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#2171 signed 8-23-95 three related orders attached first order published, other three are not

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In re:

MARION N. HARRISON,

DEBTOR(S)

NO. 95-40730-13

CHAPTER 13



ORDER DENYING MOTION TO RECONSIDER

On July 27, 1995, the Court found that Bill Lytran and "Kansas Collection Agency" had violated the automatic stay imposed by 11 U.S.C.A. §362(a) when the debtor filed for bankruptcy and pursuant to §362(h), awarded the debtor $250 in attorney fees and imposed a fine of $150, payable to the Clerk of the Court, for the violation. The Court also denied a stay relief motion filed after the stay violation had occurred, but ordered the fee for filing the motion to be paid. Mr. Lytran and Kansas Collection Agency have now filed a motion to reconsider these rulings. They do not deny that after receiving notice that the debtor had filed a chapter 13 bankruptcy and after attending the first meeting of creditors and filing certain pleadings in the bankruptcy case, they filed a civil action against the debtor in the limited action division of the Shawnee County District Court in an attempt to collect from the debtor a debt that arose before she filed for bankruptcy.

Although Mr. Lytran refuses to disclose whether he is an attorney and whether "Kansas Collection Agency" is a corporation, partnership, or sole proprietorship, he continues to file pleadings as a representative of "Kansas Collection Agency." In fact, in the motion to reconsider, he declares enigmatically that "'Bill Lytran, Kansas Collection Agency' is the same as 'Bill Lytran, DBA Kansas Collection Agency, Inc.'" Thereafter proving there is much wisdom in the old adage, "A little knowledge is a dangerous thing," Mr. Lytran presents a number of unique arguments, relying on recognizable legal concepts but misapplying each. Of course, he cites no authority to support his theories, since there is none. He contends: (1) the state limited action court, not this Court, has jurisdiction to award attorney fees for the filing of the collection suit; (2) the fine (or punitive damages) awarded was excessive, apparently because it was greater than the fee for filing a bankruptcy for "any individual's corporate business"; (3) the Court should not have considered the stay relief motion on July 27 because the filing fee had not been paid and an earlier order had given additional time to correct this defect; (4) the premature denial of the stay relief motion precludes requiring the movant to pay the fee for filing the motion; (5) Mr. Lytran and Kansas Collection Agency are entitled to a jury trial before being ordered to pay punitive damages; and (6) "any statute prohibiting Bill Lytran DBA Kansas Collection Agency, Inc. from appearing in Court pro se is unconstitutional and shall be appealled [sic]." The Court will briefly address these assertions.

Under 28 U.S.C.A. §§1334 and 157 and District of Kansas Rule 705, this Court has jurisdiction to hear any disputes concerning possible violation of the automatic stay imposed by 11 U.S.C.A. §362(a). Subsection (h) of §362 authorizes the Court to award attorney fees and other actual and punitive damages for a willful violation of the stay. The state court litigation was brought in violation of the stay and is void, so the state court could not have had jurisdiction to consider the debtor's request for attorney fees. See Ellis v. Consolidated Diesel Electric Corp., 894 F.2d 371, 372-73 (10th Cir. 1990); 2 Collier on Bankruptcy, ¶362.11 (15th ed. 1994); 2 Norton Bankruptcy Law & Practice 2d, §36:4 at 36-12 (1994). The Court is not aware of any authority which limits the penalty for a stay violation to the amount the party guilty of the violation would have to pay to file for bankruptcy. In many cases, courts have imposed greater penalties than this Court did against Mr. Lytran and Kansas Collection Agency. See e.g., Mountain America Credit Union v. Skinner (In re Skinner), 917 F.2d 444 (10th Cir. 1990) ($3,500 in damages and $4,721.12 in fees and costs); Citizens Bank v. Strumpf (In re Strumpf), 37 F.3d 155 (4th Cir. 1994) ($500 in fees and costs, $375 in punitive damages, and $25 nominal damages); Cuffee v. Atlantic Business and Community Corp. (In re Atlantic Business and Community Corp.), 901 F.2d 325 (3d Cir. 1990) ($1,500 in lost advertising revenue and $5,000 in punitive damages); Knaus v. Concordia Lumber Co. (In re Knaus), 889 F.2d 773 (8th Cir. 1989) ($270 in fees and $750 in punitive damages). The Court denied the first stay relief motion Mr. Lytran filed not only because of the procedural failure to pay the filing fee, but also because it failed on the merits. Since the fee is due upon filing the motion, the Court's ruling could have no effect on the movant's liability to pay it.

