IN RE EGBARIN

ROBERT KRECHEVSKY, Bankruptcy Judge

The contested matter before the court in this reopened Chapter 7 case is the motion for contempt filed by Nitor V. Egbarin ("the debtor") against The Law Office of Robert H. Weinstein, Robert H. Weinstein (together "Weinstein"), and Steven C. Shifreen, M.D. (together "the respondents"). The court held a hearing on the motion on September 13, 2007, at which the debtor and Weinstein testified and seven exhibits were received into evidence. The debtor also submitted a memorandum of law at the hearing.

There is little dispute over the facts of the claimed contempt. The debtor, who was or is an attorney, commenced, with his wife, a joint Chapter 7 case on November 27, 2000. The debtor listed as a debt a civil judgment for $26,000 rendered in 1997 in the Connecticut Superior Court in favor of Steven C. Shifreen ("Shifreen"). Weinstein then entered his appearance in the debtor's bankruptcy case on behalf of Shifreen. The court granted the debtor a discharge from debt on June 5, 2001. The estate trustee thereafter filed a report of no assets available for distribution and the court closed the debtor's case on July 23, 2004.

Weinstein, stating he had not remembered the debtor's bankruptcy case and discharge, on June 28, 2007, filed in the Connecticut Superior Court a "petition for examination of judgment debtor" on behalf of Shifreen, referring to the 1997 state-court judgment, together with a subpoena duces tecum, which Weinstein signed on July 27, 2007. The state court set a hearing date of September 4, 2007. A marshal, on August 16, 2007, served the court papers on the debtor at his residence.

The debtor, acting pro se, filed an "Objection to Subpoena" with the state court on August 28, 2007, stating that he had listed the Shifreen debt in his bankruptcy petition and had received a discharge, all of which the respondents were aware; and he attached a copy of the "Motion for Contempt filed in the Bankruptcy court." (Exh. 3.) Weinstein immediately withdrew the state-court petition.

The debtor's motion, filed by his attorney Gregory Osakwe, Esq., requests the court to find the respondents "in civil and criminal contempt and to punish and impose appropriate sanctions, including, incarceration, damages, reasonable attorneys' fees . . . and costs. . . ." (Motion at 4.) The debtor's memorandum filed at the hearing requests the respondents be incarcerated, the debtor be awarded compensatory and punitive damages of $50,000, reasonable attorney's fees of $4,125, and costs of $214.08.

"Section 524 of the bankruptcy code provides that discharge `operates as an injunction against the commencement or continuation of an action . . . to collect, recover or offset any [discharged] debt as a personal liability of the debtor.' 11 U.S.C. § 524(a)(2). A party who knowingly violates the discharge injunction can be held in contempt under section 105(a) of the bankruptcy code." In re Zilog, Inc. 450 F.3d 996, 1007 (9th Cir. 2006). "Civil contempt sanctions may be fashioned to coerce compliance or to compensate a complainant for his actual losses, and are to be distinguished from criminal contempt sanctions which are intended to punish a contemnor or to vindicate a court's authority." Stockschlaeder McDonald v. Kittay (In re Stockbridge Funding Corp.), 158 B.R. 914, 918 (S.D.N.Y. 1993). A court may hold a party in civil contempt for failure to comply with an order where (1) the order is clear and unambiguous, (2) proof of noncompliance is clear and convincing, and (3) the party has not been reasonably diligent in attempting to accomplish what was ordered. See EEOC v. Local 580, 925 F.2d 588, 594 (2d Cir. 1991).

Weinstein does not argue that the discharge injunction was ambiguous or that it was not violated. He acknowledged that he had failed to note the discharge in his files and did not recall the debtor's bankruptcy when he filed the 2007 state-court proceeding. Weinstein did, however, immediately withdraw the state-court action when the debtor objected on grounds that the debt had been discharged. The debtor, although requesting incarceration and punitive damages, provides no basis for the imposition of criminal sanctions, and the court concludes that, although Weinstein violated the discharge injunction, the record does not support a finding that his conduct was so egregious as to warrant consideration of criminal sanctions.

The debtor seeks compensatory and punitive damages for emotional distress. The debtor testified that he was "worried, concerned and anxious" following service of the summons, at the prospect of being unable to comply with the subpoena that sought a comprehensive disclosure of his assets and tax returns and being arrested, and by seizure of his assets and that he "couldn't sleep that night." The court concludes that the debtor's claim for emotional distress damages lacks merit. The debtor had been a practicing attorney unlikely to be overwhelmed and intimidated by being served with a summons and subpoena regarding a discharged debt. As an attorney, the debtor was familiar with the judicial process. He filed pro se the objection that led to dismissal of the state-court proceeding. In addition, the debtor, in 2002, while his case remained pending, moved, pro se, against a creditor for violation of the discharge injunction, requesting civil and criminal sanctions. See In re Egbarin, 286 B.R. 45 (Bankr. D.Conn. 2002) (debtor's motion against Connecticut Diagnostics, LLC and Robert Schwer). In that matter, as here, the creditor promptly withdrew its state-court action after being sent a request for withdrawal together with a copy of the discharge. The court held the request for civil contempt sanctions unsupported by any evidence of damages and the request for criminal contempt sanctions frivolous. Id. at 48. As in the prior proceeding, the debtor has presented no evidence to support his claim for compensatory damages for emotional distress, testifying that the only expenses he incurred as a result of the state-court matter were his attorney's fees and costs. Furthermore, absent egregious conduct on the part of the creditor, punitive damages are rarely awarded in civil contempt actions for violation of the discharge injunction. See Rey v. Laureda (In re Rey), 324 B.R. 449, 458 (Bankr. E.D.N.Y. 2005).

The debtor also seeks an award of attorney's fees of $4,125.00 and costs of $214.08. "Pursuant to the `American Rule,' the prevailing litigant is ordinarily not entitled to collect attorneys' fees from the loser." Id. at 457. Although the court has discretion to award attorney's fees in a civil contempt proceeding for violation of the discharge injunction, any such award must be reasonable in light of the circumstances. The debtor's substantive claims for compensation have been denied by the court as unsupported. The purpose of a civil contempt proceeding is to coerce compliance or compensate the party injured by a violation of an order or injunction. New York State Nat. Organization for Women v. Terry, 159 F.3d 86, 93 (2d Cir. 1998). The respondents withdrew the state-court action on or before the debtor filed the motion; thus the motion served no coercive purpose.

The evidence presented indicates that neither the debtor nor his attorney made any attempt to contact Weinstein prior to filing the instant motion. The debtor was aware that the debt at issue had been discharged and was unenforceable. In light of the circumstances presented, the court concludes that the debtor incurred attorney's fees in excess of what was necessary to remedy the violation of the discharge injunction. The court, in its discretion, awards the debtor attorney's fees of $687.50 (for two and one-half hours at $275 per hour) and costs of $214.08, payable by Weinstein.

In accordance with the forgoing discussion, the court concludes that the debtor's motion for contempt be granted to the extent of an award of $901.58, and denied as to the remainder of the claims asserted therein. Judgment will so enter.