Court Opinion

ID: 995567
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:39:12.348996+00
Date Added: 2024-06-11T15:37:33.088766
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MICHAEL VITO SATTANE, SR., a/k/a
Mike Sattane,
Plaintiff-Appellant,

v.

GENEVIEVE M. POWELL,                                                No. 97-2685
Defendant-Appellee,

and

JOHN TIMOTHY STACK, Trustee,
Party in Interest.

Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Joseph F. Anderson, Jr., District Judge.
(CA-97-2903-3-17, BK-96-77005, AP-97-80049)

Submitted: June 30, 1998

Decided: July 14, 1998

Before MURNAGHAN, NIEMEYER, and HAMILTON,
Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Joseph H. Wachter, Myrtle Beach, South Carolina, for Appellant.
James Daniel Cooper, Jr., COOPER, COFFAS & MEGNA, P.A.,
Columbia, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Michael Vito Sattane, Sr., appeals from the district court's order
affirming the bankruptcy court's order allowing as an unsecured
claim in Sattane's bankruptcy case, Genevieve Powell's claim in the
amount of $12,500, and declining to address Sattane's challenge to
the state court's contempt orders. For the reasons that follow, we
affirm.

Powell filed a proof of claim in Sattane's Chapter 11 bankruptcy
case, asserting her claim for $12,500, which was the balance due on
a state court judgment entered July 17, 1984. At the time the judg-
ment was entered, Sattane owned real property in South Carolina, and
the judgment constituted a lien on the property. Sattane filed an
adversary action in his bankruptcy case, contending that the lien was
no longer valid or enforceable, and therefore Powell's claim should
not be allowed.

In her answer, Powell asserted that she and Sattane had entered into
three settlement agreements. All of the settlement agreements pro-
vided that in exchange for Powell's agreement not to place Sattane
under oath concerning his assets and appoint a receiver to take control
of his assets, Sattane agreed to stated terms of repayment of the debt,
subject to the contempt powers of the court. All three of the settle-
ment agreements were approved by the state court. Sattane did not
dispute the provision making the agreement subject to the court's con-
tempt powers and he did not appeal from the orders approving the set-
tlement agreements.

When Sattane failed to make the payments agreed upon and
approved by the state court's "Order Approving Settlement Agree-
ments," the state court judge found Sattane in contempt for his failure
to abide by the court's order. The court ordered Sattane to pay certain

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sums or serve ninety days in the county jail. Several years later, Sat-
tane was again found in contempt of court for his failure to comply
with the repayment schedule set forth in the court's order. The state
court sentenced Sattane to ninety days in jail and provided that he
could purge himself of contempt by paying the balance of the debt
($11,500) plus $1000 attorney's fees. Sattane did not appeal from
either contempt order.

Sattane's adversary proceeding in the bankruptcy court also chal-
lenged the state court's contempt orders, which required him to pay
the balance of the debt or serve ninety days in the county jail. He
asserted that the contempt orders were in violation of the South Caro-
lina Constitution, which prohibited the imprisonment of a contract
debtor for failing to pay. In her answer, Powell asserts that the Orders
Approving Settlement Agreements constitute new judgments which
have not expired and which are fully enforceable. She further con-
tends that by failing to object to or appeal from the orders Sattane has
waived his rights to challenge the validity of the prior judgments and
the validity of the contempt orders.

The bankruptcy court found that a judgment and a lien are not the
same, and although the lien had expired pursuant to S.C. Code Ann.
§ 15.35-810 (Law. Co-op. 1976), the judgment survived. Therefore,
the bankruptcy court allowed the balance due on the judgment as an
unsecured non-priority claim in Sattane's bankruptcy action.

The district court affirmed the allowance of the claim on the alter-
native basis that the settlement agreements, adopted by the court as
orders approving settlement agreements, constituted new judgments
or contractual obligations to pay. And, having been entered within ten
years of Sattane's bankruptcy action, the district court determined that
the claim was allowed. Sattane again appeals, contending that the
state court erred in approving the settlement agreements because the
settlement agreements provided for payment on a judgment which
had expired as a matter of law. He also challenges the state court's
contempt orders as violative of the South Carolina Constitution.

A claim under the bankruptcy code shall be allowed, except to the
extent that it is unenforceable against the debtor and property of the
debtor under any agreement or applicable law. 11 U.S.C.A.

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§ 502(b)(1) (West 1993 & Supp. 1998). The validity of a claim based
on a state court judgment may be attacked in bankruptcy court only
on the grounds that there was lack of jurisdiction over the parties or
subject matter or that the judgment was procured by fraud. See Heiser
v. Woodruff, 327 U.S. 726, 732, 733, 736 (1946). Sattane does not
challenge the judgment on any of these bases.

Where an issue has been previously litigated in the state court, res
judicata precludes the parties from relitigating that matter in the bank-
ruptcy court. Heiser, 327 U.S. at 736. Here, Sattane voluntarily
entered into three separate agreements with Powell in settlement of
her attempts to collect on the judgment. Each of these agreements was
approved by the state court and an order approving the settlements
was entered. Sattane did not appeal from any of these orders, nor did
he at that time raise his claim that the judgment had expired by opera-
tion of law. In general, a judgment is res judicata as to all matters liti-
gated in that action and as to all relevant matters which could have
been but were not raised and litigated in the action. See Heiser, 327
U.S. at 735. Because Sattane failed in the state court to assert his
claim that the judgment had expired by operation of law, that matter
is precluded from relitigation in the bankruptcy court.

For the same reasons, we decline to review the propriety of the
state court's orders holding Sattane in contempt of court. Sattane
failed to object to the provision in the state court orders providing for
enforcement by use of the court's contempt powers and he failed to
appeal from this order and assert this issue on appeal. The order find-
ing Sattane in contempt is now res judicata as to his constitutional
challenge.

In conclusion, we affirm the district court's order which affirmed
as modified the bankruptcy court's decision allowing Powell's claim
in the amount of $12,500, and declining to address Sattane's constitu-
tional challenge to the state court's orders finding him in contempt of
court. We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the court
and argument would not aid the decisional process.

AFFIRMED

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