a)(2), 105(a): § 524(a)(2) imposes the discharge injunction; § 105(a) provides the bankruptcy court discretionary authority to issue orders necessary to carry out the Code, including civil contempt.
Jove Engineering, Inc. v. IRS, 92 F.3d 1539 (11th Cir. 1996): Confirms the discretionary nature of § 105(a) powers in bankruptcy, including contempt for violations of the discharge injunction.
Fed. R. Civ. P. 65(d)(2) and Cypress Barn, Inc. v. Western Electric Co., Inc., 812 F.2d 1363 (11th Cir. 1987): Injunctions bind only parties who receive actual notice; one cannot be held in civil contempt for violating an order of which they had no notice.
Anderson v. City of Bessemer City, 470 U.S. 564 (1985); Fed. R. Civ. P. 52(a)(6); Fed. R. Bankr. P. 7052: Appellate courts must give “due regard” to the trial court’s ability to assess witness credibility; only clear contradictions or inherently implausible testimony will justify overturning credibility findings.
Iberiabank v. Geisen (In re FFS Data, Inc.), 776 F.3d 1299 (11th Cir. 2015); McGregor v. Chierico, 206 F.3d 1378 (11th Cir. 2000): Standards of review in bankruptcy appeals; denial of civil contempt reviewed for abuse of discretion; legal issues de novo; factual findings for clear error.
Romeo Charlie, Inc. v. Piper Aircraft Corp. (In re Piper Aircraft Corp.), 362 F.3d 736 (11th Cir. 2004): Discovery rulings in bankruptcy reviewed for abuse of discretion.
Daughtrey v. Rivera (In re Daughtrey), 896 F.3d 1255 (11th Cir. 2018); CFPB v. Brown, 69 F.4th 1321 (11th Cir. 2023): Abuse-of-discretion review recognizes a range of permissible outcomes; discovery sanctions decisions are fact-sensitive and rely on the trial court’s first-hand management of the case.
Fed. R. Civ. P. 37(c)(1), 37(d)(1)(B): Sanction framework for failure to disclose and failure to confer before seeking discovery sanctions.
Timson v. Sampson, 518 F.3d 870 (11th Cir. 2008): Issues not briefed by a pro se appellant are abandoned.
Valdez v. Feltman (In re Worldwide Web Systems, Inc.), 328 F.3d 1291 (11th Cir. 2003): Appellate courts decline to address issues not raised before the bankruptcy court (forfeiture/waiver).

Legal Reasoning

Standards of Review

Law: De novo.
Fact findings: Clear error; strong deference to credibility determinations.
Sanctions (civil contempt; discovery): Abuse of discretion; broad latitude to the bankruptcy court managing its docket and supervising discovery.

Civil Contempt for Discharge-Injunction Violations

The bankruptcy court found a discharge violation but declined to impose contempt, focusing on SPS’s knowledge of the discharge at the time it sought to collect. It conducted a bench trial limited to that question. SPS’s corporate representative, supported by the loan file, testified there was no record of the bankruptcy or discharge; the debtor testified she mentioned the discharge in a single December 2013 call. The court credited SPS’s witness and discredited the debtor’s testimony based on demeanor, inconsistencies, and mischaracterizations across the proceedings.

The Eleventh Circuit’s analysis proceeded in two steps:

First, deference to credibility findings. Under Anderson and Rule 52(a)(6), appellate courts do not disturb a trial judge’s credibility call absent contradiction by documents or objective evidence or implausibility on its face. The record showed no contradictions in SPS’s testimony and supported SPS with the absence of any notation in its internal file.
Second, the knowledge/notice prerequisite to contempt. While Taggart supplies the “no objectively reasonable basis” standard for when contempt is appropriate, Rule 65(d)(2) and Cypress Barn underscore that contempt cannot be imposed on a party without actual notice of the injunction. The bankruptcy court’s finding that SPS lacked knowledge fit squarely within that principle, and therefore declining contempt was not an abuse of discretion.

In short, the opinion clarifies an important nuance: a court may find a discharge violation occurred, yet decline to hold the creditor in civil contempt if the creditor lacked actual notice and thus could have an objectively reasonable basis to believe its conduct was lawful. Civil contempt is a “severe remedy,” and Taggart requires fair notice before sanctions attach.

Discovery Sanctions

The debtor argued SPS failed to produce “bankruptcy quality control reviews” and “bankruptcy status checks” and disobeyed an October 8, 2021 discovery order. The Eleventh Circuit rejected that characterization:

The October 8 order did not compel production of those items. The bankruptcy court found at that juncture that SPS had produced requested materials and instructed that any further requests could be made, with privilege logs if appropriate. No subsequent requests were made, and the debtor later conceded she never requested those specific items. Moreover, trial testimony indicated these were actions performed by employees, not discrete documents.
As to a “Contact History” document, SPS initially produced only one redacted page and failed to disclose the document in initial disclosures. In an August 4, 2021 order, the bankruptcy court found disclosure failures but, finding no bad faith and curable prejudice, declined exclusionary sanctions and reopened discovery to allow full disclosure. SPS then produced the entire unredacted contact history. The Eleventh Circuit held that measured response fell comfortably within the court’s broad discretion under Rule 37.
Deposition conduct: SPS’s counsel instructed its witness not to answer questions about redactions to the extent the answers would disclose attorney‑client privileged information. The bankruptcy court deemed those privilege objections proper and found no concealment of information SPS was required to disclose. The Eleventh Circuit saw no abuse of discretion in that ruling.
Finally, the debtor raised for the first time on appeal that SPS failed to produce a “summary page” referenced at trial. Because the issue was not raised in the bankruptcy court, the Eleventh Circuit declined to consider it (Worldwide Web Systems).

