Elder v. Banon (In re Marriage of Banon)
| Decision Date | 23 December 2020 |
| Docket Number | H046220 |
| Parties | In re the Marriage of VALERIE and MICHAEL BANON. VALERIE MADRIAGA ELDER, Appellant, v. MICHAEL BANON, Respondent. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Monterey County Super. Ct. No. DR48260)
In a judgment of dissolution entered in 2006, the El Dorado County Superior Court ordered respondent Michael Banon (Michael) to pay appellant Valerie Madriaga Elder (Valerie) $297,250 to equalize the division of community property assets and debts. Michael subsequently filed for chapter 7 bankruptcy and listed Valerie and the equalization payment in the amended schedule of creditors filed in the bankruptcy proceeding. In 2008, when Valerie sought an earnings assignment order to enforce the equalization payment, Michael declared to the trial court that the debt had been discharged as part of the bankruptcy. Finding the debt discharged, the trial court quashed the wage assignment.
In 2018, Valerie asked the Monterey County Superior Court to determine that the equalization payment was not discharged in the bankruptcy, and to issue a judgment in the amount of the payment plus interest and other orders to aid in the enforcement of the judgment. On appeal, Valerie contends the trial court erred when it found it was precluded from redetermining whether the equalization payment was properly discharged. Finding no such error, we affirm the order.
Michael and Valerie married in 2003; Valerie filed an amended petition for dissolution in 2006. The Superior Court of El Dorado County entered a judgment of dissolution on December 18, 20062; although the judgment indicates the court held a contested trial, Michael did not appear at the trial, despite receiving notice. The court divided the parties' community property assets between them, including awarding Michael two improved real properties in South Lake Tahoe, California, and the business known as Mountain Java. To equalize the division, the court ordered Michael to pay Valerie $297,250, "payable forthwith," stating Valerie could collect the payment "by any legal means." The judgment was served on Michael by mail in December 2006.
Michael filed a chapter 7 bankruptcy in July 2007.3 In August 2007, he filed an amended schedule of creditors listing the debt owed to Valerie pursuant to the judgment of dissolution. Michael's bankruptcy attorney purportedly mailed the amended schedule to Valerie at a post office box address in Ocklawaha, Florida, which Michael indicatedwas the address he had for Valerie at the time.4 On November 14, 2007, the United States Bankruptcy Court, Northern District of California, issued a discharge of debtor and final decree, stating, "It appearing that the debtor(s) is/are entitled to a discharge, IT IS ORDERED; The debtor(s) is/are granted a discharge under section 727 of title 11, United States Code, (the Bankruptcy Code)." The bankruptcy court ordered the case closed and discharged and relieved the bankruptcy trustee.
The order does not list any specific debts/claims discharged by the order. At the bottom of the first page, it says, "SEE THE BACK OF THIS ORDER FOR IMPORTANT INFORMATION." The second page of the order states, There is a list of "[s]ome of the common types of debts which are not discharged in a chapter 7 bankruptcy case," including "[d]ebts that are domestic support obligations. . . ." Non-support debts owed to a spouse pursuant to a dissolution judgment are not explicitly listed on the back of the order. However, the form indicates, (Emphasis in original.) Michael later declared that neither his bankruptcy attorney nor the court advised him that the equalizing payment was not dischargeable under the federal Bankruptcy Code.
In 2008, Valerie attempted to obtain an earnings assignment order (referred to by Michael and the trial court as a "wage assignment") to enforce the equalization paymentawarded to her in the dissolution judgment. Michael sought to quash the wage assignment by filing a declaration with the trial court indicating that the bankruptcy court had discharged the equalization payment debt. He attached to his declaration the first page of the bankruptcy court's November 2007 final decree, as well as the amended schedule of creditors. On August 7, 2008, the trial court entered an order quashing the wage assignment (the August 2008 order), based on its finding that the bankruptcy court discharged the equalization payment debt in the November 2007 final decree. The trial court stated it made its order after reading and considering Michael's declaration and the attachments; the order does not indicate that the trial court considered any additional evidence in determining that the bankruptcy court discharged the debt.
Valerie did not appeal this order, or otherwise seek relief from the order in the trial court. The register of actions provided with the record on appeal reflects litigation between the parties over the next 10 years concerning custody, visitation, and child support for the one child of the marriage.5
In February 2018, Valerie filed a request for orders in the Superior Court of Monterey County seeking determination of whether the equalization payment debt was properly discharged by the bankruptcy court, and seeking enforcement of payment of that debt by Michael. Valerie alleged Michael filed bankruptcy in an attempt to avoid paying her the amount owed for equalization of the property division, claiming he amended his creditor schedule after she attempted to enforce the equalization judgment; she denied being served with the amendments to the bankruptcy claims. The record on appeal confirms Michael amended the list of creditors in August 2007, before Valerie sought to enforce the equalization payment debt in April 2008. Valerie argued that the trial court had concurrent jurisdiction with the bankruptcy court to determine whether the debt couldbe properly discharged, noting that the payment owed to her was not dischargeable under the Bankruptcy Code (11 U.S.C. § 523(a)(15)).6
Michael opposed Valerie's request, contending the doctrine of res judicata barred enforcement of the equalization payment, as the El Dorado County Superior Court issued the August 2008 order finding that the equalization payment had been discharged by the bankruptcy court. The August 2008 order was an appealable postjudgment order; thus, Michael argued that Valerie's failure to timely appeal the order barred her from seeking the relief she requested in her February 2018 request for order. Alternatively, Michael argued that Valerie's request should be barred under the theory of detrimental reliance, claiming that he relied on Valerie's father for advice regarding the value of the community property during the dissolution trial. Michael alleged that after the entry of the judgment, the business he was awarded under the final decree was He filed bankruptcy to make a "fresh start," and believed the bankruptcy discharged the equalization payment debt, a belief supported by the fact neither his bankruptcy attorney or the court indicated otherwise.
Valerie argued in reply that res judicata did not bar her claim, as the El Dorado County Superior Court issued the August 2008 order based solely on Michael's declaration, without holding a full hearing on the merits of whether the equalizationpayment could be discharged. Valerie claimed she did not have the opportunity to rebut Michael's claims.
The Monterey County Superior Court heard argument at a hearing in May 2018. Michael's counsel stressed the fact Valerie did not file written opposition to Michael's request to quash the wage assignment order in 2008, and did not ask the El Dorado County Superior Court for a hearing on that request, or cite any legal authority that she was entitled to such a hearing. He further argued that the proper remedy was for Valerie to file a timely motion to set aside the resulting order, or file an appeal; she did neither. Valerie's attorney claimed Valerie did not learn that Michael opposed the wage assignment order until after the trial court issued the order quashing the wage assignment; he did not deny that Valerie did not attempt to set aside that order. He conceded Valerie did not file anything with the bankruptcy court to determine whether the equalization payment was dischargeable. The attorney asked the trial court to focus on whether or not the underlying debt had been previously discharged.
The trial court took judicial notice of documents provided by Michael regarding his bankruptcy, including the amended schedule of creditors listing the dissolution judgment debt, and the bankruptcy court's final decree. Although the trial court found that the debt in question was not dischargeable under the terms of the Bankruptcy Code, the court also found that in 2008 the Superior Court of El Dorado County determined that the debt had been discharged. Valerie had never...
To continue reading
Request your trial