Opinion ID: 1692877
Heading Depth: 2
Heading Rank: 2

Heading: Should Foremost be Subjected to Liability?

Text: As noted in Section I(A)(3) of this opinion, the circuit judge found that: Because the [Underwoods'] claim for damages is without merit as to the ultimate taking of their property, due to [Foremost's] proven entitlement to same, the sole remaining issue ... is whether [Foremost's unconstitutional] taking of the property... resulted in damage to the [Underwoods] for which [Foremost] is responsible. It is apparent that... [Foremost] properly proceeded to take immediate possession of the [Underwoods'] property according to the provisions of Miss. Code Ann. § 11-37-101 (Supp. 1987), a law [Foremost] was entitled to assume was constitutional. Vol. I, at 141-42 (from the circuit judge's Memorandum Opinion and Order). In short, Foremost was not subjected to liability for damages simply because it acted pursuant to a presumptively-valid (albeit unconstitutional) statute.
The circuit judge's decision concerning liability disregards applicable and established constitutional law. For example, in Guzman v. Western State Bank of Devils Lake, 540 F.2d 948 (8th Cir.1976), the debtors (purchasers of a mobile home under security agreement and retail installment contract) sued the creditor for compensatory and punitive damages arising from an unconstitutional ex parte seizure of their home. The home had been seized: (1) after the debtors' account became delinquent, and (2) after the creditor complied with a presumptively-valid state statute which provided for seizure prior to notification and a hearing. (Notably, the statute involved in the Guzman case was nearly identical to the one involved in the case sub judice. ) A jury ultimately found for the debtors, and awarded $9,365.23 in compensatory damages and $30,000 in punitive damages. The federal district judge, however, granted the creditor's j.n.o.v. motion after concluding that the creditor seized the debtors' mobile home in good-faith reliance on a presumptively-valid (albeit unconstitutional) state statute. The debtors appealed. On appeal, the creditor maintained: (1) that the jury improperly awarded damages; (2) that it should not be held liable for damages simply because it was acting in accord with [statutory] provisions which [it] believed were constitutional; and (3) therefore, the district court properly granted its j.n.o.v. motion. Id. at 951. The Eighth Circuit Court of Appeals disagreed: A [creditor] may feel [it] is pursuing [its] legal rights but, where [its] acts are oppressive and in reckless disregard of another['s] constitutional rights, [it] can still be [held] liable. Id. (citing 42 U.S.C. § 1983) (emphasis in original). The Eighth Circuit noted that the applicable test is: [W]here a plaintiff asserts denial of constitutional rights ..., a defendant's claim of good faith reliance on a presumptively valid statute must be considered in light of not only the sincerity in his belief that what he was doing was right, but the reasonableness of his actions in the circumstances. Id. at 952 (emphasis in original) (citing Stephenson v. Gaskins, 531 F.2d 765 (5th Cir.1976); [3] Laverne v. Corning, 522 F.2d 1144 (2d Cir.1975)); see also McElveen v. County of Prince William, 725 F.2d 954, 957 (4th Cir.1984) (measure of good faith [involves] both objective and subjective elements). The Court added that [w]here it is patently obvious that [the creditor's] conduct will oppressively harm [the debtor] and [it] acts with reckless disregard of the [debtor's] constitutional rights, a submissible case is made. Id. The Court reinstated the jury verdict  rationalizing that reasonable-minded jurors could have found that the creditor knew or should have known [its] conduct would deny the [debtors'] basic constitutional rights and cause them injury. [4] The principles enunciated in Guzman remain valid. See, e.g., Rheuport v. Ferguson, 819 F.2d 1459, 1465 (8th Cir.1987) ([M]any cases have imposed liability on individuals who followed unconstitutional state procedures.); Messick v. Leavins, 811 F.2d 1439, 1443 (11th Cir.1987) (Th[e] failure to provide any predeprivation process is actionable under § 1983.); see Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420, 428 (1981) (Two elements of a § 1983 action include: (1) The defendant must have been acting under color of state law; and (2) The defendant's conduct must have deprived a person of rights ... secured by the Constitution.), and its progeny; see also Mann v. City of Tucson, Dep't of Police, 782 F.2d 790 (9th Cir.1986); Cobb v. Georgia Power Co., 757 F.2d 1248 (11th Cir.1985); Wolf-Lillie v. Sonquist, 699 F.2d 864 (7th Cir.1983).
In the case sub judice, the circuit judge did not comply with applicable law in deciding whether Foremost should be subjected to liability for injurious violation of the Underwoods' constitutional right to due process. An evidentiary hearing should have been held, and Foremost's claim of good-faith reliance on a presumptively-valid statute should have been considered in light of not only the sincerity in its belief that it was acting properly, but the reasonableness of its actions under the circumstances. Based on the skeletal facts reflected in the record, and in light of entrenched federal and state constitutional law of which creditors should be well aware, a fact-finder conceivably could conclude that Foremost's surprise seizure of the Underwoods' home and its contents was, under the circumstances, unreasonable and compensable. See, e.g., Donovan v. Mayor & Council of Vicksburg, 29 Miss. 247 (1855) (probably the seminal Mississippi case construing state constitution as prohibiting laws which permit deprivation of property without notice or hearing); see also Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), and their progeny; Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982). [5] Notably, the record evinces no explanation for the necessity of an immediate seizure. In cases where pre-seizure process is feasible, compliance with Miss. Code Ann. § 11-37-131 (Supp. 1989) is required. See Al-Mustafa Irshad v. Spann, 543 F. Supp. 922, 926 (E.D.Va. 1982) (In determining whether an individual or entity should be held liable for acting under color of an unconstitutional law, one factor courts must consider is whether it was impracticable [or] impossible to provide a meaningful hearing before deprivation.) (quoting Parratt, supra ); Messick, 811 F.2d at 1442 (courts must decide necessity of quick action or infeasibility of predeprivation process) (citing Parratt, supra, and Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982)); Rittenhouse v. Dekalb County, 764 F.2d 1451, 1455 (11th Cir.1985) ([W]here a deprivation occurs pursuant to an established state procedure, pre-deprivation process is ordinarily feasible.).