In re Roussin, Bankruptcy No. 85-59
| Decision Date | 25 August 1988 |
| Docket Number | Adv. No. 88-16.,Bankruptcy No. 85-59 |
| Parties | In re Herman O. ROUSSIN, Debtor. Herman O. ROUSSIN, Plaintiff, v. Michael JOHNSON, Esquire, Merrimack County Attorney, Defendant. |
| Court | United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of New Hampshire |
Howard A. Helrich, Asst. Merrimack Co. Atty., Concord, N.H., for defendant.
Paul A. Rinden, Concord, N.H., for plaintiff.
This chapter 7 case is presently before the court upon the plaintiff's Complaint for Injunction, which requests that the defendant, Michael Johnson, Esquire, the Merrimack County Attorney for the State of New Hampshire, be permanently enjoined from prosecuting the plaintiff on a citation for criminal contempt. The defendant has filed an Answer, and both parties have filed trial memoranda.
The issue in this adversary proceeding is whether the state proceeding is a legitimate criminal contempt proceeding to protect the state court's authority and vindicate its dignity, or whether it is a disguised effort to collect a discharged debt. The plaintiff, a discharged debtor, contends that the state proceeding is based on the plaintiff's failure to comply with a state court order mandating that a discharged debt be paid, which the plaintiff contends is in violation of 11 U.S.C. § 524 and 11 U.S.C. § 525(a). The defendant, a county prosecutor, responds that the state proceeding is not an attempt to collect a discharged debt, rather it is a prosecution for criminal contempt based upon the plaintiff's willful disregard of a prior state court order. The defendant maintains that the state is prosecuting for a punitive remedy, in order to vindicate the dignity of the state court.
In 1983 Constance Bailey obtained a judgment in the Merrimack County Superior Court for $1,885.00 against Herman O. Roussin. Roussin did not pay the judgment, and Bailey was unable to effect collection by writ of execution. Roussin failed to appear at a subsequent hearing on Bailey's Motion for Periodic Payments. Bailey next filed a Petition For Contempt and notices were served in hand to the defendant and his attorney.
On February 5, 1985, Bailey's Petition For Contempt came on for hearing in the Merrimack County Superior Court before the Honorable Joseph A. DiClerico, Jr. Judge DiClerico found the plaintiff, Herman O. Roussin, to be liable for judgment, interest, and costs in the underlying civil action in the amount of $2,632.18, pursuant to RSA 524:6-a (Supp.1986). Roussin was ordered to "take immediate steps to sell his Honda motorcycle and upon the sale of the same to pay over the net proceeds to Bailey's attorney to be applied against Roussin's obligation." Notice of Judge DiClerico's decision was mailed to Roussin on February 6, 1985, the day after the hearing on the Petition For Contempt. However, subsequent to the hearing on February 5, 1985 and prior to receipt of Judge DiClerico's Order on February 6, 1985, Roussin sold his Honda motorcycle for $900: Roussin gave $500 to his attorney for purposes of initiating bankruptcy proceedings and retained $400 for himself for living expenses. On February 12, 1985, Roussin filed a petition under chapter 7 of the Bankruptcy Code.
In May of 1985, Bailey filed a Motion to Hold Defendant in Contempt for Roussin's alleged failure to comply with the February 5, 1985 court order. Roussin filed an Answer and Objection to Bailey's Motion to Hold Defendant in Contempt and a Cross Motion asserting that Bailey's motion violated the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362, and that it essentially sought to recover an improper preference contrary to 11 U.S.C. § 547. In September, 1986, Roussin filed a second Answer to Bailey's Motion for Contempt asserting that Bailey, under 11 U.S.C. § 524, could not proceed against Roussin because the underlying judgment debt had been eliminated by the bankruptcy court's granting of a discharge in July, 1985.1
The discharge order was actually entered by this court on January 29, 1987. The Notice Of Discharge was sent to all creditors on February 4, 1987, and the bankruptcy case was closed on February 5, 1987. On April 17, 1987, the Merrimack County Superior Court denied Bailey's Motion to Hold Defendant in Contempt as an attempt to collect a pre-petition debt precluded by the bankruptcy filing. However, the state court ordered Roussin "to appear and show cause why he should not be held in criminal contempt for failing to comply with the Court order of February 5, 1985 . . . when he had the ability to do so." Citation For Criminal Contempt, No. 82-C-148, slip op. at 6 (Merrimack County Superior Court, New Hampshire, April 17, 1987) (DiClerico, J.).
