DANIEL S. OPPERMAN, Bankruptcy Judge.
Before the Court is the City of Flint's ("the City") Motion to Dismiss Debtor Willie E. Douglas's ("Douglas") Motion for Order to Show Cause Why the City of Flint Should Not be Held in Contempt and Assess Punitive Damages. The parties have endured a tortured history, most of which is irrelevant to the instant Motion. The relevant background follows. Douglas filed her bankruptcy petition on July 1, 2013. Douglas's Schedule E reflected a debt to the City of $700.00 for water/sewer service. While the Schedule does not provide the service address, the evidence has established that the service at issue went to a home at 2506 Mallery Street in Flint. On July 23, 2013, Douglas filed her First Amended Emergency Motion for contempt against the City. In that Motion Douglas alleged after she filed her bankruptcy petition the City turned off the water at Mallery Street, due to non-payment of the aforementioned scheduled debt, despite receiving notice of her bankruptcy. The City denied knowing about the bankruptcy at the time it turned off Douglas's water.
Following a brief period for discovery, a hearing on Douglas's Motion was scheduled for December 11, 2013. That day the parties settled the issues set for hearing. They put the terms of that settlement on the record at the hearing on December 11, 2013, and the Court ratified that settlement by an Order dated January 3, 2014. A few weeks later, on January 31, 2014, Douglas received her discharge.
The discharge date and the settlement agreement are vital. The settlement resolved, expressly or by implication, all claims regarding the City's alleged improper debt collection efforts as of December 11, 2013. Accordingly, Douglas can only seek relief for conduct that occurred after December 11, 2013, and that either violates the settlement agreement, or violates the discharge injunction that went into effect on January 31, 2014.
Given the importance of the settlement terms, the Court restates them here:
Accordingly, between the settlement agreement and the discharge injunction, Douglas should have been safe from collection efforts regarding any scheduled debt she incurred before her July 1, 2013 petition, including any discharged water/sewer debt to the City. However, on July 25, 2014 Russell Collection Agency, Inc. ("Russell") sent Douglas a letter claiming Douglas owed an additional $287.08 to the City for water/sewer services at Mallery Street. The letter alleges a service date of December 31, 2013, which would result in a post-petition debt not subject to the December 11, 2013 settlement or the January 2014 discharge. Douglas claims the debt referenced in the letter actually accrued before her bankruptcy petition and was discharged.
On October 8, 2014 Douglas filed a Motion for Order to Show Cause Why the City of Flint Should Not be Held in Contempt and Assessed Punitive Damages. There Douglas alleged numerous actions by the City that she claimed demonstrate a "reckless disregard" for her rights:
A clear understanding of the timeline above and the December 2013 settlement terms is necessary to the Court's decision about the City's Motion. The last fact vital to the Court's analysis is the City's knowledge, in July 2014, that Douglas owned Mallery Street and was responsible for that property's water/sewer account at all times relevant to the July 2014 letter. Before the December 2013 hearing, confusion existed about this property because Douglas did not purchase Mallery Street under the name Douglas. Instead, she purchased it under her maiden name, Willie Wilborn, and maintained the Mallery Street water/sewer account under the name Wilborn for the entire time she owned the property.
According to the City, this confusion caused its mistaken belief that Wilborn, not Douglas, owned Mallery Street. Thus, the City claims its pursuit of Wilborn in July 2014 did not violate the discharge injunction or December 2013 settlement agreement. This is a fair defense if, as the City alleges, it had no way of knowing Wilborn and Douglas were the same person.
Douglas's Motion for Order to Show Cause and her Response to the City's Motion to Dismiss take issue with the City's position. Those documents argue, in detail, that the City's actions in the years leading to the December 11, 2013 settlement contradict the City's claim of ignorance. However, there are two reasons the Court need not delve into the detailed history Douglas provides. For one thing, on December 11, 2013 the City and Douglas settled the claims between them arising from actions that occurred before that date. The Court's only concern, at this time, is whether the City took action after December 11, 2013 that violated the discharge injunction or the settlement agreement as ratified by the Court.
Additionally, the City's conduct before December 2013 is not necessary to show the City knew, when the July 2014 letter went out, that Wilborn and Douglas was the same person, or to show the City knew Douglas was responsible for Mallery Street. By the time this matter reached the December 2013 hearing date, the City had received ample information establishing that Wilborn and Douglas were one in the same. Accordingly, the City knew long before the July 2014 letter that Wilborn was Douglas and Douglas was responsible for the Mallery Street debt.
Thus, the Court now faces two questions. First, did the City, after December 11, 2013, engage in the conduct Douglas claims in her Motion for Order to Show Cause? Second, if the City did engage in that conduct, did that conduct violate either the settlement agreement or the discharge injunction in a way that subjects the City to contempt? The City answers at least the second question in the negative and seeks dismissal of Douglas's Motion. While most of Douglas's claims can be dismissed at this time, numerous questions of material fact remain that prevent the Court from fully disposing of this matter.
Although the City captioned its pleading as a Motion to Dismiss, the City's Motion relies on matters beyond Douglas's Motion for Order to Show Cause. Accordingly, the Court will treat the City's Motion as one for Summary Judgment.
FRCP 56 applies in its entirety to bankruptcy adversary proceedings through Fed. R. Bankr. P. 7056. Rule 7056(c) provides that summary judgment is proper "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 judgment as a matter of law." See Choate v. Landis Tool Co., 46 F.Supp. 774 (E.D. Mich. 1980). When considering a motion for summary judgment, a court must view the evidence in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348 (1986).