The Court imposed sanctions against Mr. Lytran and Kansas Collection Agency because it concluded they were guilty of civil contempt. The Court has since discovered that a contempt fine is considered civil if it either coerces the defendant into complying with a court order or compensates the complaining party for losses caused by the contemptuous conduct, but is a criminal fine if it is unconditional and to be paid to the court. Hicks v. Feiock, 485 U.S. 624, 632 (1988); International Union, United Mine Workers v. Bagwell, 512 U.S. ___, 114 S.Ct. 2552, 129 L.Ed.2d 642, 653 (1994). In addition, 11 U.S.C.A. §362(h), the provision the Court was relying on when it imposed the fine, authorizes only sanctions payable to the party injured by the stay violation. Thus, the Court inadvertently imposed a fine for criminal contempt by directing the $150 to be paid to the Court. That order will be modified to direct the money to be paid instead to the debtor.

So far as the Court is aware, the only possible source for a jury trial right here is the United States Constitution. There is no right to a jury trial in a civil contempt proceeding. Shillitani v. United States, 384 U.S. 364, 370-71 (1966); United States v. Carroll, 567 F.2d 955, 958 (10th Cir. 1977). Even as a criminal sanction, the Court believes the fine imposed here was not so large as to invoke a constitutional right to jury trial. See United Mine Workers v. Bagwell, 129 L.Ed.2d at 658 n. 5 (petty contempt may be tried without a jury, but although the Court has not yet specified what magnitude of contempt fine may constitute a serious rather than petty sanction, a $52 million fine unquestionably qualified as serious); Muniz v. Hoffman, 422 U.S. 454, 475-77 (1975) ($10,000 fine imposed on labor union with 13,000 dues paying members qualified as petty contempt sanction). Consequently, no jury trial was required before the fine could be imposed.

Many years ago, the Tenth Circuit declared that the rule was well-established that a corporation can appear in a court of record only by an attorney at law. Flora Construction Co. v. Fireman's Fund Ins. Co., 307 F.2d 413, 414 (10th Cir. 1962), cert. denied 371 U.S. 950 (1963); see also Mid-Central/Sysco Food Servs., Inc. v. Regional Food Servs., Inc., 755 F.Supp. 367, 368 (D.Kan. 1991) (declining to adopt exception to general rule). In addition, 28 U.S.C.A. §1654 provides:

"In all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein."

The Supreme Court recently made clear that under this statute, corporations, partnerships, associations, and any other artificial entities may appear in federal courts only through a licensed attorney. Rowland v. California Men's Colony, 506 U.S. ___, 113 S.Ct. 716, 121 L.Ed.2d 656, 666-67 and n.5 (1993). A person who is not a licensed attorney and attempts to represent another person or entity in court is engaging in the unauthorized practice of law. See State ex rel. Stephan v. Williams, 246 Kan. 681, 793 P.2d 234 (1990). Thus, both case law and a statute prevent this Court from allowing Mr. Lytran to represent Kansas Collection Agency unless it is his sole proprietorship, and not a corporation, partnership, or other separate entity. While there is a constitutional right to represent oneself in court, so far as this Court is aware, there is no such right to represent another person or entity.

For these reasons, the order sanctioning Mr. Lytran and Kansas Collection Agency is hereby amended to provide that the $150 fine is to be paid to the debtor rather than to the Court. The motion to reconsider is otherwise denied.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of August, 1995.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

#2171 signed 8-23-95

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS





In re: )

MARION N. HARRISON, ) NO. 95-40730-13

) CHAPTER 13

DEBTOR(S). )

ORDER DENYING STAY RELIEF

This matter is before the Court on the second motion for stay relief filed by "Kansas Collection Agency" and signed by Bill Lytran. Filed August 7, 1995, the new motion is an exact duplicate of the first motion, filed July 17, 1995, except the first sentence states a different date on which the movant comes to petition the Court. The first motion was heard and denied on July 27, 1995. The new motion not only repeats the substance of the first, but also schedules itself to be heard on the day the first motion was heard.

Having previously denied the first motion, the Court will, of course, deny the new one. As explained to the movant at the July 27th hearing, §362(b)(1) and (11) establish exceptions to the automatic stay for criminal prosecutions, and for the presentment or giving notice of and protesting dishonor of a negotiable instrument. While either exception can be relevant when a debtor has written a bad check, neither includes filing a civil lawsuit to try to collect on the check.

IT IS HEREBY ORDERED that the motion for stay relief is denied.

Dated at Topeka, Kansas, this _____ day of August, 1995.











