In Manikan v. Peters & Freedman L.L.P., No. 19-55393, 2020 WL 6938318 (9th Cir. Nov. 25, 2020) the Ninth Circuit Court of Appeals addressed whether a debtor was precluded from bringing a Fair Debt Collection Practices Act (“FDCPA”) claim against his homeowner’s association when the claim at issue was based not on the association’s improper attempt to collect a debt that had been discharged via a discharge order but, instead, on a debt that had been fully paid pursuant to the terms of a confirmed Chapter 13 plan. With respect to the former, the Ninth Circuit had previously held in Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002) that the proper remedy for a discharge violation was a contempt proceeding pursuant to 11 U.S.C. § 105(a), not an FDCPA claim. The homeowner’s association argued that Walls compelled a similar outcome in the debtor’s action against it.
The Ninth Circuit in Manikan, however, disagreed emphasizing that the debt owed to the homeowner’s association had not been discharged via the discharge order but instead via payments that the debtor made prior to entry of the discharge order as part of his Chapter 13 plan. The debtor, the Ninth Circuit noted, did “not seek to remedy a violation of his discharge order.” Id. at 3. Instead, he alleged that the homeowner’s association and its agent “tried to collect a debt that he fully paid nearly two years before his discharge.” Id. (emphasis added). Even if the debtor had never received a discharge, he could still assert that the association had “acted unlawfully by attempting to collect a debt that he fully satisfied” which distinguished the Manikan case from Walls. Id.