In re Atkins
| Citation | 176 BR 998 |
| Decision Date | 04 November 1994 |
| Docket Number | Bankruptcy No. 3-93-5344. Adv. No. 3-94-045. |
| Parties | In re Paul J. ATKINS and Julie J. Atkins, Debtors. Paul ATKINS, Plaintiff, v. Juan MARTINEZ and Weinblatt and Davis, Defendants. |
| Court | United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — District of Minnesota |
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Joseph W. Dicker, Keenan & Katkov, Minneapolis, MN, for plaintiff.
Juan J. Martinez, Weinblatt & Associates, St. Paul, MN, for defendants.
MEMORANDUM TO ORDER OF SEPTEMBER 30, 1994
On September 30, 1994, the Court entered an order denying the Defendants' motion for summary judgment, and granting the Plaintiff's motion for partial summary judgment. Pursuant to FED.R.CIV.P. 52(a), as incorporated by FED.R.BANKR.P. 7052, this memorandum sets forth the findings of fact and conclusions of law on which that order was based.
The Debtor filed a voluntary petition for relief under Chapter 7 on December 11, 1993. Prior to the Debtor's bankruptcy filing, Dr. and Mrs. John Marta had obtained a money judgment against him in the Minnesota State District Court for the Second Judicial District, Ramsey County. Defendant Weinblatt and Davis, a St. Paul law firm, represented the Martas in that lawsuit. Defendant Martinez, an attorney employed by that firm, was the Martas' main counsel of record.
Through this adversary proceeding, the Debtor seeks an adjudication that the Defendants willfully violated the automatic stay of 11 U.S.C. § 362(a) and the discharge injunction of 11 U.S.C. § 524(a), as a result of events that occurred during post-judgment collection in the lawsuit: under color of a bench warrant that had been issued at the Martas' instance and on a motion presented by the Defendants, the Ramsey County Sheriff arrested the Debtor and held him in jail overnight, after the debt evidenced by the Martas' judgment had been discharged in bankruptcy. As relief, the Debtor seeks an award of damages against the Defendants.
In their answer, the Defendants deny various fact allegations of the Debtor's complaint. The gist of their pleaded defense is that they owed no duty to the Debtor in connection with the pendency of the bench warrant, even after his bankruptcy filing, and therefore could not be adjudged to have violated the automatic stay and discharge injunction.
Both parties have moved for summary judgment pursuant to FED.R.BANKR.P. 7056.1 The Debtor seeks partial summary judgment, on the issue of the Defendants' liability alone. He acknowledges that the amount of a damage award, if he is entitled to one, must be proved up at trial.
In response, the Defendants move for summary judgment in their favor on the same issue. Since a grant of their motion would obviate the need for a determination of damages, the Defendants' motion is properly characterized as one for full summary judgment.
While the parties do not submit their motions on a stipulation of fact, both counsel state that they believe there is no genuine issue of material fact on the question presented. Such a mutual acknowledgement is not binding on the Court, but this one ends up being correct: in their entirety, the affidavits submitted for the respective motions, plus the concessions and acknowledgements made by counsel at the hearing, show that there is indeed no triable fact question going to the issue of liability. This issue, then, is properly before the Court for decision on a summary basis. W.S.A., Inc. v. Liberty Mut. Ins. Co., 7 F.3d 788, 790 (8th Cir.1993); Coca-Cola Bottling Co. v. Teamsters Local Union No. 688, 959 F.2d 1438, 1440 (8th Cir.1992); In re Sunde, 149 B.R. 552, 554 (Bankr.D.Minn.1992); In re Ramy Seed Co., 57 B.R. 425, 430 (Bankr.D.Minn.1985).
As they emerge from the record, the uncontroverted facts2 are as follows:
1. Before his bankruptcy filing, the Debtor was engaged in the sale and installation of tile and other flooring products through his business corporation, Spectrum Tile and Marble, Inc., ("Spectrum").
2. At some time in 1991 or before, the Martas contracted with the Debtor and/or Spectrum, for the purchase and installation of custom tile at their residence.
3. As a result of a dispute arising out of the Debtor's performance under the contract, he and Spectrum sued the Martas in the Ramsey County District Court. Apparently, he sought to recover the sum of money he alleged that he and/or Spectrum was owed under the contract.
4. In November, 1991, the Martas retained the Defendants to represent them in this lawsuit.3 The Defendants interposed an answer and counterclaim on behalf of their clients.
5. The Debtor did not serve or file any pleading responsive to the counterclaim. The Defendants made a motion for a default judgment on their clients' counterclaim.
