793 F.2d 1541 (11th Cir. 1986), 85-5472, I.A. Durbin, Inc. v. Jefferson Nat. Bank
| Citation | 793 F.2d 1541 |
| Party Name | I.A. DURBIN, INC., a Florida Corporation, and Betty D. Kail, Plaintiffs- Appellants, v. JEFFERSON NATIONAL BANK, a national banking association, AIA Atlantic Moving & Storage, A Florida Corporation, Gary Blurman, Fidelity & Deposit Company of Maryland, a Maryland Corporation, Paul Friedman, Peter Gilheany, Juan Gonzalez, Leroy Metz, James Smith, an |
| Case Date | July 21, 1986 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Eleventh Circuit |
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Holland & Knight, Roma W. Theus, II, Miami, Fla., for I.A. Durbin.
Marc Birnbaum, Zemel & Kaufman, P.A., Miami, Fla., for Betty D. Kail.
Shelley H. Leinicke, Ft. Lauderdale, Fla., for Metz.
Richard L. Lapidus, Miami, Fla., for Jefferson, AIA, Fidelity, Friedman, Burman, Gonzalez and Stuzin.
Robert M. Klein, Stephens, Lynn, Chernay & Klein, P.A., Miami, Fla., for Stuzin & Camner and Friedman.
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Bruce W. Jolly, Ft. Lauderdale, Fla., William H. Ravenell, Dept. of Legal Affairs, Tallahassee, Fla., for Gilheany.
Appeal from the United States District Court for the Southern District of Florida.
Before HILL and ANDERSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.
ANDERSON, Circuit Judge:
Appellants I.A. Durbin, Inc. and Betty D. Kail appeal from the dismissal of their civil rights action under 42 U.S.C.A. Sec. 1983 (West 1981) and pendent state claims. On appeal, they contend that the district court erred in dismissing their Sec. 1983 suit because (1) it is not barred under the doctrines of collateral estoppel and res judicata by the contempt proceeding in the bankruptcy court, (2) the Sec. 1983 claims are ripe for judicial resolution, and (3) the Sec. 1983 action is not duplicative of the state foreclosure action removed to federal court. They also argue that the dismissal of their declaratory relief claims was improper because the issuance of the prejudgment writ of replevin violated the requirements of due process and because the district court had jurisdiction over these claims under 28 U.S.C.A. Sec. 1334(b) (West Supp.1986). Because we find dismissal to be improper in the instant case, we vacate the order of the district court and remand the case to the district court for further proceedings consistent with this opinion.
I. BACKGROUND
Durbin is a construction company located in Broward County, Florida. In March 1984, Jefferson National Bank ("Bank") loaned $500,000 to Durbin. Durbin executed a promissory note to Bank, and as security for the loan, Bank obtained a second mortgage on real estate owned by Durbin, and a security interest in Durbin's contract receivables and household furnishings. Kail, Durbin's president, also signed the note as an accommodation party, and gave Bank a second mortgage on her personal residence.
On July 11, 1984, Bank filed suit against appellants in the Circuit Court for the Seventeenth Judicial Circuit of Florida ("foreclosure action"), alleging that they had defaulted on the loan, and seeking damages for this default and to foreclose on Kail's residence. On July 18, 1984, Bank filed a verified amended complaint which, in addition to the above relief, requested the replevin of the household furnishings in which it claimed a security interest. Pursuant to Fla.Stat.Ann. Sec. 78.068 (West Supp.1986), 1 the court issued a prejudgment
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writ of replevin. Durbin and Kail did not receive notice of this writ prior to its execution.
At 9:00 a.m. on July 19, 1984, Deputy Sheriff Peter Gilheany began executing the writ of replevin. Leroy Metz, a locksmith, the Bank's vice-president, an attorney from Bank's law firm, and AIA Atlantic Moving & Storage Co. were also present during the execution of the writ. At 3:22 p.m., Durbin filed a voluntary petition for bankruptcy under Chapter 11, 11 U.S.C.A. Secs. 1101-1174 (West 1979 & Supp.1986). At approximately 4:30 p.m., Deputy Gilheany was informed of the filing of the bankruptcy petition, and immediately ceased execution of the writ.
