Matter of Dennis, Bankruptcy No. 81-50411.

• Decision Date: 26 January 1982
• Docket Number: Bankruptcy No. 81-50411.
• Citation: 17 BR 558
• Parties: In the Matter of Augustus L. DENNIS, Debtor. Augustus L. DENNIS, Plaintiff, v. PENTAGON FEDERAL CREDIT UNION, Defendant.
• Court: U.S. Bankruptcy Court — Middle District of Georgia

17 B.R. 558 (1982)

In the Matter of Augustus L. DENNIS, Debtor Augustus L. DENNIS, Plaintiff, v. PENTAGON FEDERAL CREDIT UNION, Defendant.

Bankruptcy No. 81-50411.

United States Bankruptcy Court, M.D. Georgia, Macon Division.

January 26, 1982.

Hulane E. George, George & Jones, Milledgeville, Ga., for Augustus L. Dennis.

Frederick M. Scherma, Atlanta, Ga., for Pentagon Federal Credit Union.

MEMORANDUM DECISION ON MOTION FOR CONTEMPT

ROBERT F. HERSHNER, Jr., Bankruptcy Judge.

STATEMENT OF THE CASE

Before the Court is the motion of Augustus L. Dennis, Plaintiff, seeking to have Pentagon Federal Credit Union, Defendant, adjudged in contempt of court due to certain alleged violations of the automatic stay of the Bankruptcy Code, 11 U.S.C.A. § 362 (West 1979). The Motion for Contempt was filed on June 22, 1981, and the matter came on for hearing on August 28, 1981. After consideration of the evidence, the Court has this day entered an order finding the Defendant not to be in contempt of court.

In support of its order, the Court attaches the following findings of fact and conclusions of law.

FINDINGS OF FACT

The facts in this case are not in dispute and have been stipulated by counsel.

The Defendant is a judgment creditor of the Plaintiff, and prior to the Plaintiff's filing in bankruptcy had completed one garnishment proceeding against the Plaintiff. This garnishment proceeding is not at issue in the Plaintiff's Motion for Contempt.

The Plaintiff filed his petition in bankruptcy on April 15, 1981. On April 30, 1981, the Defendant's attorney, without being aware of the Plaintiff's filing in bankruptcy, mailed another garnishment proceeding to the Superior Court of Putnam County, and the Clerk of that Court, after processing the garnishment proceeding, issued a summons of garnishment on May 4, 1981. This summons of garnishment was served on the Plaintiff's employer, the Georgia Power Company, on May 5, 1981, and the employer then withheld from the Plaintiff's pay those sums which under Georgia law it was required to withhold. The Plaintiff's employer filed an answer to this garnishment proceeding on June 31, 1981, and therewith tendered to the Clerk of the Superior Court of Putnam County the sum of $366.87. The actual sum withheld from the Plaintiff's pay by his employer was $407.63, but from that sum, the employer deducted $40.76, representing its expenses in the garnishment proceeding, which deduction it is permitted to make by Georgia law. This entire garnishment proceeding took place after the Plaintiff's filing in bankruptcy and while the automatic stay of the Bankruptcy Code was in effect.

While the record is not clear as to when the Defendant's counsel was notified about the Plaintiff's filing in bankruptcy, it is uncontested that he was notified during the pendency of the garnishment proceeding. The Defendant's attorney states that he called the Clerk of the Superior Court of Putnam County and the Plaintiff's employer to advise them that the garnishment proceeding should be released. He states that he took no other affirmative action, such as a written dismissal of the garnishment proceeding, because he viewed that the additional action would be, in his opinion, a violation of the automatic stay of the Bankruptcy Code.

The Plaintiff's attorney contends that the Defendant's attorney was under an affirmative obligation to dismiss the garnishment proceeding upon being notified of the filing in bankruptcy, and urges this Court to find the Defendant in contempt on account of its attorney's failure to dismiss the garnishment proceeding.

CONCLUSIONS OF LAW AND DISCUSSION

The questions thus presented are whether there was an affirmative duty to dismiss the garnishment proceeding upon being notified of the bankruptcy filing, and if there was such a duty, whether the Defendant should be punished for contempt for failure of its attorney to comply with this affirmative duty.

Section 362 of the Bankruptcy Code contains what is termed the automatic stay of bankruptcy and provides as follows:

(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of —

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;

(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;

(3) any act to obtain possession of property of the estate or of property from the estate;

(4) any act to create, perfect, or enforce any lien against property of the estate;

(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;

(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;

(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and

(8) the commencement or continuation of a proceeding before the United States Tax Court concerning the debtor.

11 U.S.C.A. § 362(a) (West 1979) (emphasis added).

From the provisions of Section 362, which ...