6. The Ramsey County District Court granted the motion; on November 29, 1992, it entered judgment against the Defendant4 in the sum of $6,342.39.
7. Approximately two months later, Martinez commenced post-judgment discovery proceedings against the Debtor, as a part of the process to collect on the Martas' judgment. On September 23, 1992, he served the Debtor by mail with interrogatories and a notice of the taking of the Debtor's deposition, both in aid of execution on the judgment.
8. The Debtor never responded to the interrogatories in any way. He failed to appear at the noted deposition.
9. On October 29, 1992, Martinez brought on a motion to compel the Debtor to respond to the discovery. The Debtor failed to appear at the hearing on the motion.
10. By an order entered December 9, 1992, the Ramsey County District Court ordered the Debtor to appear for deposition at the offices of Weinblatt and Davis on December 16, 1992, and to answer the interrogatories by the same date.
11. The Debtor did not respond in any way to the order compelling discovery.
12. On January 25, 1993, Martinez brought a motion pursuant to MINN.STAT. § 588.01, for an order adjudging the Debtor in contempt of court for his refusal or failure to comply with the order compelling discovery.
13. The Defendant failed to appear at the hearing on the contempt motion. On February 22, 1993, the Ramsey County District Court entered an order finding him in contempt of court, and requiring the issuance of a warrant for his arrest.
14. The Debtor was aware of the issuance of this order.
15. The bench warrant was not executed before October 12, 1993.5 On that date, the Debtor filed his Chapter 7 petition.
16. On the Debtor's Schedule F, Martinez was duly noted as counsel for the Martas. He received a copy of the clerk's notice of the commencement of the Debtor's bankruptcy case in due course.
17. Upon receiving the notice, Martinez placed it in his file. He does not deny that he understood the meaning of the notice. He did not review his file at that time, and he did not remember that the bench warrant was still outstanding.
18. The Martas did not timely commence an adversary proceeding to have the Debtor's debt to them found nondischargeable under 11 U.S.C. § 523(c).
19. By an order entered on February 8, 1994, the Debtor received a discharge under Chapter 7.
20. The warrant remained unexecuted until February 23,6 1994. On that date, a deputy from the Ramsey County Sheriff's Department appeared at the Debtor's residence, meeting him as he drove up. She issued him a citation for driving without a license,7 and then arrested him under color of the bench warrant issued on the Martas' motion. She explained that she was taking him into custody in connection with a civil matter.
21. After taking the Debtor into custody, the deputy sheriff brought him to the Adult Detention Center of Ramsey County.
22. On February 24, 1994, Martinez received a telephone message from an employee of Ramsey County,8 advising him that the Debtor was in custody. This employee advised Martinez that if he wished the Debtor to be released he should call the Ramsey County Sheriff.
23. Martinez then called the Sheriff, advising him that the Debtor had filed for bankruptcy and had received a discharge of the debt in question. The Sheriff advised Martinez that he could not release the Debtor unless the order for his arrest were quashed.
24. Martinez then called the law firm with which the Debtor's bankruptcy counsel was associated. He advised Steven Katkov, one of the attorneys in the firm, that the Debtor was in custody.9 Apparently, Martinez did so to suggest that the Debtor's counsel undertake to have the order quashed. Katkov suggested to him that was Martinez's burden, as Martinez had obtained the order and the issuance of the warrant.
25. Martinez then immediately contacted the clerk of Ramsey County District Court, requested that the order be quashed, and transmitted copies of the initial notice and the discharge order in the Debtor's case to the clerk via telefacsimile. He also contacted the deputy clerk assigned to the judge who had signed the order, and advised that these materials were forthcoming.
26. The clerk of Ramsey County District Court apparently then presented the materials to a judge, who issued an appropriate order.
27. The sheriff then released the Debtor from the Adult Detention Center, some time during the afternoon of February 24.
Once the Debtor filed for bankruptcy relief, he immediately gained the protection of the provision of the Bankruptcy Code that creates the automatic stay, 11 U.S.C. § 362(a).10 The automatic stay in bankruptcy comes into existence as a matter of law; it is self-effectuating. Maritime Electric Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1204 (3d Cir.1991); I.C.C. v. Holmes Transp., Inc., 931 F.2d 984, 987 (1st Cir.1991); In re Markey, 144 B.R. 738, 744 (Bankr.W.D.Mich. 1992); In re Scharff, 143 B.R. 541, 542 (Bankr.S.D.Iowa 1992). The automatic stay is one of the fundamental debtor remedies under the Bankruptcy...
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