William D. Houghton and Jesse Houghton v. Foremost Financial Services Corp., Formerly Known As Minnehoma Financial Company, A Corporation, 724 F.2d 112, 10th Cir. (1983)

724 F.
2d 112
William D. HOUGHTON and Jesse Houghton, PlaintiffsAppellants,

v.
FOREMOST FINANCIAL SERVICES CORP., formerly
known as
Minnehoma Financial Company, a corporation,
Defendant-Appellee.
No. 82-2612.
United States Court of Appeals,

Tenth Circuit.
Dec. 30, 1983.
Michael T. Braswell of Braswell & McKinney, Oklahoma City, Okl., for

plaintiffs-appellants.
John B. Hayes of Looney, Nichols, Johnson & Hayes, Oklahoma City,
Okl., for defendant-appellee.
Before SETH, Chief Judge, and HOLLOWAY and SEYMOUR, Circuit
Judges.
SEYMOUR, Circuit Judge.
After examining the briefs and the appellate record, this three-judge panel has
determined unanimously that oral argument would not be of material assistance
in the determination of this appeal. See Fed.R.App.P. 34(a); Tenth Cir.R. 10(e).
The cause is therefore ordered submitted without oral argument.
William and Jesse Houghton, husband and wife, brought this diversity suit
applying Oklahoma law against Foremost Financial Services (Foremost). The
Houghtons sought damages resulting from Mr. Houghton's arrest and detention
for contempt arising out of a state court replevin action initiated by Foremost.
The district court construed the Houghtons' complaint to allege causes of action
for false imprisonment, malicious prosecution, and abuse of process. The
parties filed cross motions for summary judgment, and the district court granted
Foremost's motion. We affirm in part and reverse in part.
3
The undisputed facts, as set forth in the district court order, are as follows:
4 June, 1973, Tommy Wells purchased a mobile home with funds borrowed from
"In
Foremost Financial Services (formerly known as Minnehoma Financial Co.). At that
time, Foremost obtained a purchase money security agreement concerning the
mobile home and a promissory note. The mobile home was subsequently sold by
Wells to an individual who assumed Wells' note and mortgage to Foremost.
Thereafter, the mobile home was sold to William D. Houghton and Jesse Houghton,
plaintiffs in this action. The Houghtons also assumed the original note and mortgage
to Foremost Financial Services.
5
"On March 1, 1978, William Houghton filed a voluntary petition in bankruptcy.

(Jesse Houghton did not file for bankruptcy). In his petition, William Houghton
listed Foremost Financial Services as a secured creditor with a security interest
in his mobile home. However, Houghton failed to list the mobile home as an
asset. Thereafter, on March 4, 1978, Houghton was discharged in bankruptcy
and the case was closed without any disposition of the mobile home.
"On July 24, 1980, Foremost Financial Services filed an action in replevin
against William D. Houghton and Jesse Houghton seeking possession of the
mobile home, or in the alternative that the mobile home could not be located,
money damages for its reasonable value. Foremost obtained a default judgment
and caused an order to be issued directing the Houghtons to appear for
examination regarding the mobile home. When the Houghtons failed to appear,
the court, upon application, ordered them to appear and show cause why they
should not be cited for contempt. The Houghtons also failed to appear at the
'show cause' hearing and a bench warrant was issued for their arrest. Only Mr.
Houghton was arrested and he was released after posting bond. At that time, he
was directed to appear at a subsequent hearing regarding the issue of his
contempt. At the subsequent hearing, Mr. Houghton was exonerated of the
contempt charge when Foremost's counsel failed to appear."
Rec., vol. I, at 113-14.
All of the Houghtons' claims are based on their assertion that the state court
replevin action was actually an improper attempt to recover money owing on a
personal liability that had been discharged in bankruptcy. The district court
rejected this contention, stating that "[t]he proceeding before the state court
was nothing more than an action in replevin." Id. at 115. On appeal, the
Houghtons assert that whether Foremost instituted the state court proceedings
to recover possession of the mobile home or to collect on a discharged personal
debt is a disputed issue of material fact, and that summary judgment was
therefore improper. For the reasons set out below, we conclude that the record
reveals a dispute as to this fact and that it is material to Mr. Houghton's causes
of action for false imprisonment and abuse of process.
9
Summary judgment is proper when "there is no genuine issue as to any material

