Vahlsing v. Commercial Union Ins. Co., Inc.

• Decision Date: 22 March 1991
• Docket Number: No. 90-1624,90-1624
• Citation: 928 F.2d 486
• Parties: , 21 Bankr.Ct.Dec. 796, Bankr. L. Rep. P 73,872 Frederick Henry VAHLSING, Jr., Plaintiff, Appellant, v. COMMERCIAL UNION INSURANCE CO., INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 486

928 F.2d 486

59 USLW 2647, 21 Bankr.Ct.Dec. 796, Bankr.

L. Rep. P 73,872

Frederick Henry VAHLSING, Jr., Plaintiff, Appellant, v. COMMERCIAL UNION INSURANCE CO., INC., Defendant, Appellee.

No. 90-1624.

United States Court of Appeals, First Circuit.

Submitted Nov. 21, 1990.

Decided March 22, 1991.

Frederick Henry Vahlsing, Jr., on brief pro se.

Cynthia J. Cohen, Warren F. Fitzgerald and Meehan, Boyle & Cohen, P.C., Boston, Mass., on Motion for Summary Disposition, for defendant, appellee.

Before BREYER, Chief Judge, CAMPBELL and SELYA, Circuit Judges.

SELYA, Circuit Judge.

The appellant, Frederick Henry Vahlsing, guaranteed a contract on which the appellee, Commercial Union Insurance Company, had bound itself as surety. The contractor defaulted, and Commercial Union instituted litigation in the state courts of Texas to exonerate itself as surety and to collect on Vahlsing's guarantee. Commercial Union's lawyers obtained a substantial judgment and, after efforts to obtain payment were unavailing, began post-judgment garnishment proceedings, again in a Texas state court.

Vahlsing proved to be an evasive target. For almost two years, Commercial Union's lawyers tried unsuccessfully to serve Vahlsing with discovery requests. Eventually, Commercial Union sought and received the court's permission to make "substituted service" of the discovery requests on any adult who could be found at Vahlsing's place of residence. Using this procedure, Commercial Union attempted to serve Vahlsing in March 1982 with post-judgment interrogatories and a notice of deposition, but the persons served either refused to take or returned the documents.

Soon afterward, on March 29, 1982, Vahlsing filed for bankruptcy in the United States Bankruptcy Court for the Southern District of Texas. Vahlsing identified Commercial Union as one of his creditors. Under normal circumstances, the court would have provided Commercial Union with notice of the petition, thus notifying it of the automatic stay which comes into effect upon the filing of a bankruptcy petition. 11 U.S.C. Sec. 362(a). Commercial Union contends that it never received such notice; at trial, it introduced evidence in the form of mail logs to support that contention.

In any event, Commercial Union went ahead with its efforts to collect on the judgment. It filed a motion for contempt, which the Texas court allowed after Vahlsing failed to respond to a show cause order. The Texas court issued a judgment of contempt, and sentenced Vahlsing to 180 days in jail.

Vahlsing was arrested on August 9, 1982 in his home town of McAllen, Texas, and incarcerated at the Hidalgo County Jail. That evening, Steven Mock--Commercial Union's lawyer--met with Vahlsing at the jail. Vahlsing claims that Mock demanded payment of the outstanding judgment, and threatened to let Vahlsing "stay there and rot" if he did not pay. Mock denies this charge. Both parties agree, however, that Vahlsing informed Mock of the petition in bankruptcy.

Mock, attending to other business, did not confirm the fact of the petition until August 11. Vahlsing's lawyer asked Mock to seek rescission of the contempt order, but Mock declined. Vahlsing's lawyer then filed a motion to rescind, which the 151st District Court of Harris County, Texas heard on August 13. Mock attended the hearing and, while he did not strenuously oppose the motion, neither did he urge Vahlsing's release. The District Court denied the motion, apparently on the ground that Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), had ruled that Congress' grant of jurisdiction to the bankruptcy courts was unconstitutional. Vahlsing remained in jail.

Vahlsing then wrote a letter to the bankruptcy court, which the court construed as an application for a writ of habeas corpus. The bankruptcy court ordered that Vahlsing be released on bail. Vahlsing was released on August 20, 1982, having spent eleven days in jail. On September 28, 1982 the bankruptcy court held a hearing on the application for a writ of habeas corpus. Mock again appeared. Again, he did not oppose the application in so many words, but he did take the position that as long as Commercial Union was ignorant of the petition, the stay was not automatic. The bankruptcy court rejected this position, found that Vahlsing's commitment "was void by reason of the filing of the petition in bankruptcy", and ordered Vahlsing's release from bail.

