In re Palomino
| Decision Date | 13 October 2006 |
| Docket Number | Bankruptcy No. 05-42173-BKCLMI.,Adversary No. 06-01061-BKC-LMI. |
| Citation | 355 B.R. 349 |
| Parties | In re: Carmelo D. PALOMINO, Debtor. David L. Manz, Plaintiff, v. Carmelo Palomino, Defendant. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
David L. Manz, Marathon, FL, pro se.
D. Jean Ryan, Miami, FL, for Carmelo Palomino,
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
This matter came before the Court on September 6, 2006 at 9:30 a.m. on the Defendant's Motion to Dismiss Complaint to Determine Dischargeability of Debt for Lack of Standing and for Failure to State a Claim Upon Which Relief Can be Granted (Ca # 35). The Court has reviewed the pleadings filed by the parties, the record in this case, considered argument of counsel, and all other matters the Court deems pertinent to this decision. For the reasons set forth below, the Motion to Dismiss is Denied.
Prior to filing bankruptcy, Carmelo Palomino (the "Debtor" or "Defendant") and his then wife, Lana Palomino (the "Former Spouse") went through what was evidently a heavily contested divorce proceeding. The Plaintiff, David Manz (the "Plaintiff") represented the Former Spouse in her divorce proceedings.
The trial court entered a Final Judgment of Dissolution (the "Divorce Judgment") and a final judgment awarding attorney fees (the "Fee Judgment"). The Plaintiff alleges those fees were awarded based on the disparities in the financial positions of the Debtor and the Former Spouse. The Debtor appealed the Fee Judgment, which judgment was reversed and remanded for a new evidentiary hearing. The Plaintiff was also awarded appellate fees, with directions to the trial court to set the amount of fees. The Debtor appealed the trial court's award of the appellate fees as well.
In addition to the appeals, there was evidently ongoing litigation relating to child support, which apparently resulted, among other things, in entry by the trial court of one or more contempt orders against the Debtor.
The Plaintiff was not a party to the Settlement Agreement. The Former Spouse terminated the Plaintiff's employment at the time the Settlement Agreement was signed.
The Debtor then filed with the appellate court a motion to remand all appellate proceedings (i.e. the attorney fee appeals) stating in the motion for remand that approval of the Settlement Agreement was set for bearing before the trial court the following week. The appellate court granted the motion. The Plaintiffs motion for rehearing of the order of remand was denied. The Plaintiff then wrote to the Debtor advising the Debtor that the Plaintiff would accept the $10,000.00 described in the Settlement Agreement. The Debtor did not pay the Plaintiff the $10,000.00.
The Debtor filed his chapter 7 case on October 6, 2005 (the "Petition Date").
On January 17, 2006 the Plaintiff filed a Complaint to Determine Dischargeability of Debt. In the Complaint the Plaintiff alleges that, pursuant to the Settlement Agreement, Debtor is indebted to the Plaintiff, which debt is in the nature of alimony, maintenance or support and is, consequently, nondischargeable pursuant to 11 U.S.C. § 525(a)(5). On March 17, 2006, the Debtor filed his Answer and Affirmative Defenses (CP # 13).
On August 3, 2006 the Debtor filed his Amended Motion to Dismiss the Complaint1 (CP # 35), arguing (a) that the Plaintiff does not have standing to bring the action, (b) that the Debtor does not owe any obligation to the Plaintiff, (c) that the Plaintiff is not entitled to the relief sought because there is no order or judgment awarding fees to the Plaintiff, (d) that, in any event, the attorney fees are dischargeable because there is nothing in the Settlement Agreement that indicates the parties had any intent the fees be nondischargeable, and the Settlement Agreement was clearly in the nature of a property settlement agreement, and finally, (e) since the Former Spouse's obligations to the Plaintiff have been discharged in her bankruptcy, the obligation owed to the Plaintiff cannot be considered an obligation to a former spouse, as required by 11 U.S.C. § 523(a)(5).
The Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. § 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b). Because the Debtor's bankruptcy case was filed before the effective date of BAPCPA2 changes to 11 U.S.C. § 523(a)(5), the Court must review the statute as it was in effect prior to BAPCPA.
Because the Debtor filed his answer several weeks prior to filing his motion to dismiss, the motion to dismiss is untimely. Fed.R.Civ.P. 12(b)(6) made applicable to these proceedings by Fed. R. Bankr.P. 7012, provides that a motion to dismiss for failure to state a claim upon which relief can be granted "shall be made before pleading if a further pleading is permitted." While some courts allow a motion to dismiss to be filed simultaneous with an answer, see, e.g., Contois v. State Mut. Life Assur. Co. of Worchester, Mass., 66 F.Supp. 76 (N.D.Ill.1945), a motion to dismiss filed weeks after the answer was filed is certainly untimely. See Skrtich v. Thornton, 280 F.3d 1295 (11th Cir.2002). Moreover, the Debtor appended several exhibits to the Amended Motion to Dismiss and relies on these exhibits in his argument. When a party relies on documents outside the pleadings, this Court must treat a motion to dismiss as a motion for summary judgment. Fed.R.Civ.P. 12(b); Bost v. Federal Express Corp., 372 F.3d 1233 (11th Cir.2004).
Summary judgment is appropriate where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In considering whether a genuine issue of material fact remains for trial, the court must "view all evidence and make all reasonable inferences in favor of the party opposing summary judgment." Loren v. Sasser, 309 F.3d 1296, 1301-1302 (11th Cir.2002). However, "a mere `scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Id. at 1302 (quoting Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990)).
In the instant case the Plaintiff has raised sufficient material facts, that, if proven, would entitle the Plaintiff to relief, and therefore summary judgment is denied.3
There is no requirement under 11 U.S.C. § 523(u)(5) that the debt arise from a judgment or order
Debtor's argument that Plaintiff is not entitled to relief in the absence of an order awarding fees is not supported by the law. 11 U.S.C. § 523(a)(5), pre-BAPCPA, provides that any debt "to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement . . . or property settlement" (emphasis added) may be excepted from discharge. The statute does not require an order or judgment in order for a debt to meet the standards for nondischargeability under section 523(a)(5); debts arising from a settlement agreement are equally eligible for nondischargeability under section 523(a)(5).4
The Settlement Agreement does not appear to be a property settlement agreement and the intent of the Settlement Agreement is not clear
In the instant case, the Debtor argues that not only was there no intent indicated in the Settlement Agreement that the attorney fees would be nondischargeable, but "[t]o the contrary, the Former Spouse knew the Debtor would be filing for bankruptcy relief...."5 Moreover, the Debtor argues, the Settlement Agreement is a property settlement agreement and therefore the obligations are not covered under section 523(a)(5). Finally, the Debtor argues that the Former Spouse received $30,000.00 as part of the Settlement Agreement and therefore she did not need the Debtor to pay the attorney fees to the Plaintiff.6
The determination of whether attorney fees are nondischargeable under 11 § 523(a)(5) is a matter of federal law, In re Harrell, 754 F.2d 902 (11th Cir.1985), and requires only "a simple inquiry as to whether the obligation can legitimately be characterized as support, that is, whether it is in the nature of support." Strickland v. Shannon (In re Strickland) 90 F.3d 444 (11th Cir.1996) (emphasis in original). While the determination is a matter of federal law, the Court can look to state law for guidance even though state law is not controlling Id.; Smallwood v. Finlayson (In re Finlayson), 217 B.R. 666 (Bankr. S.D.Fla.1998).
"To determine whether an attorney fee award is nondischargeable, the [c]ourt must determine whether the debt connected with the fees is nondischargeable." In re...
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