fact and ... the moving party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c). In reviewing a grant of summary judgment, we must
construe the pleadings and documents liberally in favor of the party against
whom the motion is granted. Mustang Fuel Corp. v. Youngstown Sheet & Tube
Co., 516 F.2d 33, 36 (10th Cir.1975). Factual inferences tending to show triable
issues must be considered in the light most favorable to the existence of those
issues. Id. Summary judgment should not be granted when different inferences
can be drawn from conflicting evidence, particularly when credibility is at
issue. Romero v. Union Pacific Railroad, 615 F.2d 1303, 1309 (10th Cir.1980).
The fact that both parties have moved for summary judgment does not permit
entry of summary judgment if disputes remain as to material facts. Harrison
Western Corp. v. Gulf Oil Corp., 662 F.2d 690, 692 (10th Cir.1981).
10
In this case, a dispute exists as to whether Foremost was aware of the location
of the mobile home when the replevin action was begun in state court.
Foremost submitted an affidavit by Bruce McClellan, its attorney in the replevin
action. McClellan stated that the sole purpose of the state suit had been to
recover possession of the mobile home, and that prior to the suit Foremost had
been unable to locate the trailer. However, the Houghtons testified in their
depositions that they had moved out of the trailer about the time of the
bankruptcy, and that they had written to Foremost several times after the
bankruptcy proceeding requesting Foremost to pick up the mobile home. The
Houghtons further stated that someone had visited them in an effort to
repossess the mobile home and they had given directions to it. They also
testified that Foremost had written letters addressed to them when they were
living in the mobile home.1
11
This disputed fact issue is material to the tort claims asserted in the case. The
order in the replevin action directed the Houghton's "to appear and answer
concerning the whereabouts" of the mobile home. Rec., vol. I, at 44. If
Foremost knew the location of the trailer, the purpose of the proceeding may
have been to attempt to enforce the alternative money judgment provided by
statute rather than merely to locate the trailer. See Okla.Stat. tit. 12, Sec. 1580
(1981).2 We must therefore consider the Houghtons' allegations that the

replevin action was an improper attempt to collect on a monetary obligation
discharged in bankruptcy.
12
Section 14f of the Bankruptcy Act provides that:
13
"An order of discharge shall--
14
(1) declare that any judgment theretofore or thereafter obtained in any other
court is null and void as a determination of the personal liability of the bankrupt
with respect to any of the following: (a) debts not excepted from the discharge
under subdivision (a) of section 35 of this title; (b) debts discharged under
paragraph (2) of subdivision (c) of section 35 of this title; and (c) debts
determined to be discharged under paragraph (3) of subdivision (c) of section
35 of this title; and
15
(2) enjoin all creditors whose debts are discharged from thereafter instituting or
continuing any action or employing any process to collect such debts as
personal liabilities of the bankrupt."
16
11 U.S.C. Sec. 32(f) (1976), repealed by Bankruptcy Reform Act of 1978,