In 1983 Vahlsing brought suit in the United States District Court for the District of Massachusetts (where Commercial Union had its home office). Vahlsing claimed entitlement to recovery on common law theories of negligence, abuse of process, false imprisonment and intentional infliction of emotional distress, and under 42 U.S.C. Sec. 1983. At trial, after Vahlsing had presented his case, the district court granted Commercial Union a directed verdict on the abuse of process claim. The jury returned a verdict in favor of Commercial Union on the remaining counts. This appeal followed.

Vahlsing's pro se appellate briefs are marked by a persistent misapprehension of the effect of the bankruptcy court proceedings on the case at hand. Vahlsing seems to believe that Commercial Union's liability was conclusively litigated after the bankruptcy court ruled that the arrest was void by virtue of the automatic stay. But there is a difference between the effect of actions taken in violation of the stay, and the culpability of the actors who take such acts. The actions may be void ab initio, see In re Advent Corp., 24 B.R. 612, 614 (Bankr.App. 1st Cir.1982), but see Sikes v. Global Marine, Inc., 881 F.2d 176, 179 (5th Cir.1989) (acts violating stay are voidable rather than void), but the actor's culpability is a question to be settled by reference to some extrinsic legal standard, whether it is the "willfulness" requirement of 11 U.S.C. Sec. 362(h), or the various common-law and statutory theories under which Vahlsing chose to bring suit. ¹

Violation of the stay, in other words, is not a strict liability tort. Recovery under one or more of the legal theories advanced by Vahlsing requires proof that Commercial Union violated the stay under circumstances which satisfy the elements of the theory in question. We therefore turn to the alleged bases of liability.

Abuse of Process

In order to uphold the grant of a directed verdict, we must find that, viewing the evidence in the light most favorable to Vahlsing, reasonable jurors could have come to but one conclusion. Goldstein v. Kelleher, 728 F.2d 32, 39 (1st Cir.1984). We must give Vahlsing the benefit of every legitimate inference, but we are not required to indulge in conjecture or speculation, id., nor must we neglect uncontradicted evidence introduced by Commercial Union. Carlson v. American Safety Equipment Corp., 528 F.2d 384, 385 (1st Cir.1976).

Under Texas law (which governed the common-law claims in this case), abuse of process has three elements: (1) that the defendant made an illegal, improper or perverted use of the process, a use neither warranted nor authorized by the process; (2) that the defendant had an ulterior motive or purpose in exercising such illegal, perverted or improper use of the process; and (3) damage to the plaintiff. Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 378-79 (Tex.Ct.App.1989).

The district court acknowledged that Vahlsing had presented evidence to show that attorney Mock had represented Vahlsing's sister in addition to Commercial Union, that the sister may have harbored vindictive feelings toward Vahlsing, and that Mock may have served the sister's vindictiveness when he filed the motion for contempt that led to Vahlsing's incarceration. However, the district court ruled, "there's no sufficient evidence in my mind that Commercial Union's primary purpose was to do other than collect the debt" (emphasis added).

This was a correct application of the facts to the law. When process is employed for the purpose for which the law intends its use, no abuse of process occurs even though the person using the process may have an improper motive in addition to his lawful intention. Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d at 379. See also Restatement (Second) of Torts Sec. 682, comment b ("there is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior motive of benefit to the defendant"). While Mock's actions may have incidentally served the sister's spite, the evidence left no doubt that Commercial Union's primary purpose in instituting the proceedings that put Vahlsing in jail was the collection of a court judgment. A reasonable jury could have reached no other conclusion.

Negligence

The district court correctly instructed the jury that a negligence claim contains four basic elements: (1) that the defendant owed the plaintiff a duty of care, (2) that the defendant was negligent (i.e. failed to use reasonable care) in the discharge of that duty, (3) that the defendant's negligence was the proximate cause of the plaintiff's injury, and (4) that the plaintiff suffered compensable damage as a result. About the duty requirement, the court told the jury (1) that Commercial Union "owes to everyone the duty to conduct itself in accordance with the law as a reasonably careful, good corporate citizen", (2) that attorney Mock had a "responsibility for conducting himself as a reasonably careful attorney" who was "reasonably familiar with the law," but (3) that Mock owed a duty "first and foremost" to his client. Finally, the court said:

[I]f you believe the evidence that at a certain time Mr. Mock became aware that Mr. Vahlsing claimed to have filed for bankruptcy, you may consider, having in mind that Mr. Vahlsing was then imprisoned, and having in mind what the stakes were there, a person's liberty, what duty,...