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BAP Holds That Failure to Withdraw an Arrest Warrant that was Issued Pre-Petition is Not a Violation of the Automatic Stay

By Karl Johnson posted 07-22-2019 02:45 PM

  
​BANKRUPTCY BULLETIN
Editors-in-Chief
Karl Johnson, Briggs and Morgan, P.A.
Jeffrey Klobucar, Bassford Remele, P.A.

 Contributing Editor: Karl Johnson, Briggs and Morgan, P.A.
https://higherlogicdownload.s3.amazonaws.com/MNBAR/UploadedImages/020f5c45-7094-4863-9eb6-668cf5628291/BAP___Edwards_v__City_of_Ferguson.pdf

            In Edwards v. City of Ferguson, 601 B.R. 660 (BAP 8th Cir. 2019), the BAP held that a city does not violate the automatic stay by not taking post-petition actions to rescind an arrest warrant and not issuing a compliance letter to assist in reinstatement of a debtor’s driver’s license.

            The debtor was given a speeding ticket six years prior to filing her voluntary petition under chapter 13. After she failed to show up for the initial court date, an arrest warrant was issued. She then pleaded guilty to speeding, but never paid the fine. Non-payment of the fine eventually resulted in her driver’s license not being renewed. About eight months before the petition date, the city re-issued the arrest warrant, but did not take any affirmative action to enforce the warrant or collect the fine. The day after filing the bankruptcy petition, the debtor’s attorney notified the city of the filing and requested that the city release the arrest warrant and issue a compliance letter to reinstate the debtor’s driver’s license. In response, the city’s counsel suggested that the debtor file a motion with the Ferguson Municipal court. Instead, the debtor filed a complaint to initiate an adversary proceeding alleging violation of the automatic stay of § 362(a) and unfair discrimination under § 525. The parties filed cross motions for summary judgment. The bankruptcy court granted the city’s motion and denied the debtor’s motion.

            The debtor appealed only the ruling on the automatic stay, arguing that inaction by itself constitutes a violation of the automatic stay. The BAP noted that there are situations where inaction is a violation of the automatic stay, such as failure to stop wage garnishment that was initiated pre-petition. But, the BAP noted that the existence of an outstanding arrest warrant does not mean that the city will try to enforce it.

            The BAP also held that nothing in the Bankruptcy Code compels the city to issue a compliance letter, especially when such a letter would be false because the debtor admits that she has not complied with the fine. Furthermore, the BAP noted that the debtor did not provide any evidence that the State of Missouri refused to issue her a driver’s license based on the unpaid fine and, furthermore, the State of Missouri was not even a party to the adversary proceeding.  

            Finally, the debtor argued that the city’s attorney’s response to the debtor’s post-petition request was somehow a violation of the automatic stay. The BAP held that a response to an inquiry is not an attempt to collect a debt and therefore not a violation of the automatic stay.



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