Pub.L. 95-598 Sec. 401(a), 92 Stat. 2682.3 This provision was added to the
Bankruptcy Act in 1970 "to prevent creditors from instituting state court actions
in the hope that the bankrupt would ignore the proceedings based on a
misplaced reliance on the discharge or due to lack of funds to defend." Wood v.
Fiedler, 548 F.2d 216, 219 (8th Cir.1977).
17
"[C]reditors
received default judgments against discharged debtors because the
debtors mistakenly relied upon their discharge and thought they did not have to act,
because they did not know what they should do, because they could not afford
another lawyer to represent them in state court after hiring one to represent them in
bankruptcy court, or because service was never had on the debtor but was
fraudulently signed and returned (dubbed 'sewer service')."
18
Ryan v. Ohio Edison Co., 611 F.2d 1170, 1173-74 (6th Cir.1979). The purpose
of the legislation was to end harassment of discharged debtors by prohibiting
creditors from using the state courts to attempt to collect discharged debts. Id.
at 1174; Wood, 548 F.2d at 219. If the state replevin action by Foremost was
such a suit, it was barred by section 14f.
19
The lawfulness of the replevin suit is material to the tort claims of false
imprisonment and abuse of process. Under Oklahoma law, false imprisonment

is defined as the unlawful restraint of an individual against his will. S.H. Kress
& Co. v. Bradshaw, 186 Okl. 588, 99 P.2d 508, 511 (1940). The district court
in this case recognized the general principle that "an arrest, even for contempt
of court, is unlawful if it is based on a void judgment." Rec., vol. I, at 115. Cf.
Miller v. Stinnett, 257 F.2d 910 (10th Cir.1958) (Plaintiff stated claim for false
imprisonment based on arrest and detention under ordinance valid on its face
but invalid and inapplicable in fact.). Section 14f(1) of the Bankruptcy Act
specifically provides that any judgment rendered subsequent to an order of
discharge is "null and void as a determination of the personal liability of the
bankrupt." Thus, if the contempt citation and arrest were an attempt by
Foremost to collect a void money judgment, Mr. Houghton has a cause of
action for false imprisonment.4 Foremost's disputed motive in the state court
proceedings is material to this claim, and the summary judgment against Mr.
Houghton on the false imprisonment issue must be reversed. Since Mrs.
Houghton was not arrested, however, summary judgment against her on this
issue was appropriate.
20
Oklahoma also recognizes a cause of action arising from abuse of process. See
Neil v. Pennsylvania Life Insurance Co., 474 P.2d 961, 965 (Okl.1970). Abuse
of process occurs when legal process is used for an improper purpose, to
accomplish an end not lawfully obtainable, or to compel someone to do some
collateral thing he could not legally be compelled to do. Id.; W. Prosser, Law of
Torts Sec. 121 (4th ed. 1971). The elements of this tort are generally articulated
as an illegal or improper use of the process for an ulterior or improper purpose
with resulting damage to the plaintiff. Prosser, supra; see also Tappen v. Ager,
599 F.2d 376, 379-80 (10th Cir.1979). Because a dispute exists as to whether
Foremost instituted the replevin for the unlawful purpose of collecting a
discharged debt, summary judgment against Mr. Houghton was improper on
the abuse of process claim. Only William Houghton was discharged in
bankruptcy, however. Accordingly, Mrs. Houghton has no abuse of process
claim and the summary judgment against her was proper.
21
The Houghtons' third claim is for malicious prosecution. Under Oklahoma law,
the elements of this cause of action are "(1) the bringing of the original action
by the defendant; (2) its successful termination in plaintiff's favor; (3) want of
probable cause to join the plaintiff; (4) malice; and (5) damages." Young v.
First State Bank, 628 P.2d 707, 709 (Okl.1981) (emphasis added). The district
court based its grant of summary judgment on the undisputed fact that the
underlying state court action has not been terminated in the Houghtons' favor.
Given the Houghtons' failure to establish this essential element, summary
judgment on this claim was correctly granted.
22
The judgment against Mr. Houghton on the false imprisonment and abuse of
process claims is reversed. The judgment against Mr. Houghton on the
malicious prosecution claim and against Mrs. Houghton on all claims is
affirmed. The case is remanded to the district court for further proceedings.
The mobile home was destroyed by fire sometime in 1980, after standing
vacant for over a year
The state statute provides:

