Shockley ex rel. Shockley v. Brown

1992 OK CIV APP 60, 831 P.2d 1010, 63 O.B.A.J. 1853, 1992 Okla. Civ. App. LEXIS 34
CourtCourt of Civil Appeals of Oklahoma
DecidedMay 12, 1992
DocketNo. 75885
StatusPublished
Cited by1 cases

This text of 1992 OK CIV APP 60 (Shockley ex rel. Shockley v. Brown) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shockley ex rel. Shockley v. Brown, 1992 OK CIV APP 60, 831 P.2d 1010, 63 O.B.A.J. 1853, 1992 Okla. Civ. App. LEXIS 34 (Okla. Ct. App. 1992).

Opinion

OPINION

HANSEN, Vice-Chief Judge:

Appellants, Marissa A. Shockley, a minor by and through Douglas Shockley, her father and next friend and Douglas Shockley, individually (Appellants) seek review of the trial court’s “stay” order which enjoins and prohibits them from instituting or continuing any action or engaging in any act to collect the debt alleged in their Petition from Appellee. Appellants brought this negligence action against Appellee for injuries sustained by Appellant Marissa A. Shockley when she was struck by Appel-lee’s automobile. Appellee maintains the debt was discharged in bankruptcy. We reverse.

Appellants filed the present action on November 19, 1987, to recover compensatory and punitive damages from Appellee for injuries caused in a November 6, 1987, automobile/pedestrian accident. On June 16, 1989, Appellee filed his voluntary petition in bankruptcy pursuant to Chapter 7, Title 11, United States Code. On June 19, 1989, Appellee filed a Plea of Abatement with the Oklahoma County District Court, seeking abatement because of the pending bankruptcy. Appellee was granted a discharge in bankruptcy on September 27, 1989.1 On May 30, 1990, the trial court granted Appellee’s Motion to Stay Proceeding, permanently enjoining and prohibiting Appellants from seeking to collect this debt [1012]*1012from Appellee. Appellants did not respond to the Motion to Stay.

In their Petition below, Appellants sought compensatory damages for Appel-lee’s alleged negligence, and punitive damages for his “willful, wanton and reckless disregard” of their rights. The Pre-Trial Conference Order of January 30, 1989, indicates Appellants were seeking a total of $1,312,000.00 in damages for personal injury, pain and suffering, medical and hospital expenses loss of earnings and impairment of earning capacity, past and future medical expenses, and deprivation of services. The Order did not reflect any amount sought in punitive damages. Appellants’ claims for $1,312,000.00 were included on Appellee’s Schedule A-3: Unsecured Creditors in the bankruptcy action although there was no reference that punitive damages were being sought.

Appellee admits Appellants did not receive official notice of Appellee’s bankruptcy action because their names and addresses were “inadvertently omitted” from the mailing matrix. Because of such omission, Appellants did not receive any of the statutorily-required notices, including the first meeting of creditors and notice of bar dates. However, Appellants’ attorney received notice of the bankruptcy on the date the bankruptcy petition was filed by a phone call from Appellee’s attorney. Further, the Plea in Abatement filed in this case three days after Appellee filed his bankruptcy petition, listed the case number of Appellee’s bankruptcy case.

Appellants contend their claim constituted 92% of the unsecured claims asserted against Appellee in the bankruptcy and that his failure to properly schedule Appellants constituted a denial of due process. Appellee argues the notice given to Appellants and their attorney was legally sufficient and Appellants’ failure to object to the discharge in the bankruptcy court, rendered the debt discharged.

Appellants maintain the trial court erred in applying Appellee’s discharge to bar their claim because they were denied sufficient notice of the bankruptcy proceedings, making the claim non-dischargeable under 11 U.S.C. § 523(a)(3). Appellants do not specify whether the debt is to be governed by subparagraph (A) or (B) of that subsection. Appellants further argue the trial court abused its discretion by ordering the stay because punitive damages are non-dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(6).

Section 342(a), Title 11, United States Code, provides: “There shall be given such notice as is appropriate, including notice to any holder of a community claim, of an order for relief in a case under this title.”

11 U.S.C. § 523(a) lists the exceptions to a Chapter 7 discharge. Individual debtors are not discharged from any debt:

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(3) neither listed nor scheduled under Section 521(1) of this title,2 with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit—
(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dis-chargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request;
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(6) for willful and malicious injury by the debtor to another entity or to the property of another entity;
* * * * * *
(Emphasis supplied.)

[1013]*1013Appellants cite Reliable Electric Co. Inc. v. Olson Construction Co., 726 F.2d 620 (10th Cir.1984) in support of their position that they lacked adequate notice, making the debt nondischargeable, and rendering the trial court’s stay order an abuse of discretion. In Reliable, the corporate debt- or failed to list the creditor in its Chapter 11 reorganization. The 10th Circuit affirmed the bankruptcy court’s order which found the creditor’s claim was not discharged or subject to the confirmed plan because the creditor had no written notice of the confirmation hearing, even though the debtor’s attorney had notified the creditor’s attorney by telephone that Reliable had instituted Chapter 11 proceedings. The 10th Circuit held that the creditor had been denied due process of law. As specifically applied to bankruptcy reorganization proceedings, a creditor who has general knowledge of a debtor’s reorganization proceeding, has no duty to inquire about further court action. Reliable, at 622. “The creditor has a ‘right to assume’ that he will receive all of the notices required by statute before his claim is forever barred.” Supra.

The 10th Circuit further expounded upon the rule in Reliable in In re Green, 876 F.2d 854 (10th Cir.1989). In In re Green, the creditor was not duly scheduled in the bankruptcy proceeding. However, the facts indicated the creditor had received actual timely notice of the filing and the bar date. In concluding the creditor was not deprived of due process, the Court held that because of the specific language of 11 U.S.C. § 523

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Related

SHOCKLEY BY AND THROUGH SHOCKLEY v. Brown
831 P.2d 1010 (Court of Civil Appeals of Oklahoma, 1992)

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Bluebook (online)
1992 OK CIV APP 60, 831 P.2d 1010, 63 O.B.A.J. 1853, 1992 Okla. Civ. App. LEXIS 34, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shockley-ex-rel-shockley-v-brown-oklacivapp-1992.