The moving party bears the burden of showing the absence of a genuine issue of material fact as to an essential element of the other party's case. Street v. J.C. Bradford & Co., 886 F.2d 1472 (6th Cir. 1989) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). The burden then shifts to the nonmoving party once the moving party has met its burden, and the nonmoving party must then establish that a genuine issue of material fact does indeed exist. Janda v. Riley-Meggs Industries, Inc., 764 F.Supp. 1223, 1227 (E.D. Mich. 1991).
The Court can deny most of Douglas's claims with minimal discussion. Civil contempt is remedial and is used to coerce a party to comply with a court order or to compensate a party for another's non-compliance with a court order. In re Joint Eastern & Southern Districts Asbestos Litigation, 830 F.Supp. 1153, 1155 (C.D. Ill. 1993). One seeking a contempt order must establish three elements by clear and convincing evidence: (1) the alleged contemnor knew of the order he allegedly violated; (2) he violated the order; and (3) the order was specific and definite. Hunter v. Magack (In re Magack), 247 B.R. 406, 410 (Bankr. N.D. Ohio 1999) (citing Glover v. Johnson, 138 F.3d 229, 244 (6th Cir. 1998); other citations omitted).
The Court grants the City's Motion to Dismiss Douglas's request for contempt regarding the City's efforts to include a confidentiality agreement and comprehensive waiver in its settlement with her. These are common provisions in settlement agreements and the Court does not find that by sending Douglas a proposed agreement including these terms the City was trying to "force" her to sign an improper document. Furthermore, neither the settlement agreement nor the Order ratifying it prohibited a discussion about including a confidentiality clause or a broad waiver. Even if the City did try to "force" Douglas to sign confidentiality clause or comprehensive waiver, that conduct did not demonstrate reckless disregard for Douglas's rights or violate a specific or definite Order of this Court. Therefore, no genuine issues of material fact remain on this issue and it is dismissed.
Douglas's request for contempt regarding the City's payment implicates the settlement agreement the parties placed on the record on December 11, 2013. Neither that agreement nor the Order ratifying it required the City to make payment within any specific time period. Instead, as Douglas's own counsel stated on the record, the agreement only required the City "do their best" to pay Douglas within seven days. The Court has no evidence before it suggesting the City failed to do its best to pay within seven days and, in any event, the City did make full payment less than a month after settling. Thus, even if Douglas's allegation about the timing of payment is true, the City did not violate a specific or definite order and no action is necessary to coerce the City to comply with an Order. No genuine issues of material fact remain regarding this issue so the Court grants the City's Motion to Dismiss Douglas's request for contempt regarding the $10,000.00 payment.
The Court also grants the City's Motion to Dismiss Douglas's request for contempt arising out of the City's alleged direction of Russell regarding Russell's actions in September of 2013. That conduct was resolved by the December 11, 2013 settlement and is not properly before the Court.
The Court grants the City's Motion to Dismiss Douglas's request for contempt regarding the City turning off her water in July 2014. The evidence indicates that was a simple mistake that occurred because Douglas's water line was connected to the line of an unrelated third party with whom the City had a dispute. The City reconnected Douglas's water, at no cost to her, as soon as it learned of the mistake. The City's mistake does not reflect a reckless disregard for Douglas's rights and does rise to the level of contempt. Accordingly, the Court dismisses Douglas's request for contempt on that issue.
Douglas argues the City took the position that Wilborn was Douglas in prior litigation and should be judicially estopped from now arguing otherwise. For the reasons stated above the Court already has found that at all times relevant to the instant Motion the City knew Wilborn was Douglas and that Douglas was responsible for Mallery Street. Accordingly, the Court need not address Douglas's claims of estoppel.
This leaves the Court to determine whether it should dismiss Douglas's claims regarding the July 2014 letter. Because genuine issues of material fact remain regarding those claims, the Court denies the City's Motion and will set this matter for an evidentiary hearing.
At first glance, the Court's factual findings appear to suggest Douglas should prevail on her claim regarding the July 2014 letter. The Court has found the City knew, in December 2013, that Wilborn was Douglas and Douglas was responsible for Mallery Street. Additionally, in January 2014, Douglas received a discharge that included debts she owed to the City for water and sewer service. The Court found that after the discharge, Russell tried to collect payment from Douglas for an alleged water/sewer debt to the City. These findings seem to indicate that the City, through Russell, violated the discharge injunction.
But like everything else between these parties, the matter is not so simple. While Douglas received a discharge in January 2014, it is unclear if the debt referenced in the July 2014 letter was part of that discharge. Douglas's schedule and settlement reflected a debt of about $700.00. Per the July 2014 letter, though, Douglas owes the City another $287.08. The Court cannot determine whether that $278.08 was part of or apart from the discharged amount. Even if the letter did pursue a discharged debt, questions remain regarding the City's involvement in that pursuit. Further complicating things is the fact that the letter alleges a service date of December 31, 2013. That would be a post-petition debt not subject to the discharge injunction and a post-settlement debt not subject to the settlement agreement.
Accordingly, numerous questions of material fact remain regarding Douglas's claim about the July 2014 letter. Did Douglas incur new debt connected to the Mallery Street property on December 31, 2013? Did the January 2014 discharge include the $287.08 debt that the July 2014 letter sought? If that debt was part of the January 2014 discharge, how and why did Russell send the July 2014 letter? What was the City's role in that letter being sent? These questions, among others, require answers before this matter can be resolved. Once those questions are answered, the Court may then have to consider the factors relevant to determining punitive damages. Accordingly, there is much left to address regarding the July 25, 2014 letter. Thus, the Court denies the City's Motion to Dismiss as to Douglas's claim regarding the letter.
Counsel for Douglas is directed to prepare an order consistent with this Opinion and the rules regarding presentment and entry of orders.
