Pre-petition, the debtor leased retail space to operate a restaurant through a limited liability company.  The debtor and the LLC also executed an unsecured note in consideration for the purchase of equipment to be used in the restaurant’s operations.  The lessor filed a complaint in state court and obtained a judgment based on the note obligation in the approximate amount of $15,000; the judgment was recorded at a time when neither the debtor nor the LLC owned real property in the county.  The debtor filed a chapter 7 petition and eventually obtained a discharge, notice of which was sent to all the defendants.

            Post-petition, the debtor received a letter seeking to collect a debt arising from the note judgment.  Subsequently, the debtor and the LLC were also served with a summons to answer interrogatories.  The debtor asserts that he was “badgered” for forty-five minutes about his personal financial condition when he declined to answer certain questions.  The parties appeared in state court on the interrogatories, which was eventually dismissed by the Albemarle County Judge.  Nothing in the record indicated that the defendants continued collection efforts after the dismissal.

            The debtor then filed a motion seeking compensatory and punitive damages for violation of the discharge injunction.  The Court found that the actions clearly violated the discharge injunction and that the defendants knew that the discharge injunction was invoked, particularly given that the collection efforts continued even after being informed of the application of discharge injunction.  The Court determined that sanctions were appropriate, but only in an amount necessary to deter future violations taking into account that this was the first time these defendants were before the Court on such charges and that the parties could have brought the dispute to an end long before bringing it before the Court.