No. 88-097 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

VALLEY UNIT CORPORATION, a Montana 

corporation, 

Petitioners, 

-vsCITY OF BOZEMAN, MONTANA, a municipal 

corporation, the City Commission of 

and for the City of Bozeman, Montana, 

Namely, KENNETH WEAVER, MARY VANTHULL, 

ANNE ANDERSON and JUDY MATHRE, 

Respondents, 

and 

D.A. DAVIDSON & CO., INC., a Montana 

corporation, 

Intervenor, 

-vsVIRGIL JAHNKE, PHYLLIS JAHNKE and 

VALLEY UNIT CORPORATION, a Montana 

corporation, 

Defendants in Intervention. 

ORIGINAL PROCEEDING: 

COUNSEL OF RECORD: 

For Petitioners: 

Kelly M. Hogan, Bozeman, Montana 

For Respondents: 

Bruce Becker, City Attorney, Bozeman, Montana 

J. Robert Planalp, Bozeman, Montana 

Bruce A. MacKenzie, Bozeman, Montana, (D.A. Davidson) 

Submitted on Briefs: March 31, 1988 

Decided: May 10, 1988 

MAY 1 0 1988 Filed:- 

& *,- # 

Clerk 
Mr. Justice Wil.liam E. Hunt, Sr., delivered the Opinion of 

the Court. 

This is an application for a writ of certiorari for 

which Virgil and Phyllis Jahnke d/b/a Valley Unit Corp. seek 

review of a contempt order of the District Court, Eighteenth 

Judicial District, Gallatin County against Virgil Jahnke. 

The petition for the writ of certiorari is denied. 

In 1982, Valley Unit Corp. sued the City of Bozeman (the 

City) and its commissioners in the District Court, contesting 

the procedures the City used to assess special improvement 

district (SID) bonds on Valley Unit's development project. 

In the court order dated September 6, 1985, based on the 

settlement of this matter, the City was directed to relevy 

and reassess the SIDs and Valley Unit was ordered to deposit 

a letter of credit from a national bank with the City by 

October 15, 1985. Virgil Jahnke had represented that he was 

assured a letter of credit from the U.S. National Bank of 

Oregon. The Bank, however, claims no knowledge of any such 

promise from them to him and no credit was extended by them 

to him. 

On September 25, 1986, the City filed a petition 

alleging Valley Unit had failed to comply with the September 

1985 order and calling for punishment for contempt of court 

against Virgil Jahnke, principal shareholder and director of 

Valley Unit. Specifically, the City alleged that Valley Unit 

had failed to provide the letter of credit and had failed to 

pay certain assessments delineated in the court's order of 

settlement. This petition was supported by an affidavit. At 

a subsequent hearing, Jahnke was found in contempt for not 

producing certain financial records pursuant to an unrelated 

subpoena duces tecum and was sentenced to 48 hours in the 
Gallatin County Detention Center. This citation is not being 

challenged. No action was taken on the allegations in the 

City's petition. 

In late 1986, Valley Unit filed for a Chapter 11 

bankruptcy which automatically stayed the contempt 

proceeding. The City filed a motion to show cause November 

24, 1986. The City renewed its motion for contempt in April, 

1987. A hearing was held and by order dated February 8, 

1988, Virgil Jahnke was found in contempt of the court's 

order of settlement for failing to produce the letter of 

credit from a national bank. Jahnke was sentenced to five 

days in jail. Jahnke seeks review of this charge by way of a 

writ of certiorari. 

With few exceptions, a contempt of court order can only 

be reviewed upon a writ of certiorari. Section 3-1-523, MCA. 

There are three requisites that must be satisfied before a 

writ of certiorari may be issued: 1) the inferior court 

lacked or exceeded its jurisdiction; 2) a right to appeal 

from the disputed order does not exist; and, 3) there lacks 

any other plain, speedy and adequate remedy. Section 

27-25-102, MCA. State v. McAllister (Mont. 1985), 708 P.2d 

239, 241, 42 St.Rep. 1515, 1517. All three of these 

requirements must be met. Failure to meet any one requires 

this Court to deny the petition. 

A judgment of contempt is final and conclusive. Since 

the only review available for a contempt proceeding is, bv 

statute, through a writ of certiorari, the second and third 

requirements of § 27-25-102, MCA are fulfilled. We limit our 

inquiry, then, to determining whether the District Court 

lacked or exceeded its jurisdiction when it issued its 

February 8, 1988 order of contempt. 

The thrust of appellant's argument is that because the 

City's motion to show cause was not accompanied by a.n 
affidavit as required by 5 3-1-512, MCA, the court could not 

obtain jurisdiction. The statute reads: 

When the contempt is not committed in the immediate 

view and presence of the court or judge at 

chambers, an affidavit of the facts constituting 

the contempt or a statement of the facts by the 

referees or arbitrators or other judicial officer 

shall be presented to the court or judge. 

The court initially obtained jurisdiction of the matter 

when the City filed its petition for contempt with an 

accompanying affidavit in full compliance with the statute. 

Implicit in appellant's argument is the contention that the 

District Court somehow lost jurisdiction of the contempt 

matter after the City's petition calling for contempt was 

initially filed. Although the Jahnkes filed for bankruptcy 

after the court had obtained jurisdiction, it is well settled 

that a bankruptcy proceeding does not divest a state court of 

jurisdiction over the matter; it only stays or suspends the 

proceedings. David v. Hooker, Ltd. (9th Cir. 1977), 560 F.2d 

412, 418; In re Clowser (E.D. Va. 1984), 39 Bankr. 883, 884; 

In re Related Asbestos Cases (N.D. Cal. 1982), 23 Bankr. 523, 

526. Neither does a party's filing of a bankruptcy petition 

constitute a dismissal of the state court action. David, 560 

F. 2d at 418; Stewart v. A. G. Edwards & Sons, Inc. (D. S.C. 

1987), 74 Bankr. 26, 27. 

The City's petition for contempt had not yet been ruled 

on when the Jahnkes filed their petition for bankruptcy. The 

proceedings were then stayed. Approximately one week after 

the bankruptcy petition had been dismissed the City renewed 

its efforts in the contempt matter by filing a motion to show 

cause why Virgil Jahnke should not be held in contempt for 

failing to obey the court's order. The basis of this motion 

was that Jahnke had still not produced a letter of credit as 

ordered by the District Court. This motion was not 
accompanied by an affidavit. The court, however, already had 

in its possession an affidavit concerning the contempt. The 

City's motion did not inject into the suit any matters that 

were not already contained in its earlier petition. Another 

affidavit was unnecessary. 

We hold that the District Court was within its 

jurisdiction. 

The petition for writ of c 

We Concur: 

4 Chief' Justice A 

/ Justices