Boydstun v. Reed

218 B.R. 840, 1998 U.S. Dist. LEXIS 5016, 1998 WL 170050
CourtDistrict Court, N.D. Mississippi
DecidedApril 9, 1998
Docket1:96CV25-S
StatusPublished
Cited by3 cases

This text of 218 B.R. 840 (Boydstun v. Reed) is published on Counsel Stack Legal Research, covering District Court, N.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boydstun v. Reed, 218 B.R. 840, 1998 U.S. Dist. LEXIS 5016, 1998 WL 170050 (N.D. Miss. 1998).

Opinion

OPINION

SENTER, Chief Judge.

This cause is before the court upon an interlocutory appeal of an order entered by the United States Bankruptcy Judge. Ap-pellee filed an adversary proceeding for in-junctive relief in the Bankruptcy Court against the appellants based upon violation of the automatic stay. After the Bankruptcy Judge granted the relief requested, appellants filed a motion to dismiss the adversary proceeding. It is the denial of the motion to dismiss by the Bankruptcy Judge which is before the court in this appeal.

FACTS

Bobby Gene Reed filed a petition for relief under Chapter 13 in the United States Bankruptcy Court on March 3, 1995. On April 10, 1995, R.W. Boydstun, an attorney licensed to practice law in Mississippi, filed a complaint for replevin, on his own behalf, in the Circuit Court of Winston County against Bobby Gene Reed to recover a “450B Timberjack Grapple Skidder, SN# CK2426 valued at $50,000.00.” 1 Although he acknowledged that he was aware of the bankruptcy, Boyds-tun did not seek a lift from the automatic stay. The writ of replevin was executed by the sheriff on April 11, 1995. On the following day, Reed filed an adversary complaint seeking injunctive relief, compensatory and punitive damages for the willful violation by Boydstun of the automatic stay. After hearing the matter on April 13, 1995, Judge Houston orally granted the preliminary injunction. In issuing his ruling Judge Houston said:

On April the 10th, 1995, a complaint for replevin as to the Timbexjack Skidder was filed by Mr. Boydstun. On April the 11th, 1995, the skidder was seized by the Sheriff of Winston County, Mississippi. No relief from the automatic stay was obtained. The reason offered is that the property belongs to Mr. or Mrs. Boydstun and is not *841 a part of the bankruptcy estate. I would suggest that the parties read Section 541 of the Bankruptcy Code, which clearly indicates that a possessory interest of the Debtor is clearly protected by the automatic stay.
The filing of the complaint in replevin and the seizure of this skidder is an obvious violation, in the opinion of the Court, of Section 362(a) of the Bankruptcy Code.
To add insult to injury, on the same date the Debtor is arrested on the affidavit of Mr. Boydstun for embezzling the skidder, the identical property placed in the Debt- or’s possession by Mr. Boydstun, under what the Court has perceived as a title retention sales contract.
The Court does not have before it today a complaint for false arrest, only the issue of what relief should be granted because of a violation of the Bankruptcy Code’s automatic stay, fortunately. 2

Three months later, Boydstun, acting as his own attorney, moved to dismiss the complaint reiterating the legal argument he presented in his answer to the adversary complaint. 3 In his motion to dismiss, Boydstun “vehemently” denied that he violated the automatic stay and offered as legal support 11 U.S.C. § 362(b)(1) which provides for the continuation or commencement of criminal proceedings against a debtor after the filing of a bankruptcy petition without violating the automatic stay. Boydstun offered further complaints concerning Reed in his motion, but failed to instruct the court, either legally or factually, how those complaints would allow the court to dismiss the adversary proceeding. Judge Houston denied Boydstun’s motion to dismiss on August 11, 1995. Thereafter, Boydstun filed his notice of appeal.

THE APPEAL

As perceived by the appellants, the issues are as follows:

1. Whether criminal actions instigated after the filing of bankruptcy by a creditor for embezzlement against a Debtor violates the automatic stay;
2. Whether the bankruptcy court erred in finding that there was a substantial possibility that the Debtor will succeed on the merits of his claim that the creditor violated the automatic stay; and
3. Whether the bankruptcy court’s finding that the Debtor had a “possessory interest” in the property was clearly erroneous since the contract was properly terminated prior to the filing of the bankruptcy petition.

Issues number two and three are not properly before this court. Issue number two clearly restates, as applied to the facts in the case at bar, one of the elements required for the granting of a preliminary injunction. Issue number three pertains to a finding of fact by Judge Houston in granting the temporary relief. The appellants bring this appeal on the denial of their motion to dismiss in which the sole legal argument presented pertains to the affect-of the automatic stay on criminal proceedings. Because issues number two and three are not properly before this court, neither will be addressed.

After easily dispensing with two of the appellants’ issues, the court turns its attention to issue number one — whether criminal actions for embezzlement violate the automatic stay. In their brief, the appellants proceed to argue, untimely, the injunctive relief granted by Judge Houston. . The appellants cite Younger v. Harris, 401 U.S. 37, 53, 91 S.Ct. 746, 754-55, 27 L.Ed.2d 669 (1971), for the proposition that state criminal proceedings may be enjoined only when there is a showing of bad faith or harass *842 ment. Further, the appellants inform this court that a bankruptcy court in South Dakota held “there was a strong policy against federal interference in state criminal proceedings.” Legislative history is provided in the brief by the appellants, once again, for the proposition that criminal actions may proceed in spite of bankruptcy. The appellants conclude their brief by requesting a reversal of the order of the bankruptcy judge and dismissal of the case against the Boyds-tuns. According to the appellants:

The bankruptcy court was clearly erroneous when it issued a preliminary injunction in the instant ease. There is no “substantial probability” that the Debtor will succeed on the merits of his claim. Likewise, the bankruptcy court was clearly erroneous in finding as fact that the Debtor had a “possessory interest” in the subject property. The Debtor had no interest in the equipment at issue on the date bankruptcy was filed. Moreover, the bankruptcy court’s order was clearly erroneous because criminal proceedings against a debtor are not subject to the automatic stay.

The appellants very clearly take issue with the relief granted by Judge Houston at the hearing for the preliminary injunction and not, necessarily, the denial of the motion to dismiss. The court acknowledges, however, that the legal argument in the motion to dismiss is actually an appeal of the Judge’s determination that there was a substantial likelihood that the appellants had violated the automatic stay.

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Cite This Page — Counsel Stack

Bluebook (online)
218 B.R. 840, 1998 U.S. Dist. LEXIS 5016, 1998 WL 170050, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boydstun-v-reed-msnd-1998.