DeLay v. Underwood (In Re DeLay)

25 B.R. 898, 1982 Bankr. LEXIS 5252
CourtUnited States Bankruptcy Court, W.D. Missouri
DecidedDecember 17, 1982
Docket19-40242
StatusPublished
Cited by7 cases

This text of 25 B.R. 898 (DeLay v. Underwood (In Re DeLay)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DeLay v. Underwood (In Re DeLay), 25 B.R. 898, 1982 Bankr. LEXIS 5252 (Mo. 1982).

Opinion

MEMORANDUM OPINION AND ORDER

FRANK P. BARKER, Jr., Chief Judge.

This matter is before the Court pursuant to an Order of this Court to Show Cause why the respondents should not be held in contempt for violations of the automatic stay provided in 11 U.S.C. § 362. The alleged contemptuous acts included, (1) dunning the debtor by means of a “collection letter” after his bankruptcy petition had been filed, (2) oral harassment of and threats to the debtor in the courthouse hallway just prior to the debtor’s scheduled § 341 meeting of creditors, (3) instigation of a criminal complaint against the debtor for the purpose of collection of a pre-petition debt, (4) the arrest and subsequent jailing of the debtor shortly after he received his discharge in bankruptcy, and finally, (5) causing the debtor to be bound over for trial in Missouri State Court on the aforementioned criminal charge.

The fact situation can be more easily understood if the interrelationship between the various parties is explained at the outset.

Respondent T.J. Underwood is a distributor of various types of merchandise as the president of T & J Distributors, Inc. His *900 business is located in California, Missouri, the county seat of Moniteau County.

Respondent John T. Kay is the prosecuting attorney of Moniteau County and also acted as Mr. Underwood’s attorney in various civil matters including Mr. Underwood’s attempt to collect a $1,076.55 debt from the debtor.

Respondent Zachary T. Cartwright practices law with Mr. Kay and was appointed the assistant prosecuting attorney of Moni-teau County by Mr. Kay.

Respondent Robert Seek is an attorney practicing in Miller County, Missouri. He was appointed as a special prosecutor for that county which is adjacent to Moniteau County.

Wayne DeLay, the debtor, who was an independent contractor sold merchandise obtained from Mr. Underwood and other similarly situated distributors to his own customers located throughout central Missouri. DeLay serviced his customers from a van in which he carried merchandise. His practice was to sell items directly from the van or to take orders for specific items which he would obtain and deliver to the customer at a later date.

Debtor’s business relationship with Mr. Underwood consisted of, at various times, driving to T & J Distributors and obtaining various items of merchandise which had either already been ordered by customers or to restock the supply in his van. He would sign a receipt for the merchandise, load it into his van and then proceed along his sales route. At the end of each week he would fill out a report listing all the T & J Distributors merchandise he had sold on a T & J invoice and pay them for the merchandise. Debtor testified he deducted “his commission and over-rides” before settling up.

The debtor further testified that it was his practice to record a sale on a T & J Distributors’ invoice if the sale was of T & J merchandise. He similarly used the invoices of other distributors if he sold their merchandise. He sometimes used his own invoice if it was his own merchandise that he sold. Debtor also testified that at least some of his customers did not like Mr. Underwood and would not knowingly purchase T & J Distributors’ merchandise. In those cases, the debtor testified that in order to complete a sale he would record the transaction on his own invoice rather than use one of T & J’s.

This business relationship between DeLay and Underwood existed to the apparent satisfaction of the parties for some time. The evidence presented established that during the entire course of this relationship, Underwood kept a running account with DeLay which showed that DeLay always owed Underwood for at least some unsold merchandise.

In May of 1981 the debtor obtained some merchandise from T & J in the usual manner. That merchandise included several types of welding rods. Debtor later sold those welding rods to the MFA store in Tipton, Missouri. He - testified that the store manager was one of his customers who refused to deal with Underwood or T & J, so he billed MFA on his own invoice and received a check for $336.15 payable to himself. He subsequently deposited that check into his own bank account.

Shortly thereafter DeLay and Underwood had a falling out and ended their business relationship. DeLay filled out a final sales report which did not include the money he had been paid by the MFA. DeLay testified at trial that Underwood owed him money for some unpaid prior services. He further testified that he returned all unsold T & J merchandise from his garage and van.

On August 17, 1981 debtor and his wife filed a voluntary joint Chapter 7 bankruptcy petition. T & J Distributors, Inc. was scheduled as a general creditor holding a $1,200.00 disputed claim.

On August 24, 1981 the Clerk of the Bankruptcy Court mailed a notice of the § 341 meeting of creditors to all listed creditors including T & J Distributors, Inc. That notice included notice of the automatic stay. Evidence presented at the trial indicated that Underwood would have received *901 this notice on August 25,1981. Underwood testified that he did receive the notice but could not remember the exact day.

Also on August 25, respondent Kay, acting as Mr. Underwood’s attorney, caused a demand collection letter to be sent to DeLay. That letter stated: “I have been retained by T & J Distributors for purposes of collecting your account now delinquent in the amount of $1,076.55. It is our understanding that you have not made payment in spite of repeated requests.”

Both Underwood and Kay testified that Underwood had retained Kay approximately a month earlier to aid him in collecting the debt. Kay testified that the press of other business had prevented him from sending out the letter to DeLay until August 25, 1981.

This collection letter after the filing of the bankruptcy petition was a violation of the automatic stay. I am, however, willing to accept their testimony on this point and will, therefore find no contempt on the part of either of the respondents involved for this particular action.

The second allegation of contemptuous conduct involves a meeting between Underwood and DeLay in the hallway outside the courtroom in Jefferson City, Missouri just prior to the § 341 meeting of creditors on September 25, 1981.

DeLay testified that he was standing in the hallway with his wife and his attorney, Jack Pletz, when Underwood approached them and:

“asked me very belligerently what I was going to do about his money that I owed him.
Q: What did you say?
A: I informed him at that point, ‘Nothing at this time’.
More conversation took place. Mr. Pletz let him know that he was my attorney and Mr. Pletz instructed me not to talk to him, at which time Mr. Underwood said, T will get my money one way or another.’
Q: Did he indicate to you at that time that he intended or was thinking of filing criminal charges?

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Cite This Page — Counsel Stack

Bluebook (online)
25 B.R. 898, 1982 Bankr. LEXIS 5252, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delay-v-underwood-in-re-delay-mowb-1982.