Nicholas M. James v. Faith Dorothy Waters

The motion to dismiss by defendant Faith Dorothy Waters, a.k.a. Faith James Waters (“Defendant”) is GRANTED. (11 U.S.C. § 524 (a)(2).)

The motion is DENIED to the extent it seeks sanctions, attorneys’ fees, and a finding of contempt for violation of the discharge injunction. Enforcement of the Section 524 discharge injunction through civil contempt lies within the exclusive jurisdiction of the United States Bankruptcy Court that issued the discharge, not this Court.

Plaintiffs’ request for sanctions under Code of Civil Procedure sections 128.7 and 1008(d) is DENIED.

Legal Standard

A discharge order “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset” a discharged debt. (11 U.S.C. § 524 (a)(2).)

Factual and Procedural Background

This action arises out of the administration of the estate of Nicholas D. James (“Decedent”), who died on December 4, 2020. Decedent was the brother of Defendant. Plaintiffs Nicholas M. James and Tristan Scaglione (“Plaintiffs”) are Decedent’s children and Defendant’s niece and nephew. The underlying complaint, filed January 24, 2023, alleges that Defendant misappropriated funds from Decedent under a power of attorney and after his death but before her appointment as executor, and asserts claims for fraud, conversion, elder abuse, and breach of fiduciary duty. (See Complaint, 1/24/23.)

On November 13, 2025, Defendant and her husband, Roger Waters, filed a joint voluntary petition under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California, Case No. 25-30929. Plaintiffs received notice of the same. (Declaration of Kathleen C. Miller, ¶ 3.) Defendant and her husband scheduled this lawsuit as an unsecured claim on Schedule E/F, identifying “Nicholas M. James and Tristan Scaglione” as creditors, listing the debt in the amount of $72,921.00, describing it as an “Unlimited civil suit,” and cross-referencing “Case No. CIV 2300174.” (Birnberg Decl., Exh. B.)

The bar date to file a complaint objecting to the discharge of a scheduled debt was February 17, 2026. (Birnberg Decl., Exh. C.) Plaintiffs did not file any adversary proceeding or complaint to determine dischargeability by that date. (Birnberg Decl., Exh. D.) On February 18, 2026, the bankruptcy court granted the debtors a discharge under 11 U.S.C. section 727. (11 U.S.C. § 727; see also Birnberg Decl., Exh. D.) Additionally, the trustee filed a report of no distribution. (Birnberg Decl., Exh. E.) The discharge was filed with this Court on March 26, 2026. (Ibid.)

Discussion

A discharge under Chapter 7 relieves the debtor from all debts that arose before the order for relief, “‘[e]xcept as provided in section 523.’” (Taggart v. Lorenzen (2019) 587 U.S. 554, 558.) A discharge “voids any judgment” determining the personal liability of the debtor on a discharged debt and “operates as an injunction against the commencement or continuation of an action . . . to collect, recover or offset any such debt as a personal liability of the debtor.” (11 U.S.C. § 524.) The discharge order thus “‘operates as an injunction’ that bars creditors from collecting any debt that has been discharged.” (Taggart, supra, 587 U.S. 554, at p. 558.)

U.S.C. section 523(a) excepts certain debts from discharge, including debts for fraud or false representation (§ 523(a)(2)), for “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny” (§ 523(a)(4)), and for “willful and malicious injury by the debtor” (§ 523(a)(6)). (11 U.S.C. § 523.) These three exceptions are not self-executing. Under section 523(c)(1), “the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) . . . unless, on request of the creditor . . . and after notice and a hearing, the court determines such debt to be excepted from discharge.” (11 U.S.C. § 523.)

The Supreme Court has confirmed that these are the only “three categories of debts for which creditors must obtain advance determinations” of nondischargeability. (Taggart, supra, 587 U.S. 554, at p. 564.) The mechanism and deadline for obtaining that determination are prescribed by Federal Rule of Bankruptcy Procedure 4007(c): a complaint to determine dischargeability under section 523(c) “must be filed within 60 days after the first date set for the § 341(a) meeting of creditors,” and any motion to extend must be filed “before the time expires.” (Fed.

R. Bankr. P. 4007.) That deadline may be extended only as Rule 4007(c) itself permits, or only on a timely pre-expiration motion, so a court has no authority to extend it after the bar date has passed. (Fed. R. Bankr. P. 9006.) The consequence of inaction is spelled out in the Advisory Committee’s own commentary to Rule 4007: “The bankruptcy court has exclusive jurisdiction to determine dischargeability of these debts. If a complaint is not timely filed, the debt is discharged.” (Fed. R. Bankr.

P. 4007.)

Additionally, lack of formal notice does not preserve such a debt where the debt was scheduled or the creditor otherwise had timely knowledge of the case. Section 523(a)(3) excepts a debt from discharge only where it was “neither listed nor scheduled” in time to permit the creditor to act, and even then the exception does not apply where “such creditor had notice or actual knowledge of the case in time” to file. (11 U.S.C. § 523(a)(3).)

This Court retains concurrent jurisdiction with the bankruptcy court to give effect to a discharge as an affirmative defense, for example, when “the debtor interposes in a state court collection action the defense of discharge in bankruptcy.” (In re Hellhoff, No. 09-81880-MHM, 2011 WL 873447 (Bankr. N.D. Ga. Mar. 14, 2011), p. 2 fn 2.) Indeed, the Supreme Court has observed that state courts “have concurrent jurisdiction over” the question whether a debt has been discharged. (Taggart, supra, 587 U.S. 554, at p. 564.)

But there is a firm line between recognizing a discharge defensively and enforcing the discharge injunction through contempt. “’[W]hile state courts have concurrent jurisdiction to enforce a discharge injunction as an affirmative defense in collection suits, only the bankruptcy court that issued the discharge order may offer a contempt remedy for an alleged violation.’” (In re Miller, 674 B.R. 316, 329 (Bankr. D. Md. 2025).) There is no private right of action under section 524, and a motion for contempt to enforce the discharge injunction “must be brought via motion in the bankruptcy case.” (Barrientos v.

Wells Fargo Bank, N.A. (9th Cir. 2011) 633 F.3d 1186, 1188.) The remedy for a violation “is limited to contempt . . . which must be decided by the court that entered the discharge.” (In re Fagan, 559 B.R. 718, 727 (Bankr. E.D. Cal. 2016).) Where such relief is sought, a court may hold a creditor in civil contempt only if there is no fair ground of doubt as to whether the order barred the creditor’s conduct. (Taggart, supra, 587 U.S. 554 at p. 565.)

Here, and despite receiving the Notice of Bankruptcy Case Filing advising that the recipient “may be a creditor of the debtor” (Miller Decl., Exh. A), Plaintiffs failed to file any adversary proceeding or complaint by February 17, 2026 in the bankruptcy court to determine dischargeability and Defendant’s debt was discharged on February 18, 2026. The discharge enjoins Plaintiffs from proceeding with this action against Defendant as set forth above.

Accordingly, Defendant’s motion to dismiss is granted.

Further, the Court is without jurisdiction to determine whether there has been a violation of the discharge injunction and thus denies any request regarding the same.

Plaintiffs’ request for contempt and sanctions pursuant to Code of Civil Procedure sections 1008(d) and 128.7 is, likewise, denied.

All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.

The Zoom appearance information for August, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1615487764?pwd=Ob4B5J7LLKcpnkxzJjjEOSHNzEGafG.1

Meeting ID: 161 548 7764 Passcode: 502070 If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov