In re Rainwater
| Decision Date | 16 April 1999 |
| Docket Number | Adversary No. 99-40102.,Bankruptcy No. 98-42972-JSS |
| Citation | 233 BR 126 |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
| Parties | In re Jeffrey and Janet RAINWATER, Debtors. Jeffrey and Janet Rainwater, Plaintiffs/Debtors, v. State of Alabama; Fred Thomson, Jr., District Attorney for the 40th Judicial Circuit; Patricia L. Bryant, Alabama Board of Probation & Parole; Michael Haley, Commissioner of State of Alabama Department of Corrections, Defendants. |
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Gilda Williams, Assistant Attorney General, Montgomery, AL, for Alabama.
Jeffrey Willis, Assistant District Attorney, Ashland, AL, for Fred Thompson, Jr.
Andrew W. Redd, Montgomery, AL, for Michael Haley.
Thomas M. Semmes, Anniston, AL, for Debtors.
This matter is before this Court on the complaint and application of Jeffrey and Janet Rainwater, for injunctive relief pursuant to Fed.R.Bankr.P. 7065; a writ of habeas corpus, pursuant to 11 U.S.C. §§ 105(a) and 106(a); and for compensatory damages and punitive damages, pursuant to 11 U.S.C. § 362(h). The plaintiffs are applying for relief on the grounds that the defendants' actions, which culminated in the revocation of Mrs. Rainwater's probation for failure to pay restitution, violated the automatic stay, pursuant to 11 U.S.C. § 362; and that the state criminal trial court judgment revoking her probation, is a legal nullity and void ab initio, pursuant to the application of the automatic stay.
This Court heard expedited hearings for application of a writ of habeas corpus and injunctive relief under Fed.R.Bankr.P. 7065 on February 18, 1999, and March 9, 1999. Based upon the evidence and arguments presented, this Court delivered an oral ruling in open court dismissing the defendant, the Honorable John E. Rochester, which ruling was reduced to an order entered February 23, 1999; and delivered an additional oral ruling in open court issuing a writ of habeas corpus, and returning the debtor to the status she held as of October 28, 1999, which ruling was also reduced to an order entered on March 10, 1999. The defendants filed numerous motions to dismiss on a multitude of grounds. These motions were heard on March 23, 1999 and this Court delivered an oral ruling dismissing without prejudice and by stipulation of the parties, Dr. Colleen Meeks, and Sheriff Ralph Toland, and issued oral findings and conclusions denying the remaining motions to dismiss. Thereafter, a hearing and oral argument was conducted on the issues of the Eleventh Amendment immunity claim, the Rooker-Feldman doctrine, the Younger doctrine, and trial was held on the merits of this adversary proceeding, whether the actions of the defendants violated the automatic stay. This Court declined to deliver an oral ruling of the findings and conclusions, and rather took these matters under advisement. After a review of the testimony, briefs, exhibits, oral arguments, statutory law as well as binding and persuasive case law, and the continuing fact finding through all hearings under Rule 7065, this Court issues and enters this Memorandum Opinion of its findings of fact and conclusions of law.
For the reasons stated herein, and upon the record in open court for those matters adjudicated prior to the final hearing held on March 30, 1999, Mrs. Rainwater's application for writ of habeas corpus has previously been granted and is hereby SUSTAINED. Further, Mrs. Rainwater's request for injunctive relief against these defendants is hereby GRANTED and will remain in effect against these defendants so long as the automatic stay remains in effect. This Court further concludes that the defendants' actions violated the automatic stay by impermissibly attempting to collect, assess, or recover a pre-petition claim without leave of this Court. Further, this Court determines that the debtors are not entitled to recover actual compensatory or punitive damages.
Prior to the initiation of the debtors' Chapter 13 case, Mrs. Rainwater worked for the Clay County Animal Hospital. While working there, Mrs. Rainwater stole over $21,000.00 from the veterinarian, Dr. Colleen Meeks. Mrs. Rainwater was indicted and subsequently pled guilty in State v. Rainwater, CC-98-079, unpub. (40th Cir.Ala.1998), to Theft of Property, First Degree, ALA.CODE § 13A-8-3, a Class B felony. As Mrs. Rainwater had one prior felony conviction, Judge Rochester of the 40th Judicial Circuit of Alabama sentenced Mrs. Rainwater to a term of ten (10) years, due to the application of ALA.CODE § 13A-5-9, Habitual Felony Offenders — Additional Penalties, which requires that upon a conviction of a Class B felony, a habitual offender must be punished as for a Class A felony.
Upon the sentencing of Mrs. Rainwater, the Assistant District Attorney, on behalf of the State of Alabama, remained silent as to the defendant's probation. As a result, Judge Rochester ordered the defendant to serve a sentence of probation and restitution in lieu of incarceration. The probation order stated that the term of probation was until all restitution payments were made, i.e. five (5) years. Mrs. Rainwater was ordered to pay restitution in the amount of $21,145.64, plus court costs of $221.00 and a victim compensation assessment of $50.00, for a total restitution amount of $21,416.64. The Restitution Order set a monthly payment of $425.00 with payments to begin on June 15, 1998.
Patricia Bryan, the Alabama Probation and Parol Officer supervising Mrs. Rainwater's probation, discussed the conditions of probation with Mrs. Rainwater at a meeting held on June 4, 1998. Ms. Bryan told her that she could "slide" for a month on her payments and that it would not affect her probation. Further, Ms. Bryan told her she had to pay the full amount each month. Mrs. Rainwater told Ms. Bryan that she was attempting to borrow the money to pay off the restitution debt.
Mrs. Rainwater failed to pay any restitution at all due to her husband being ill and out of work. Dr. Meeks called Ms. Bryan on two different occasions that summer to inform her that no restitution was being paid by Mrs. Rainwater. Ms. Bryan met with Mrs. Rainwater on August 14, 1998, to discuss with her the lack of payment. Mrs. Rainwater asked Ms. Bryan if she could pay less because her husband had been sick and they had lost income. While she told Mrs. Rainwater that she had to pay something on the restitution, she admitted that she never told Mrs. Rainwater that any payment would prevent her probation from being revoked. Mrs. Rainwater stated that she would make a payment the next day.
On August 27, 1998, Ms. Bryan informed the sentencing court that Mrs. Rainwater, along with other probationers, failed to pay their restitution as ordered. The court directed Ms. Bryan to prepare delinquency reports and place the probationers on the court docket. Ms. Bryan complied with the court, and gave notice to Mrs. Rainwater on September 1, 1998, to appear in the sentencing court regarding her failure to pay restitution as ordered.
On September 18, 1998, the Rainwaters filed a Chapter 13 petition under Title 11. They scheduled the restitution as an unsecured non-priority claim. In their proposed plan, the unsecured non-priority allowed claims were anticipated to receive no distribution over the life of the plan.
Without seeking authorization for relief from the automatic stay, Ms. Bryan, on September 25, 1998, filed the Delinquency Report with the sentencing court, recommending revocation of probation. Contemporaneously, she received notice of Mrs. Rainwater's Chapter 13 proceeding by telephone. Prior to the revocation hearing, the District Attorney's office was also notified that Mrs. Rainwater had filed for protection under the Bankruptcy Code. Mrs. Rainwater appeared at the hearing conducted by Judge Rochester on September 28, 1998, where she received a copy of the Delinquency Report and was adjudged to be delinquent in her restitution payments. Judge Rochester set a probation revocation hearing to be held on October 29, 1998.
Still failing to seek authorization and relief from the automatic stay from this Bankruptcy Court, the State of Alabama proceeded to prosecute the alleged violation of Mrs. Rainwater's probation. Judge Rochester was notified of the pending bankruptcy case. At the October 29, 1998 hearing, the parties stipulated that Mrs. Rainwater failed to make any payment toward restitution. Ms. Bryan testified that she had discussed the terms of probation with Mrs. Rainwater including the restitution payments. As of the morning of the hearing, Mrs. Rainwater had still not paid any amount towards the restitution.
Judge Rochester, after oral argument, stated: "It's the judgment of the Court that you have violated your order of probation, specifically that you have refused since May 15 to make any payment toward restitution." He then imposed the original sentence of ten years upon Mrs. Rainwater and sentenced her to the state penitentiary. This Court finds that the state court revoked Mrs. Rainwater's probation because of the failure to pay her restitution debt.
On a Motion for Reconsideration of the revocation of probation, heard on November 24, 1998, Judge Rochester refused to release Mrs. Rainwater. No state court appeal was taken.
The Rainwaters subsequently filed this adversary proceeding on February 3, 1999. Plaintiffs requested a Temporary Restraining Order without notice to defendants and this request was denied and the Court scheduled an expedited hearing on the motion for preliminary injunction. At the initial expedited hearing, the plaintiff-debtor,...
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