The throughline is adherence to the abuse‑of‑discretion standard: the bankruptcy court reasonably managed discovery, required curing disclosures rather than imposing harsh sanctions in the absence of bad faith, and did not issue an order that SPS later defied.

Impact and Practical Significance

Clarifies the proof burden for contempt of the discharge injunction: A debtor must carry the evidentiary load on knowledge/notice. A mere violation is not self‑executing for contempt. Absent actual notice (or evidence undercutting a creditor’s claim of lack of notice), contempt sanctions will be difficult to sustain post‑Taggart.
Reinforces deference to trial courts on credibility: Where the bankruptcy judge conducts a focused bench trial on knowledge, appellate review is narrow. Documentary corroboration—or contradictions—will be decisive on appeal.
Signals best practices for creditors/servicers: Maintain robust bankruptcy flagging protocols and loan‑file documentation. If a servicer can demonstrate no notice of a discharge, it can defeat contempt even if a technical violation occurred.
Signals best practices for debtors: To position for contempt remedies, create a paper trail. Send written notice of the discharge and keep confirmations; memorialize calls in writing; and, when litigating, marshal objective evidence (e.g., correspondence, call logs, file notes) that shows creditor notice.
Discovery management: The opinion endorses flexible, remedial approaches to disclosure missteps—reopening discovery to cure prejudice rather than defaulting to sanctions—particularly absent bad faith. Parties seeking sanctions should ensure they have made clear requests, conferred as Rule 37 requires, and secured (or sought) a specific court order before claiming defiance.
Appellate practice for pro se litigants: Unbriefed issues are abandoned (Timson). Preserve issues in the trial court (Worldwide Web Systems) and brief them on appeal to secure review.
Precedential weight: Although unpublished and “not for publication,” the decision reflects and applies well‑settled Eleventh Circuit and Supreme Court standards; it is persuasive on how those standards operate in discharge‑injunction and discovery contexts.

Complex Concepts Simplified

Discharge Injunction (§ 524(a)(2)): When a debtor receives a bankruptcy discharge, creditors are enjoined from attempting to collect discharged debts. It’s a court‑ordered prohibition.
Violation vs. Civil Contempt: A creditor can technically violate the discharge injunction (e.g., by sending a collection letter), but civil contempt sanctions are not automatic. Contempt requires that the creditor had actual notice of the injunction and that there was no objectively reasonable basis to think the conduct was permitted. Contempt is a coercive/remedial tool, not a strict‑liability penalty.
“Objectively Reasonable Basis” (Taggart): The question isn’t the creditor’s subjective good faith; it’s whether a reasonable person, aware of the discharge order and the relevant facts, could think the conduct might be lawful under that order.
Actual Notice (Rule 65(d)(2)): Injunctions bind those who receive actual notice of them. No notice, no contempt.
Standards of Review:
- De novo: The appellate court independently decides legal questions.
- Clear error: The appellate court defers to the trial court’s findings of fact unless left with a firm conviction a mistake has been made.
- Abuse of discretion: A range of reasonable outcomes is tolerated; reversal requires a clear error of judgment or application of the wrong legal standard.
Rule 37 Sanctions: Courts can sanction parties for failing to disclose required information or for discovery misconduct. But sanctions often require a showing of prejudice, bad faith, or disobedience of a specific order, and parties typically must meet and confer before seeking sanctions.
Abandonment and Forfeiture on Appeal: If an appellant doesn’t brief an issue, it’s abandoned. If an issue wasn’t raised below, it is generally forfeited and not considered on appeal.

Conclusion

The Eleventh Circuit’s unpublished affirmance in White‑Lett delivers a crisp restatement of two bedrock principles in bankruptcy litigation. First, civil contempt for discharge‑injunction violations turns on notice and objective reasonableness: without actual notice of the discharge order, contempt sanctions will not lie, even if a violation occurred. Second, discovery management rests squarely within the bankruptcy court’s broad discretion; absent clear disobedience of a court order, bad faith, or incurable prejudice, measured remedial steps—like reopening discovery—are appropriate and affirmed on appeal.

For debtors, the case underscores the importance of generating and preserving objective proof that a creditor knew about the discharge. For creditors and servicers, it emphasizes maintaining accurate bankruptcy indicators and loan‑file documentation to demonstrate either notice or its absence. For all litigants, it reiterates the necessity of clear discovery requests, compliance with meet‑and‑confer obligations, and proper issue preservation for appeal.

While not precedential, the decision integrates Supreme Court guidance in Taggart with Eleventh Circuit doctrine on injunction notice, credibility deference, and discovery discretion—providing a practical roadmap for future discharge‑injunction contempt disputes and discovery management in adversary proceedings.