Swain et al v. Dredging, Inc. d/b/a Scott's Concrete et al

IN THE UNITED STATES BANKRUPTCY COURT FOR THE
WESTERN DISTRICT OF MISSOURI
IN RE: )
)
FRANK LAMONT SWAIN and ) Case No. 00-42395
ESTHER MARIE SWAIN, )
)
Debtors. )
)
FRANK LAMONT SWAIN and ) Adversary No. 04-5255
ESTHER MARIE SWAIN, )
)
Plaintiffs, )
)
v. )
)
DREDGING, INC., d/b/a )
SCOTT’S CONCRETE and )
JANE ELLEN MARTIN, )
)
Defendants. )
MEMORANDUM OPINION
Debtors Frank and Esther Swain filed a Complaint seeking a judgment of contempt and
both compensatory and punitive damages against defendants Dredging, Inc., d/b/a Scott’s
Concrete, and Jane Martin (the Defendants) for an alleged violation of 11 U.S.C. § 524(a). The
parties then filed cross motions for summary judgment. This is a core proceeding under 28
U.S.C. § 157(b)(2)(A) over which the Court has jurisdiction pursuant to 28 U.S.C. § 1334(b),
157(a), and 157(b)(1). The following constitutes my Findings of Fact and Conclusions of Law
in accordance with Rule 52 of the Federal Rules of Civil Procedure as made applicable to this
proceeding by Rule 7052 of the Federal Rules of Bankruptcy Procedure. For the reasons set
forth below, I will grant Defendants motion for summary judgment.
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 1 of 7

2
FACTUAL BACKGROUND
On February 15, 2000, Esther Swain executed a check drawn on the Bank of Versailles
in the amount of $17,261.52 payable to Dredging, Inc. On February 17, 2000, the Bank of
Versailles returned the check for insufficient funds. Jane Martin, an officer and the registered
agent for Dredging, Inc., filed a “Bad Check Referral From” with James Icenogle, the
Prosecuting Attorney for Camden County, Missouri. On March 20, 2000, Icenogle sent the
first notice to Ms. Swain informing her that a referral had been filed. On April 3, 2002,
Icenogle sent a second notice. In addition, on March 19, 2000, Icenogle advised Ms. Swain
that, unless payment was made, along with a “merchants fee” in the amount of $10.00 and a
statutory penalty in the amount of $25.00, he would begin a criminal prosecution. On May 30,
2000, Ms. Swain paid the sum of $17,261.52 to Icenogle, along with the fee and penalty.
Icenogle forwarded the payment to Dredging, Inc.
On June 28, 2000, the Swains filed a Chapter 13 bankruptcy petition. On August 8,
2000, Dredging, Inc. filed a proof of claim for other unpaid charges in the amount of
$11,337.96. During 2001, the Chapter 13 trustee filed several motions to convert the case to
Chapter 7 based on failure to make payments, failure to provide insurance, and other
difiiculties. Eventually, on November 6, 2001, the Chapter 13 case was converted to Chapter
7, and on February 20, 2002, debtors received a discharge.
On March 6, 2002, the Chapter 7 trustee filed an adversary proceeding against
Dredging, Inc. alleging that the payment of $17,261.52 within 90 days of the Chapter 13
bankruptcy filing was a preferential transfer. On June 3, 2002, the trustee and Dredging, Inc.
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 2 of 7

3
entered into a settlement agreement pursuant to which Dredging, Inc. agreed to return the sum
of $11,500.00 to the trustee.
There is no dispute that, sometime prior to the filing of the adversary proceeding,the
Defendants provided Icenogle’s office with pleadings filed in the bankruptcy case. There is,
however, no evidence that the Defendants filed a second “Bad Check Referral Form” with the
prosecutor at any time after the bankruptcy case was filed; indeed, Icenogle states in his
affidavit that they did not, and the Swains offer no evidence to the contrary.
On August 19, 2002, and on September 3, 2002, Icenogle again sent Ms. Swain form
letters stating that she had executed a check that had been returned for insufficient funds and
that unless payment was made, a criminal prosecution would result. On September 26, 2002,
the Camden County, Missouri Prosecuting Attorney issued an affidavit of probable cause,
despite being informed by both the trustee and the Swains’ bankruptcy attorney of the
bankruptcy case, and despite the fact that Ms. Swain had previously made the check good. In
October of 2002, Icenogle filed an information charging Ms. Swain with a Class D felony and
caused a warrant for her arrest to be issued. On February 29, 2004, Ms. Swain was arrested.
After posting a bond of $3,500.00, she was released. On March 31, 2004, Icenogle dismissed
the charges.
The Swains, who have brought no action against Icenogle either in his individual or
professional capacity, allege that the Defendants violated the discharge injunction by taking
affirmative steps to cause Icenogle to attempt to collect a discharged debt.
The Defendants do not deny that they notified Icenogle of the bankruptcy filing, which
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 3 of 7

1Celotex v. Catrett, 477 U.S. 317, 322-26 (1986); Tudor Oaks Limited Partnership v.
Cochrane, 124 F.3d 978, 981 (8th Cir. 1997), cert. denied, 522 U.S. 1112.
4
is of public record. Icenogle, however, submitted an affidavit stating that he alone made the
decision to prosecute Ms. Swain, that the Defendants exerted no pressure on him, and that the
collection of the debt is a collateral issue in the criminal prosecution of someone who
intentionally executes a check for insufficient funds. The parties filed cross motions for
summary judgment. In their motion for summary judgment the Swains seek relief pursuant to
both section 362 and 524 of the Bankruptcy Code (the Code). In their Complaint, however,
they only sought relief under section 524.
DISCUSSION
Rule 7056 of the Federal Rules of Bankruptcy Procedure provides that Rule 56 of the
Federal Rules of Civil Procedure applies when a party moves for summary judgment in an
adversary proceeding in this Court. Rule 56 states that the “judgment sought shall be rendered
forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.”1
The Swains’ motion for summary judgment alleges a violation of both sections 362 and
524 of the Code. It is not clear from the record the exact date that the Defendants notified
Icenogle that the Swains had filed for bankruptcy relief. The record is, however, clear that
Icenogle instituted the first criminal investigation before the debtors filed for bankruptcy
relief on June 28, 2000, and the second criminal investigation after debtors had received their
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 4 of 7

211 U.S.C. § 362(a).
311 U.S.C. § 362(c)(2)(C).
411 U.S.C. § 524(a)(2).
5
discharge on February 20, 2002. The Code provides that the stay commences with the filing
of the case2 and continues until the discharge is granted:
(C) Except as provided in subsections (d), (e), and (f) of this section–
. . .
(2) the stay of any other act under subsection (a) of this section
continues until the earliest of–
. . .
(C) if the case is a case under chapter 7 of this title
concerning an individual . . . the time a discharge is
granted or denied.3
There is, therefore, no evidence before me on this motion for summary judgement that
the Defendants violated the automatic stay.
Section 524 of the Code enjoins all actions to collect a debt that has been discharged:
(a) A discharge in a case under this title–
. . .
(2) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an act
to collect, recover or offset any such debt as a personal liability
of the debtor, whether or not discharge of such debt is waived.4
The Swains allege that the Defendants “requested Mr. Icenogle to send his standard bad check
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 5 of 7

5Plaintiff’s Suggestions in Opposition to Defendants’ Cross-Motion for Summary Judgment,
Doc. # 20 at pg. 2.
6
letter to Ms. Swain on August 12, 2002.”5 Icenogle, however, testified in both his deposition
and his sworn affidavit that he made the decision to prosecute Ms. Swain without being
requested to do so by the Defendants. Jane Martin claims that she had one contact with
Icenogle for the sole purpose of informing him of the conversion of the bankruptcy case to
Chapter 7. Icenogle confirms that this is the only contact he had with Ms. Martin after the
bankruptcy filing. The Swains offer no contradictory evidence, and nothing at all to support
their contention that, post bankruptcy, the Defendants requested that Icenogle initiate
proceedings against Ms. Swain. There is, thus, no genuine issue as to the material fact that Ms.
Martin’s action in providing the prosecutor with copies of bankruptcy court pleadings was the
only contact the Defendants had with the prosecutor’s office after the commencement of the
bankruptcy case. Such action by the Defendants violates neither the automatic stay nor the
discharge injunction. The filing of a bankruptcy case is a public record. In fact, the Clerk of the
Bankruptcy Court sends a notice of a bankruptcy filing to all creditors listed on a debtor’s
schedules. The public has access to any pleadings filed in a bankruptcy case. Simply notifying
another individual of the filing of a petition, or any other activity during the course of a
bankruptcy case, cannot, therefore, be a violation of the automatic stay or the discharge
injunction.
The Swains allege damages related to Ms. Swain’s arrest. They claim Mr. Swain had a
heart attack while watching the arrest. They claim Ms. Swain suffered emotional distress and
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 6 of 7

7
embarrassment while incarcerated. They claim Ms. Swain incurred attorney’s fees, costs, and
lost wages as a result of the arrest. They did not, however, name Icenogle or the Office of the
Prosecuting Attorney as a party to this proceeding. Nor did they claim that Ms. Swain was
falsely arrested. This Complaint and the motion for summary judgment are directed solely at
the Defendants. I find the Swains have offered no evidence, other than their allegations, that
would allow me to find that the Defendants violated the discharge injunction by notifying
another individual or entity of a bankruptcy filing.
I will, therefore, deny the Swains’ motion for summary judgment and grant the
Defendant’s motion for summary judgment.
An Order in conjunction with this Memorandum Opinion will be entered this date.
/s/ Arthur B. Federman
Bankruptcy Judge
Date: February 11, 2005
Copy to: William P. Nacy
David C. Stover
Case 04-05255-abf Doc 24 Filed 02/11/05 Entered 02/11/05 14:11:36 Desc Main
Document Page 7 of 7