On December 30, 1987, Roussin filed a petition to reopen this bankruptcy case, which this court granted on January 5, 1988, but "only to extent that this bankruptcy case is hereby reopened; any request for injunctive relief must be upon appropriate adversary complaint and motion." Later that same day, Roussin filed a Complaint requesting that Michael Johnson, Esquire, Merrimack County Prosecutor, be temporarily enjoined from prosecuting Roussin on the criminal contempt charges. Telephonic notice was given and the Complaint was considered at an expedited hearing in the afternoon of January 5, 1988.
After receiving evidence and hearing arguments, the court denied the request for a temporary restraining order "except to the extent that the defendant, Constance Bailey Norman, and her agents, are hereby restrained from moving for, or receiving, any payment directly or indirectly of their debt owing from the debtor, Herman O. Roussin, which was discharged in these bankruptcy proceedings by virtue of this Court's Order of Discharge entered January 29, 1987." See Herman O. Roussin v. Constance Bailey Norman and Michael Johnson, Esquire, ADV # 88-1.
Subsequently, on March 11, 1988, Roussin filed the complaint in this adversary proceeding, ADV # 88-16, requesting that Johnson be permanently enjoined from prosecuting Roussin on the criminal contempt charges. A trial was held on May 10, 1988.
Roussin's position is that there is no basis for the state court criminal contempt proceeding, and therefore the proceeding is not an attempt to vindicate the state court's dignity. Roussin avers that, pursuant to N.H. RSA 524:6-a, if a person does not pay a judgment then the state court has the authority to order time payments of such judgment, and that failure to make those time payments constitutes civil contempt. Roussin maintains that there was no violation of RSA ch. 524, because the state court never ordered Roussin to make time payments.
Plaintiff cites Sheedy v. Merrimack County Superior Court, 128 N.H. 51, 509 A.2d 144 (1986) for the principle that when no specific time payments are ordered, a person cannot be prosecuted for contempt for failure to make said payments. The plaintiff further cites Sheedy v. Merrimack County Superior Court for the principle that a person is only required to pay amounts that he can afford, and the person is permitted to keep enough money to pay for daily living expenses. Roussin maintains that the $900 he received from the sale of his motorcycle was only enough money for instituting the bankruptcy proceeding, and for paying his daily living expenses. In summary, Roussin contends that he was not in contempt because he was never ordered to make time payments and, alternatively, even if he was ordered to make time payments he was not in contempt because he did not have sufficient funds to both make the time payments and pay his daily living expenses.
Defendant contends that the state court does have a basis for the criminal contempt proceeding, namely that Roussin insulted the state court's dignity by knowingly failing to comply with the state court's order when he allegedly had the ability to do so. The defendant states that the criminal proceeding is based upon the state court's common law authority to vindicate the court's dignity, and the prosecution is accordingly a "true criminal proceeding." Therefore, the defendant maintains that, pursuant to the principles of federalism set forth in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971) and progeny, this court has no jurisdiction to enjoin the state criminal action initiated against Roussin.
Defendant acknowledges Roussin's right to file for bankruptcy, and insists that the criminal proceeding is not motivated by a desire to punish Roussin for circumventing the state court's order vis-a-vis bankruptcy. Defendant, the state prosecutor who was directed to institute the criminal contempt proceeding, stated that he has never met Bailey or had any contact with her in regard to initiating the criminal proceeding. Judge DiClerico, the state court judge whose order was disobeyed, has recused himself from any proceedings regarding the charge of criminal contempt. The defendant asserts that the criminal contempt proceeding is punitive in its nature and is for the purpose of vindicating the dignity of the court, rather than being remedial in nature for the purpose of benefiting a creditor:
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