Kupperstein v. Schall (In re Kupperstein)

Fred Kuhn died owing approximately $191,000 to MassHealth (creditor) and owning a piece of real property worth $350,000. Donald Kupperstein (debtor) wrongfully claimed the real property and began renting it, pocketing the rent. Kuhn’s estate (creditor), through administrator Irene Schall (creditor), and MassHealth litigated the possession issues with Kupperstein. The probate court ordered Kupperstein to turn over Kuhn’s property and the rent he had collected. Kupperstein did not comply. The probate court held Kupperstein in contempt multiple times and ordered him to pay sanctions. Eventually, the court threatened to jail Kupperstein for contempt. Kupperstein filed for bankruptcy and then claimed the probate court could not touch him because the bankruptcy action had automatically stayed all other actions against him. The probate court jailed Kupperstein for a day and threatened to jail him for 30 days unless he turned over the property’s keys and some unlawfully collected rent. At the next contempt hearing, Kupperstein finally turned over the keys and some cash. Kupperstein then disappeared. The probate court issued a warrant for Kupperstein’s arrest, but he was not located. Schall and MassHealth asked the bankruptcy court to lift the automatic stay on their state-court actions against Kupperstein. Kupperstein’s counsel asked the bankruptcy court to hold MassHealth in contempt for having participated in the probate court’s contempt hearings after the bankruptcy action was filed, arguing those hearings had violated the automatic stay. The bankruptcy court determined that the automatic stay did not apply to the probate court’s contempt proceedings. The bankruptcy court (1) lifted the automatic stay to allow Schall and MassHealth to litigate their court actions against Kupperstein on any issue other than MassHealth’s $191,000 claim against Kupperstein’s bankruptcy estate and (2) dismissed Kupperstein’s motion to hold MassHealth in contempt. The district court affirmed the rulings. Kupperstein appealed.