Ragone v. Pizza Pan Elyria, LLC (In re Ragone)
| Decision Date | 31 March 2020 |
| Docket Number | Adv. Pro. No. 18-03070,Case No. 13-51335 |
| Parties | In Re: Frank R. Ragone, Jr., Debtor. Frank R. Ragone, Jr., Plaintiff, v. Pizza Pan Elyria, LLC, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
The court incorporates by reference in this paragraph and adopts as the findings and analysis of this court the document set forth below. This document has been entered electronically in the record of the United States Bankruptcy Court for the Northern District of Ohio.
MEMORANDUM OF DECISION AND ORDER
This Adversary Proceeding came before the court for trial on Plaintiff-Debtor Frank Ragone, Jr.'s Complaint [Adv. Doc. #1], which alleges that Defendants Stefanick & Christie, LLC and John R. Christie1 ("Defendants") pursued collection of a debt in violation of both theautomatic stay and the discharge injunction
The above captioned Adversary Proceeding was transferred to this court on September 20, 2018 [Adv. Doc. #12], and the case number was changed from 18-05009-amk to 18-03070-jpg. The court has jurisdiction over this proceeding pursuant to 28 U.S.C. §§1334, 157(a), and General Order 2012-7 of the United States District Court for the Northern District of Ohio. Actions to determine whether violations of the automatic stay and/or the discharge injunction have occurred are core proceedings that this Court may hear and determine. 28 U.S.C. §157(b)(1) and (b)(2)(A), (b)(2)(O).
This Memorandum of Decision constitutes the court's findings of fact and conclusions of law pursuant to Fed R. Civ. P. 52, made applicable to this adversary proceeding by Fed. R. Bankr. P. 7052. Regardless of whether specifically referred to in this Memorandum of Decision, the court has examined all the submitted materials, weighed the credibility of witnesses, considered all of the admitted evidence, and reviewed the entire record in the case.
Because Plaintiff-Debtor has met his burden of showing that there was and is no fair ground of doubt that Defendants' conduct violated the discharge injunction, the court finds that Defendants acted in civil contempt when they continued to collect on a discharged debt and failed to turnover funds that had been garnished based on a void judgment. Accordingly, the court will sanction Defendants by awarding Plaintiff-Debtor $4,275.39 in actual damages and $10,580.00 in attorney fees incurred by Plaintiff-Debtor in relation to bringing this suit and otherwise defending against Defendants' actions.
Many of the undisputed facts underlying this case were previously set forth in the court's prior Memorandum of Decision and Order that denied Defendant's Motion for Summary Judgment. [Adv. Doc. #32]. The court incorporates those facts by reference [Id., pp. 2-10], and makes the following findings of fact from the trial that was held on August 12, 2019.
At the August 12th trial, counsel for Plaintiff-Debtor and Defendant John R. Christie appeared in person, with the latter opting to represent both himself and Defendant Stefanick & Christie, LLC. After opening statements were given, Plaintiff-Debtor called his first witness, Mr.Robert Wentz ("Mr. Wentz"), a Cleveland-area attorney whom Plaintiff-Debtor had engaged regarding Defendants' garnishments of Plaintiff-Debtor's wages. Mr. Wentz testified that, at Plaintiff-Debtor's behest, he contacted Defendant by telephone at the end of March 2016 and requested that the garnishments be stopped in light of the discharge that had been entered in Plaintiff-Debtor's Chapter 7 case. According to Mr. Wentz, Defendant did not agree to end the garnishments after that phone call. Subsequently, Mr. Wentz drafted an Emergency Motion ("Emergency Motion") to end the garnishments, filed it with the Cleveland Municipal Court, and sent Defendant a letter dated April 8, 2016 notifying him of the motion. [Ex. 10]. Mr. Wentz testified that, after several months of litigation in the state court, the garnishments were terminated despite Defendant's continued opposition. Per Mr. Wentz' testimony, Plaintiff-Debtor paid him a total of $500.00 for his initial efforts to stop the garnishment and his filing the Emergency Motion.
On cross-examination, Mr. Wentz stated that he was first contacted by Plaintiff-Debtor in late February or early March of 2016. Mr. Wentz also stated that he did not keep time records regarding his work on Plaintiff-Debtor's garnishment issue because he was not billing hourly for that work. Mr. Wentz admitted that, per the Cleveland Municipal Court docket ("State Court Docket") [Ex. 7] for Plaintiff-Debtor's garnishment case, Case No. 2013 CVH 007053, Defendants did not receive any monies garnished from Plaintiff-Debtor's wages after Mr. Wentz first contacted Defendant in late March of 2016.
On re-direct, Mr. Wentz identified numerous entries on the State Court Docket [Ex. 5, pp.12-15] that showed that Plaintiff-Debtor's wages continued to be garnished after Mr. Wentz first contacted Defendant in late March of 2016.
