Jacqueline Sterling v. Southlake Nautilus Health & Racquet Club, Inc.

Jacqueline Sterling spent three-and-a-half days in jail for a debt she didn’t owe. The debt was discharged under Chapter 7. Southlake Nautilus & Racquet Club issued an arrest warrant for Sterling on a $500 debt despite the Discharge Injunction. This case is about forcing the defendant to pay all the true consequences of their contempt of the Bankruptcy Discharge Injunction. When Jacqueline Sterling was arrested she was suspended from her job for ‘suspected criminal activity’. When Sterling sought to renew her Indiana gaming license, she had to again explain the arrest in order to renew her license. When Jacqueline Sterling applied for a gaming license in Colorado a decade later, she had to explain the basis for the erroneous arrest a decade prior. In a case of first impression, the Bankruptcy court applied comparative tort principles to a contempt hearing and placed half the blame for the writ being issued by Southlake in violation of the Discharge Injunction on Sterling. This was improper. The first question presented is whether Sterling is entitled to compensation for the decades long effect of this incarceration on her reputation? The second question presented is whether a party in contempt can seek to apportion blame to the victim?