"In an action to recover the possession of personal property, judgment for the
plaintiff may be for the possession, or for the recovery of possession, or the
value thereof in case a delivery cannot be had, and of damages for the
detention.... The judgment rendered in favor of the prevailing party in such
action may include a reasonable attorney fee to be set by the court, to be taxed
and collected as costs."
Okla.Stat. tit. 12, Sec. 1580 (1981).
In its replevin petition, Foremost sought "judgment against defendants for
possession of the personal property hereinabove described, or if the same
cannot be found, its reasonable value...." Rec., vol. I at 34. The journal entry of
judgment in the replevin action provides that
"plaintiff [Foremost] have and recover of and from defendant [the Houghtons],
judgment for the immediate possession of the personal property hereinabove
described, or if the same may not be had, for reasonable value which is found to
be $2000.00, together with $350.00 attorneys' fees, accrued costs in the sum of
$66.00 and all accruing costs."
Id. at 42-43.
As support for its assertion that it was only seeking replevin, Foremost points
out that it did not move for and receive a money judgment in state court after
showing that delivery could not be had. However, the judgment on its face
provides an alternative money judgment if delivery is impossible, as it was in
this case. Our perusal of the Oklahoma statutes and case law reveals no
procedure or requirement under which the prevailing party must return to court
and obtain a second judgment if delivery cannot be obtained. Indeed it appears
that, under Oklahoma law, when an alternative judgment has been rendered in a
replevin action, upon the losing party's failure to make delivery he becomes
liable on the alternative judgment for value. See Brook v. Cullimore, 436 P.2d
32, 34 (Okl.1967); Hyre v. Pratt, 382 P.2d 18, 22 (Okl.1963); Wortham v.

Mathews, 207 Okl. 466, 250 P.2d 428 (1952). However, since we are
remanding this case for further proceedings, the district court may wish to
consider additional argument and authorities on this issue should the parties
submit them.
3
The Bankruptcy Act was repealed effective October 1, 1979. See Bankruptcy
Reform Act of 1978, Pub.L. 95-598, Sec. 401(a), 92 Stat. 2682. However, "[a]
case commenced under the Bankruptcy Act, and all matters and proceedings in
or relating to any such case, shall be conducted and determined under such
Act." Id. at Sec. 403(a), 92 Stat. 2683
The Houghtons also contend that the state court judgment is void because they
were not properly served with summons. However, in a collateral attack on a
judgment for lack of jurisdiction, the "judgment is not void in the legal sense
for want of jurisdiction unless the lack of jurisdiction appears in the record."
Barton v. Alpine Investments, Inc., 596 P.2d 532, 534 (Okl.1979), cert. denied,
444 U.S. 1031, 100 S.Ct. 701, 62 L.Ed.2d 667 (1980). The record in this case
reflects that notice was properly served on a family member over fifteen years
of age. See Okla.Stat. tit. 12, Sec. 169 (1981). Accordingly, we reject the
Houghtons' argument on this issue

William D. Houghton and Jesse Houghton v. Foremost Financial Services Corp., Formerly Known As Minnehoma Financial Company, A Corporation, 724 F.2d 112, 10th Cir. (1983)

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724 F.

William D. HOUGHTON and Jesse Houghton, PlaintiffsAppellants,

United States Court of Appeals,

Michael T. Braswell of Braswell & McKinney, Oklahoma City, Okl., for

"On March 1, 1978, William Houghton filed a voluntary petition in bankruptcy.

Rec., vol. I, at 113-14.

Summary judgment is proper when "there is no genuine issue as to any material

(1981).2 We must therefore consider the Houghtons' allegations that the

Section 14f of the Bankruptcy Act provides that:

"An order of discharge shall--

11 U.S.C. Sec. 32(f) (1976), repealed by Bankruptcy Reform Act of 1978,

imprisonment and abuse of process. Under Oklahoma law, false imprisonment

The state statute provides:

32, 34 (Okl.1967); Hyre v. Pratt, 382 P.2d 18, 22 (Okl.1963); Wortham v.

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