In re Ashworth, Case No. 8:11-bk-10946-RK
| Decision Date | 01 October 2012 |
| Docket Number | Case No. 8:11-bk-10946-RK |
| Court | U.S. Bankruptcy Court — Central District of California |
| Parties | In re MATTHEW BANKS ASHWORTH, Debtor. |
In re MATTHEW BANKS ASHWORTH, Debtor.
Case No. 8:11-bk-10946-RK
UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION
DATE: April 19, 2012
DATED: October 1, 2012
This contested matter of Debtor Matthew Banks Ashworth's ("Debtor") Objection to Creditor Kathryn Ehrgott's ("Creditor") Claim No. 2 came on for trial on April 19, 2012 before the undersigned United States Bankruptcy Judge. Richard G. Heston, of the law firm of Heston & Heston, Attorneys at Law, appeared on behalf of Debtor. Scott Talkov and Douglas A. Plazak, of the law firm of Reid & Hellyer, A Professional Corporation, appeared on behalf of Creditor.
Having considered the testimony and other evidence received at trial, the court issues this memorandum decision setting forth its findings of fact and conclusions of law.
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I. PROCEDURAL BACKGROUND
On January 21, 2011, Debtor filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code, 11 U.S.C, accompanied by a proposed Chapter 13 Plan. Joint Pretrial Order ("JPTO"), filed on January 13, 2012, Stipulated Facts, ¶ 1.
Ms. Ehrgott is a creditor of Debtor as a result of a stipulated Final Judgment rendered in the divorce proceeding entitled, "Kathryn E. Ashworth, Plaintiff, vs. Matthew Banks Ashworth, Defendant," in the Chancery Court for Knox County, Tennessee, case number 164023-3 and entered on October 31, 2006 (hereinafter referred to as "the Tennessee Divorce Proceeding"). JPTO, Stipulated Facts, ¶ 3. On February 17, 2011, Creditor filed Claim No. 2 in the amount of $259,682.81 for Alimony. Claim No. 2, filed on February 17, 2011. On February 17, 2011, Creditor also filed her objection to Debtor's Chapter 13 Plan. JPTO, Stipulated Facts, ¶ 52.
On June 24, 2011, Debtor signed an Amended Chapter 13 Plan, which was filed on June 30, 2011. JPTO, Stipulated Facts, ¶ 54. This Amended Chapter 13 Plan was filed by Debtor based on the reduction of his disposable income from Creditor's garnishment of the payments described in the Final Judgment. Id.
Debtor's Amended Plan classified and provided for payment to Creditor only as a dischargeable general unsecured claim not entitled to priority treatment as a domestic support obligation. Amended Chapter 13 Plan, filed on June 30, 2011. While Creditor has not filed an objection to the Amended Chapter 13 Plan, the parties have stipulated that her Objection to the Plan filed February 17, 2011 is an Objection to the Amended Chapter 13 Plan. JPTO, Stipulated Facts, ¶ 55.
On May 26, 2011, Debtor filed the instant Objection to Creditor Kathryn Ehrgott's Claim No. 2.
II. FACTS
The parties have stipulated to many of the facts as set forth in the joint pretrial order filed on January 13, 2012. JPTO, Stipulated Facts, ¶¶ 1-56.
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Debtor and Creditor were married on June 12, 1999, in Athens, Georgia. JPTO, Stipulated Facts, ¶ 2. They separated on April 24, 2005, while residing in Knox County, Tennessee. Id. They have two minor children from their marriage. Id. About six weeks following their wedding, Debtor informed Creditor that he had ambivalent sexual feelings and that he had experienced feelings of attraction to members of his same sex. JPTO, Stipulated Facts, ¶ 4. Creditor informed Debtor that she would file for divorce if he engaged in an extramarital affair. Id. Debtor agreed that he would advise Creditor if he acted upon his attraction to members of the same sex. Id.
During the marriage, Debtor's gross income increased by $109,000, from $41,000 in 1999 to $150,000 in 2006. JPTO, Stipulated Facts, ¶ 5. Debtor received several promotions during this time in his capacity as a banker. Id. Debtor and Creditor moved twice during the marriage and eventually resided in Knoxville, Tennessee. Id.
For the first three years of their marriage, Creditor worked a school teacher with a gross income of approximately $30,000. JPTO, Stipulated Facts, ¶ 6. After Creditor gave birth to their first child on August 4, 2002, she remained at home and did not work. Id.
On April 12, 2005, Debtor went to Atlanta, Georgia, on a business trip. JPTO, Stipulated Facts, ¶ 8. During that trip, Debtor engaged in extramarital sexual relations with a person of the same sex. Id.