After Mr. Wentz was excused, Plaintiff-Debtor took the stand. Plaintiff-Debtor testified that he started working in sales for Mars Electric in January of 2011. Plaintiff-Debtor stated that he has joint custody of two dependents and that about $380.00 comes out of each paycheck in child support.
Though unsure of the specific date, Plaintiff-Debtor testified that, in either 2010 or 2011, he entered into an agreement with a Mr. Jeffrey Borling ("Mr. Borling") and Mr. Borling's limited liability company, Pizza Pan Elyria, LLC, to purchase a pizza restaurant located in Elyria. Plaintiff-Debtor explained that, after reviewing the location's financial history, he intended to ownand operate the restaurant at a profit. After operating the restaurant for around six months, Plaintiff-Debtor sold it and its assets because the venture was not profitable. Proceeds from those sales were turned over to Mr. Borling/Pizza Pan, LLC and the landlord who owned the storefront property leased by Plaintiff-Debtor.
Plaintiff-Debtor was then successfully sued by Mr. Borling and Pizza Pan, LLC for contractual damages which had not been paid from the proceeds of the sale of the Elyria pizza restaurant's assets. After Mr. Borling obtained a judgment against Plaintiff-Debtor ("Pizza Pan Judgment"), Plaintiff-Debtor filed for Chapter 7 bankruptcy on May 8, 2013. [Case No. 13-51335, Doc. #1]. Plaintiff-Debtor explained that he filed for Chapter 7 because he could not afford to make payments on the Pizza Pan judgment, nor could he afford to pay his other debts and expenses. While reviewing Exhibits 5 and 9, Plaintiff-Debtor testified that his wages were garnished starting on July 24, 2014 and ending on Jul 20, 2016. Plaintiff-Debtor further testified that the garnishments caused him a great deal of hardship and emotional distress. He also stated that the garnishments caused him to struggle to provide for his two children.
To attempt to make ends meet while his wages were garnished, Plaintiff-Debtor testified that he withdrew approximately $6,000.00 from his 401(k). While his Chapter 7 case was pending, Plaintiff-Debtor contacted his bankruptcy attorney, Rebecca Clark ("Ms. Clark"), whom he believed would contact Defendant to inquire about ending the garnishments. The garnishments continued, and according to Plaintiff-Debtor, Ms. Clark quoted him legal fees in the amount $1,500.00 as the cost of her pursuing the garnishment issue further.
Because Plaintiff-Debtor could not afford the additional $1,500.00 in legal fees requested by Ms. Clark, Plaintiff-Debtor eventually contacted Mr. Wentz and asked that he investigate the propriety of the ongoing garnishments. However, Mr. Wentz was unable to stop the garnishments, and Mr. Wentz then recommended that Plaintiff-Debtor consult with his current attorney, Mark Knevel, given Mr. Knevel's bankruptcy experience.
Plaintiff-Debtor eventually received back $1,832.31 in monies garnished from his wages that had been held over by the state court upon Mr. Wentz' filing of the Emergency Motion. Plaintiff-Debtor has not received back the remaining $9,161.55 in garnished wages.
On cross-examination, Plaintiff-Debtor testified that he contacted Ms. Clark numeroustimes after he received his Chapter 7 discharge2 to attempt to get the garnishments stopped. Plaintiff-Debtor stated that he stopped attempting to contact Ms. Clark after he had contacted Mr. Wentz, though he was unsure of the exact date. Plaintiff-Debtor admitted that he had never contacted Defendant or Defendant Firm, but stated that Ms. Clark represented that she had contacted Defendant regarding the garnishments.
When asked why he took no further actions to stop the garnishments between June of 2015 and April of 2016, Plaintiff-Debtor stated that he had no money to hire another attorney to pursue the garnishment further. Plaintiff-Debtor stated that, because Mr. Wentz investigated the garnishment issue before charging him the $500.00 to file the Emergency Motion, Mr. Wentz could have begun his investigation at any time between June of 2015 and April of 2016. Though unsure, Plaintiff-Debtor testified that he first contacted Mr. Wentz sometime in February of 2016 after learning of him through his girlfriend. Plaintiff-Debtor admitted that he did not know whether Mr. Anthony Calabrese ("Mr. Calabrese"), the Calabrese Law Firm, Mr. Borling, or the Pizza Pan company itself received any of the monies garnished from his wages. However, Plaintiff-Debtor testified that he believed Defendant Firm had received some of the garnishments because the garnishment docket [Ex. 9] included numerous entries under the "Stefanick & Christie LLC" name.
On redirect, Plaintiff-Debtor identified Exhibit 11 as the contract for legal services he entered into with Mr. Knevel in June of 2016. Plaintiff-Debtor also explained that he obtained Mr. Knevel's services in order to respond to the Motion to Reopen that had been filed by Defenda...
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