Durbin asserted that the seizure of the household furnishings pursuant to the writ of replevin violated the automatic stay of 11 U.S.C.A. Sec. 362 (West 1979 & Supp.1986). 2 When Bank refused to return the furnishings, Durbin moved to have Gary Burman, Bank's vice-president, AIA Atlantic Moving & Storage Co., Deputy Gilheany, Paul Friedman, a member of Bank's law firm, and Ruth Ann Kopsa held in contempt of the automatic stay ("contempt proceeding"). In an order entered September 10, 1984, the bankruptcy court concluded (1) that the defendants should not be held in contempt with respect to either their prepetition or postpetition seizures since "execution upon the Writ in Rock Creek was prior in time to the filing of the Debtor's voluntary petition" and since "the Sheriff or any other individuals or entities present at the Coral Springs replevin had no notice or knowledge of the filing of the voluntary petition;" and (2) that Bank and its counsel "would have been in contempt of the Court for violating the automatic stay for failing to immediately return the Coral Springs personalty [seized after the filing of the petition] but for the fact that they ultimately offered to unconditionally return the Coral Springs Personalty at a time prior to the Hearing." Record on Appeal, vol. 1 at 191 (emphasis in original). The court noted that the defendants had not "intended to wrongfully take possession of Personalty, wrongfully break and enter into premises of the Debtor, or exclude the Debtor from property of the estate." Id.
The bankruptcy court also discussed whether the defendants had failed to comply with Fla.Stat.Ann. Sec. 78.10 (West Supp.1986), which governs the execution of a writ of replevin on property in buildings or enclosures. 3 The court concluded that Sec. 78.10 permitted the sheriff to enter a locked building to execute a writ of replevin if he has "reasonable grounds" to believe that the concealed property is on the premises. Record on Appeal, vol. 1 at 193-96. Finally, the court noted that Florida's statutory provisions for the issuance of a prejudgment writ of replevin had been
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found constitutional by the Florida Supreme Court in Gazil, Inc. v. Super Foods Services, Inc., 356 So.2d 312 (Fla.1978), and refused to find that the statute or the sheriff's execution of the writ was "unconstitutional in any manner." Record on Appeal, vol. 1 at 197.
In its October 3, 1984 order awarding attorney's fees to Durbin, however, the bankruptcy court explained that its prior decision had been confined to the issue of contempt:
In regards to the legal issues presented in these proceedings, and in regards to the Coral Springs home in particular, the Court notes that its conclusions of law are confined to the narrow issue of contempt and it expressly does not decide any legal or factual issues regarding any other remedies or causes of action that the Debtor-in-Possession may have under state or federal law.
Id. at 205. 4
In August 1984, Durbin moved to have the state foreclosure action removed to bankruptcy court pursuant to 28 U.S.C.A. Sec. 1452 (West Supp.1986). The state action was removed to federal court and referred to the bankruptcy court. In its answer, Durbin raised several counterclaims against Bank, alleging that Bank had committed trespass to real and personal property, wrongful conversion, and civil theft; had interfered with advantageous business relationships and with contractual relationships; and had unlawfully replevied Durbin's property "in substantial violation of the requirements of the Florida Replevin Statute and the Constitution of the United States of America and as such were without any lawful authority rendering the writ of replevin null and void and all action taken pursuant thereto unlawful." Record on Appeal, vol. 3 at 517-24. 5
On October 1, 1984, Durbin filed an action in the bankruptcy court under 11 U.S.C.A. Sec. 542 (West 1979 & Supp.1986) for turnover of the household furnishings held by Bank. On December 7, the bankruptcy court ordered Bank to deliver this property to Durbin. Record on Appeal, vol. 3 at 607.
In February 1985, appellants filed the instant suit in the United States District Court for the Southern District of Florida against Bank, its vice-president, Gary Burman, AIA Atlantic Moving & Storage Co., Fidelity & Deposit Company of Maryland, the surety on the replevin bond posted by Bank, Deputy Gilheany, Leroy Metz, the locksmith who opened Durbin's houses, and Bank's law firm and the attorneys involved in the issuance and execution of the writ of repelvin ("appellees"). 6 They alleged that the issuance and execution of the writ of replevin had deprived them of the right to due process under the Fifth and Fourteenth Amendments, the right to be free from unreasonable searches and seizures under the Fourth and Fourteenth Amendments, and the right to equal protection of the laws under the Fourteenth Amendment, in violation of 42 U.S.C.A. Sec. 1983 (West 1981). They also raised pendent state claims for trespass to real and personal
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property, wrongful conversion, civil theft, tortious interference with advantageous business relationships and with contractual relationships, and unlawful replevin of their property. They sought compensatory and punitive damages, declaratory relief, and attorney's fees.
Appellants then moved to withdraw reference of the foreclosure action and the action for turnover of the property seized pursuant to the writ of replevin from the bankruptcy court and to consolidate these actions with their civil rights suit in the district court. The district court, however, denied their motion, concluding that while the proceedings in the bankruptcy court "may involve some issues pertinent to the instant action," they had "simply failed to demonstrate sufficient cause for...
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