On April 13, 2005, Debtor returned home from his business trip, and subsequently engaged in sexual intercourse with his wife, Creditor. JPTO, Stipulated Facts, ¶ 9.
On April 18, 2005, Debtor developed flu-like symptoms, a swollen lymph node and blisters or lesions in his groin area. JPTO, Stipulated Facts, ¶ 10. On April 24, 2005, Debtor went to his doctor to inquire about the symptoms he had developed, and he learned that his symptoms were caused by a sexually transmitted disease later confirmed to be herpes simplex 1. JPTO, Stipulated Facts, ¶ 11. Debtor informed Creditor that while on his business trip he had an extramarital affair with a person of the same sex. JPTO, Stipulated Facts, ¶ 12.
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On April 24, 2005, Creditor visited her doctor, who informed her that she had contracted a sexually transmitted infection that would later be diagnosed as herpes simplex 1. JPTO, Stipulated Facts, ¶ 13.
On April 25, 2005, Creditor met with a divorce attorney who filed her complaint for divorce one day later on April 26, 2005. JPTO, Stipulated Facts, ¶ 14. Creditor's divorce complaint demanded both temporary and permanent alimony. Id.
On April 26, 2005, Creditor visited a doctor who informed her that she was pregnant with her second child. JPTO, Stipulated Facts, ¶ 15. On April 28, 2005, Creditor visited the same doctor, who again confirmed that she was pregnant. Id.
On May 16, 2005, Debtor and Creditor agreed to an order of the court that provided Creditor with exclusive use of the family residence and temporary custody of their first child, with Debtor having co-parenting time. JPTO, Stipulated Facts, ¶ 16.
One June 20, 2005, Debtor and Creditor agreed to a second order of the court that provided, under the heading "Support," that Debtor would pay Creditor child support of $460 twice a month as well as a one time payment of $2,000 in addition to $380 per month in temporary spousal support through December 2005. JPTO, Stipulated Facts, ¶ 17. The June 20, 2005 agreed order required Debtor to pay the mortgage on the house that Creditor was living at, as well as her car payment and car insurance. Id.
On December 16, 2005, during the pendency of the Tennessee Divorce Proceeding, Creditor commenced a civil suit against Debtor entitled "Kathryn E. Ashworth, Plaintiff, vs. Matthew Banks Ashworth, Defendant", in the Chancery Court for Knox County, Tennessee, Case number 1-684-05, in which she sought to recover $5,000,000 in general damages and $5,000,000 in punitive damages as a result of allegedly contracting herpes simplex 1 from Debtor, with which he had become infected during the marriage as a result of an extramarital affair (the "Tennessee Civil Suit"). JPTO, Stipulated Facts, ¶ 19. The Tennessee Civil Suit alleged causes of action for Battery, Fraud and Misrepresentation, Intentional Infliction of Emotional Distress,
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Negligence and Negligence Per Se. Id. Debtor filed an answer denying the allegations. Id.
On December 29, 2005, while still married to Debtor, Creditor gave birth to a second child. JPTO, Stipulated Facts, ¶ 20.
On March 17, 2006, a hearing was held in the Tennessee Divorce Proceeding to determine child support and alimony pendent lite during the pendency of the divorce, among other issues. JPTO, Stipulated Facts, ¶ 22. The Chancery Court made oral rulings on several matters relating to child support and alimony, but asked the attorneys to draft an order for support that would be agreed to by Debtor and Creditor. Id.
On July 17, 2006, nunc pro tunc to March 17, 2006, the Chancery Court in the Tennessee Divorce Proceeding signed a document entitled "Order", which required Debtor to "pay $100 per month, in addition to mortgage, car payment and all insurance policies for [Creditor] as alimony pendent lite to [Creditor] . . . retroactive to January 1, 2006." JPTO, Stipulated Facts, ¶ 23. The Chancery Court expressly reserved the calculation of any temporary alimony, above the support already provided in the order, to be reserved for a future hearing. Id.
On July 26, 2006, Debtor stipulated in writing in the Tennessee Civil Suit that he "infected the plaintiff [Creditor], his wife, with the Herpes virus by engaging in unprotected sex with her." JPTO, Stipulated Facts, ¶ 24. This reference is to herpes simplex 1. Id.
The parties appeared in response to notices of deposition in the Tennessee Civil Suit on September 29, 2006 for the purpose of being deposed in connection with that proceeding. JPTO, Stipulated Facts, ¶ 25. On that date, the parties entered into an agreed settlement of all claims arising in both the Tennessee Divorce Proceeding and the Tennessee Civil Suit. Id. The agreed settlement was recited on that date and recorded by stenographic transcription ("Settlement Transcript"). Id.; Transcript of Proceedings, September 29, 2006,...
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