In re Arminio

• Decision Date: 16 March 1984
• Docket Number: Adv. No. 5-83-0520.,Bankruptcy No. 5-83-00163
• Citation: 38 BR 472
• Court: U.S. Bankruptcy Court — District of Connecticut
• Parties: In re Shirley Mae ARMINIO, Debtor. Shirley Mae ARMINIO, Plaintiff, v. COMMISSIONER OF MOTOR VEHICLES, Defendant.

38 B.R. 472 (1984)

In re Shirley Mae ARMINIO, Debtor Shirley Mae ARMINIO, Plaintiff, v. COMMISSIONER OF MOTOR VEHICLES, Defendant.

Bankruptcy No. 5-83-00163, Adv. No. 5-83-0520.

United States Bankruptcy Court, D. Connecticut.

March 16, 1984.

COPYRIGHT MATERIAL OMITTED

Francis X. Dineen, Joanne S. Faulkner, New Haven Legal Assistance Ass'n, Inc., New Haven, Conn., for plaintiff.

Joseph I. Lieberman, Atty. Gen., L.D. McCallum, Asst. Atty. Gen., State of Conn., Hartford, Conn., for defendant.

MEMORANDUM AND ORDER

ALAN H.W. SHIFF, Bankruptcy Judge.

I. BACKGROUND

This matter is before the court on the complaint of the debtor, seeking a determination that the defendant is in civil contempt for violating the automatic stay under Bankruptcy Code § 362(a) and this Court's July 12, 1983 order of discharge pursuant to Bankruptcy Code § 524(a). The plaintiff further claims that she is entitled to damages under 42 U.S.C. § 1983 because the defendant deprived her of her civil rights, privileges or immunities under color of state law. As a consequence, the plaintiff seeks "appropriate orders" for contempt and violation of plaintiff's civil rights, including attorney's fees.

It should be observed at the outset that although the plaintiff's complaint seeks relief from the "defendant and his attorney", there is insufficient basis for including the defendant's attorney as a party in this proceeding. The defendant's attorney in this proceeding is the Attorney General of the State of Connecticut, Joseph I. Lieberman, by appearance dated November 1, 1983. The Attorney General was not named by the plaintiff in the caption of her complaint (see Fed.R.Civ.P. 10(a), Bankr.R. 7010). Neither the summons prepared by the Clerk's Office of this Court nor the bankruptcy cover sheet prepared by the plaintiff's attorney named the Attorney General as a defendant. Indeed each of those documents identified the Commissioner of Motor Vehicles as the sole defendant, and the plaintiff has made no attempt to amend. Assuming arguendo that the Attorney General of the State of Connecticut was served a copy of the plaintiff's complaint by the October 6, 1983 service upon "L.D. McCallum, AAG", it is apparent that he was served in his capacity as attorney for the Commissioner of Motor Vehicles. The mere reference to the defendant's attorney in the plaintiff's claim for relief is insufficient to make him a party to this proceeding.¹ Accordingly, any claim the plaintiff may have against the Attorney General of the State of Connecticut will not be discussed further.

The facts necessary for a determination of the issues presented may be summarized as follows:²

On March 8, 1982, the plaintiff was involved in a motor vehicle accident. On August 8, 1982, the Connecticut Department of Motor Vehicles (DMV) suspended indefinitely the plaintiff's operator's license and registration privileges for failure to post a financial responsibility bond, pursuant to Conn.Gen.Stat. § 14-117(b); suspended indefinitely the plaintiff's operator's license for failure to file an accident report, pursuant to Conn.Gen.Stat. § 14-108; and suspended for 30 days the plaintiff's operator's license and motor vehicle registration for failure to provide the mandatory no fault insurance coverage for the operation of her vehicle.

On February 23, 1983, the plaintiff filed a petition seeking relief under Chapter 7 of the Bankruptcy Reform Act of 1978. By letter³ dated March 1, 1983, the plaintiff's attorney, Joanne S. Faulkner of the New Haven Legal Assistance Association, advised the DMV as follows:

On or about March 8, 1982, my client was involved in an automobile accident. Ms. Arminio\'s license and registration privileges were suspended indefinitely for failure to deposit security for damages resulting from the accident. On February 23, 1983, my client filed a petition in bankruptcy in the United States Bankruptcy Court for the District of Connecticut. The claim of Metropolitan Property and Liability Insurance Company was properly listed in Schedule A-3.⁴ I am enclosing copies of the Schedule A-3 for your records. I request that my client\'s license and registration privileges be immediately reinstated and that you notify Shirley Mae Arminio to that effect.