__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

#2171 signed 8-31-95

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS





In re: )

MARION N. HARRISON, ) NO. 95-40730-13

) CHAPTER 13

DEBTOR(S). )

ORDER DENYING MOTION TO CORRECT INADVERTENT ERROR AND

IMPOSING RESTRICTIONS ON BILL LYTRAN'S FILING OF PLEADINGS

This matter is once again before the Court on a motion filed by Bill Lytran for Kansas Collection Agency of Topeka, Kansas. Filed August 31, 1995, this motion is entitled, "Motion to Correct Inadvertent Error." It seeks to correct a problem with the second motion for stay relief which Mr. Lytran filed in this case, and asks the Court to allow the new motion to toll the time to appeal "various orders" the Court had previously entered.

The Court has already denied the stay relief motion which Mr. Lytran now seeks to correct. Although the Court pointed out the error Mr. Lytran made, the motion was denied on its merits, not due to the mistake. To allow the correction now would be meaningless, so this part of the motion will be denied.

Mr. Lytran has suggested no basis for tolling the time to appeal any of the Court's orders, nor has he identified what orders he wants more time to appeal. Consequently, this part of the motion will be denied as well.

Mr. Lytran has refused to inform the Court whether he is an attorney. However, he has not included a supreme court registration number or its equivalent on any of his pleadings even though District of Kansas Bankruptcy Rule 9004.1(C) requires attorneys to include this information on all pleadings they file with this Court. The Court therefore assumes Mr. Lytran is not a licensed attorney. Mr. Lytran has also refused to inform the Court whether "Kansas Collection Agency" is a corporation. A call to the Corporate Division of the Office of the Kansas Secretary of State has revealed that a "Bill Lytran," located at an address in Topeka, is the registered agent for a corporation named "Kansas Collection Agency, Inc." The Court concludes it is possible, if not likely, that Mr. Lytran has been filing pleadings on behalf of a corporation in violation of District of Kansas Bankruptcy Rule 9010.1(B), which permits corporations to appear and participate before the Court only through an attorney in matters such as contempt and stay relief hearings. See also Rowland v. California Men's Colony, 506 U.S. ___, 113 S.Ct. 716, 121 L.Ed.2d 656, 666-67 and n.5 (1993) (corporations and other artificial entities may appear in federal courts only through a licensed attorney).

For these reasons, Mr. Lytran's latest motion is denied. The Clerk is hereby directed to lodge--not file--any pleadings he attempts to file on behalf of Kansas Collection Agency or any other entity in this or any other case pending before this Court, and to bring the pleading to the Court forthwith for review. This will continue until Mr. Lytran appears before the Court and swears under oath whether he is an attorney and whether the "Kansas Collection Agency" he has listed on his pleadings is a corporation or other type of entity. Mr. Lytran is hereby warned that he risks sanctions if he persists in filing pleadings for anyone but himself.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of August, 1995.















__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE





IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS











In re: )

)

MARION N. HARRISON, ) CASE NO. 95-40730-13

) CHAPTER 13

DEBTOR. )



ORDER DENYING MOTION TO SET ASIDE AND DIRECTING THE CLERK OF

THE COURT TO ACCEPT IN THIS CASE NO FURTHER PLEADINGS FROM BILL

LYTRAN EXCEPT THOSE REQUIRED TO APPEAL SANCTIONS AGAINST HIM



On November 9, 1995, Bill Lytran, purporting to act under a power of attorney from Kansas Collection Agency, filed a pleading captioned "Motion to Set Aside Order Issued in Response to Motion to Reconsider Order Sanctions [sic] Bill Lytran and Kansas Collection Agency." In the motion, Mr. Lytran questions the determination that he cannot represent Kansas Collection Agency before this Court unless either the company is a sole proprietorship or Mr. Lytran is an attorney authorized to practice law before the United States Courts in the District of Kansas. Mr. Lytran appears to believe a person acting as an attorney-in-fact for a company under a power of attorney is the same as an attorney-at-law. The Court does not. The motion is denied.

Since Mr. Lytran is apparently not authorized to practice law before the federal courts in the District of Kansas and has no interest in this case except as a representative of Kansas Collection Agency, and since Kansas Collection Agency is apparently not a sole proprietorship, the Clerk of the Court is directed not to accept for filing in this case any further pleadings signed by Bill Lytran except those necessary to appeal the sanctions the Court imposed on him.

IT IS THEREFORE ORDERED that the "Motion To Set Aside Order Issued in Response to Motion to Reconsider Order Sanctions [sic] Bill Lytran and Kansas Collection Agency" is denied.

IT IS FURTHER ORDERED that except for pleadings relating to an appeal of the sanctions imposed upon Mr. Lytran, the Clerk of the Court shall accept for filing in this case no further pleadings signed by Bill Lytran on behalf of himself or Kansas Collection Agency.

IT IS SO ORDERED.

Dated at Topeka, Kansas this 14th day of November, 1995.









______________________________________________

THE HONORABLE JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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