Frederick Henry Vahlsing, Jr. v. Commercial Union Insurance Co., Inc.

928 F.2d 486, 1991 U.S. App. LEXIS 4515, 21 Bankr. Ct. Dec. (CRR) 796, 1991 WL 36790
CourtCourt of Appeals for the First Circuit
DecidedMarch 22, 1991
Docket90-1624
StatusPublished
Cited by21 cases

This text of 928 F.2d 486 (Frederick Henry Vahlsing, Jr. v. Commercial Union Insurance Co., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frederick Henry Vahlsing, Jr. v. Commercial Union Insurance Co., Inc., 928 F.2d 486, 1991 U.S. App. LEXIS 4515, 21 Bankr. Ct. Dec. (CRR) 796, 1991 WL 36790 (1st Cir. 1991).

Opinion

SELYA, Circuit Judge.

The appellant, Frederick Henry Vahls-ing, 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 Vahls-ing’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. § 362(a). Commercial Union contends that it never received such notice; at trial, it introduced evidence in *489 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 Vahls-ing 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 Vahls-ing 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. § 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. § 362(h), or the various common-law and statutory theories under which Vahlsing chose to bring suit. 1

*490 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).

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928 F.2d 486, 1991 U.S. App. LEXIS 4515, 21 Bankr. Ct. Dec. (CRR) 796, 1991 WL 36790, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frederick-henry-vahlsing-jr-v-commercial-union-insurance-co-inc-ca1-1991.