By communication dated March 30, 1983, the defendant's agent acknowledged receipt of the plaintiff's Schedule A-3 and requested Attorney Faulkner to send a "certificate of bankruptcy discharge."⁵ In a subsequent discussion, memorialized by an April 20, 1983 letter⁶, L.D. McCallum, Assistant Attorney General of the State of Connecticut, advised Attorney Faulkner that a copy of the discharge order was not necessary but that a copy of the plaintiff's petition should be sent to the DMV. Attorney McCallum further advised Attorney Faulkner that the plaintiff would also have to satisfy the DMV's no fault insurance regulations and pay a $10.00 fee each for the restoration of the plaintiff's license and motor vehicle registration privileges.

After further discussions and correspondence, during which it was disclosed that the plaintiff had lost her operator's license and no longer wished her motor vehicle registration privileges renewed, Attorney McCallum advised Attorney Faulkner that in order to have her operator's license restored, the plaintiff would have to send the DMV an affidavit detailing the circumstances under which it was lost, a $10.00 restoration fee, and a copy of her bankruptcy petition.⁷ By letter dated June 14, 1983, but not received until July 19, 1983, Attorney Faulkner forwarded the affidavit and a $10.00 fee for restoration of the plaintiff's operator's license.⁸ As of July 19, 1983, the defendant's demand that the plaintiff furnish a copy of her bankruptcy petition was the only unresolved condition for the restoration of the plaintiff's operator's license.

The plaintiff obtained a discharge by the July 12, 1983 order of this Court.⁹ On or about November 7, 1983, the plaintiff's operator's license was restored.

II. DISCUSSION

A. CIVIL CONTEMPT

It is well settled that civil contempt rests upon findings that a specific and definite court order has been violated and that the offending party had knowledge of the court's order. In re Lohnes, 26 B.R. 593, 596 (Bkrtcy.D.Conn.1983), citing Fidelity Mortgage Investor's v. Camelia Builders, Inc., 550 F.2d 47, 51 (2d Cir.1976) (citations omitted) cert. denied, 429 U.S. 1093, 97 S.Ct. 1107, 51 L.Ed.2d 540 (1977).

It is worthy of note that in In re Sampson, 17 B.R. 528, 8 B.C.D. 992 (Bkrtcy.D. Conn.1982), the defendant took the position that although it must refrain from suspending or retaining an operator's license after a debtor's discharge, predischarge enforcement of the State's financial responsibility law was excepted from the automatic stay by Code § 362(b)(4). This Court, however, observed that the intended purpose of the state law was to protect the pecuniary interests of judgment creditors rather than serve a broad public interest and accordingly held that Code § 362(b)(4) was inapplicable. Sampson supra 17 B.R. at 530-531; 8 B.C.D. at 993.

In this proceeding, the defendant contends that the DMV is entitled to a copy of the plaintiff's bankruptcy petition or other proof which satisfies its policy before it may be deemed to have "knowledge of the court's order." The defendant attempts to buttress that argument by claiming that a non-creditor state regulatory agency should have a right to enforce the State's financial responsibility law against bankruptcy debtors who fail or refuse to comply with DMV policy, requiring certain proof that a bankruptcy petition was filed.

While a federal court should exercise caution and restraint when its orders might intrude upon the policies and procedures of state regulatory agencies, an analysis of the evidence in this proceeding, in the context of the intended scope and spirit of the Bankruptcy Code, compels the conclusion that the defendant's position lacks merit.

What is involved here is a policy of the DMV to promote the efficient administration of the State's financial responsibility law. However, as observed in Sampson, supra, that law may not be enforced against a bankruptcy debtor. Accordingly, the defendant's policy, which has the effect of setting state standards for eligibility for relief under the Bankruptcy Code, is in violation of the exclusive power of Congress to enact uniform laws on the subject of bankruptcy. Art. I, § 8, cl. 4 of the United States Constitution.

The defendant may not dictate conditions precedent to a debtor's right to relief under the Bankruptcy Code. A debtor is entitled to that relief and if a "specific and definite" order of a court providing that relief were violated and the defendant had knowledge of that order, appropriate sanctions for civil contempt would be justified. The defendant may not insulate an exposure to contempt sanctions by limiting the definition of notice to his definition of that concept.

Here the plaintiff claims that the defendant violated the automatic stay by refusing to restore her operator's license after she filed a bankruptcy petition which listed, on Schedule A-3, the debt the defendant sought to secure under the State's financial responsibility law. It is apparent from the evidence, however, that prior to July 19, 1983, the defendant was withholding the plaintiff's operator's license for reasons in addition to noncompliance with that law.¹⁰ The additional reasons (supra p. 475) included the plaintiff's failure to file an accident report and were well within the State's police powers. It is therefore unnecessary for this Court to determine whether, prior to July 19, 1983, the defendant violated the automatic stay since it was well within his authority under Code section 362(b)(4)¹¹ to withhold her license.

The debtor obtained a discharge by the Order of this Court on July 12, 1983, and as a consequence, the automatic stay in this Chapter 7 case...