In re Canganelli

• Decision Date: 03 August 1991
• Docket Number: Bankruptcy No. 88-61100,Adv. No. 89-6179.
• Citation: 132 BR 369
• Parties: In re Michael Antonio CANGANELLI, Debtor. Michael Antonio CANGANELLI, Plaintiff, v. LAKE COUNTY INDIANA DEPARTMENT OF PUBLIC WELFARE, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Indiana

132 B.R. 369 (1991)

In re Michael Antonio CANGANELLI, Debtor Michael Antonio CANGANELLI, Plaintiff, v. LAKE COUNTY INDIANA DEPARTMENT OF PUBLIC WELFARE, Defendant.

Bankruptcy No. 88-61100, Adv. No. 89-6179.

United States Bankruptcy Court, N.D. Indiana, Hammond Division at Gary.

August 3, 1991.

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John L. Kelly, Merrillville, Ind. and John Hovanec, Lake Station, Ind., for plaintiff-debtor.

Jeff Schlesinger, Gary, Ind., for defendant.

MEMORANDUM OPINION AND ORDER

MOTION FOR SUMMARY JUDGMENT

KENT LINDQUIST, Chief Judge.

I Statement of Proceedings

This adversary proceeding came before the Court on a Motion for Summary Judgment filed by the Defendant, Lake County Indiana Department of Public Welfare (hereinafter: "Department"), on February 15, 1990.

By Order of this Court dated February 16, 1990 the Debtor-Plaintiff Michael Antonio Canganelli (hereinafter: "Debtor") was given 15 days to file a written response or answer to said motion and the Department was granted 7 days to file a reply thereto.

On March 6, 1990, the Debtor filed his response and a Counter Motion for Summary Judgment, and the Department was given 15 days to file a written response to the Counter Motion for Summary Judgment by the Debtor. On March 23, 1990, the Department filed its response to the Counter Motion for Summary Judgment.

The Debtor's complaint filed on November 13, 1989 prays that this Court make a determination as to the dischargeability of a debt under § 523(a)(5) owed by the Debtor to the Lake County Department of Welfare (hereinafter: "Department"), pursuant to an Order entered on or about December 5, 1985 by the Lake County, Indiana, Superior Court, Juvenile Division under Cause No. J84-2234. The debt resulted from expenses incurred by the Department while the Plaintiff's daughter was a ward of the state retroactive to July 3, 1984. On November 30, 1987, the Juvenile Court ordered the Debtor to make monthly payments to the Lake County Clerk on said debt.

The Debtor's complaint, among other things, disputes the amount and reasonableness of the debt for various reasons as set out in rhetorical paragraphs 4, 5 and 6 of his complaint which alleges as follows:

4) The expenditures which are the subject of 3) above were:

a) Not allowed to be monitored by the DEBTOR;

b) Were something close to half of the DEBTOR\'s total gross income during the period in which the oldest daughter of the DEBTOR was forcibly absented from full-time residency in the home of the DEBTOR;

c) Were more than half the total amount earned and spent during the same period by the DEBTOR for the support of all of the DEBTOR, his wife, the other daughter of the DEBTOR, the two sons of the DEBTOR, and the three stepsons of the DEBTOR;

d) Were something close to twice the average monthly expenditure which the caseworker at the time of the original removal had told the DEBTOR that he might expect, and

e) The DEBTOR was not given any credit against the billings for those period in which the oldest daughter of the DEBTOR was in the home of the DEBTOR on extended visits and during which time no expenditures were being made on behalf of the oldest daughter of the DEBTOR by anyone other than the DEBTOR.

5. The DEBTOR further disputes the reasonableness of any expenditures allegedly made for medical and/or dental needs for the oldest daughter of the DEBTOR, due to two main reasons:

a) They were apparently far higher than the expenditures made for equivalent services by the DEBTOR for the same and other dependents at the same and other times and

b) The actual cost to the DEBTOR would and should have almost nothing out-of-pocket, since the oldest daughter of the DEBTOR was a full-covered dependent under the Health Maintenance Organization insurance plan which the DEBTOR had in effect during most of the period in which the oldest daughter of the DEBTOR was not allowed to live full-time at the home of the DEBTOR.

6. Assuming, arguendo, that the Defendant\'s computation of the total amount which it allegedly spent on behalf of the oldest daughter of the DEBTOR is correct, the DEBTOR calculates that the payments actually made by the DEBTOR reduced the total expenditures outstanding by $150.00, not the mere $90.00 which the Defendant credited to the DEBTOR.

7. DEBTOR totally and completely denies and disputes that the sum which is alleged by the Defendant to be due and owing (whatever the correct sum expended is) ever was, let alone is still due and owing by DEBTOR, since no final determination was ever made about what total amount should be borne by each and/or either of DEBTOR and/or his ex-wife.

The Department's answer filed on December 12, 1989 prayed that the debt be found to be nondischargeable, and raised what it called an affirmative defense in that the Debtor was not entitled to a general discharge pursuant to § 727(a)(8) since he had been granted a discharge on January 13, 1984, or less than six years from the date of the Debtor's present petition. (No formally denominated countercomplaint was filed by the Department in this or any other Adversary Proceeding).

On July 7, 1983, the Debtor filed a petition under Chapter 7 and the Court granted the Debtor a general discharge on January 13, 1984. On July 8, 1988, or five years and one day after his previous chapter 7 petition, the Debtor filed a petition under Chapter 13 which was converted to a Chapter 7 case on August 10, 1989, or six years and 34 days after his previous chapter 7 petition.

One of the debts listed by the Debtor in his verified Schedule A-3 to his Chapter 13 petition was a $46,000.00 unsecured debt owed to the Department. This debt was a result of services provided to the Debtor's daughter from July 3, 1984 to August 14, 1987 while she was a ward of the Department. During the wardship, the Department expended $45,081.91 for the Debtor's dependent's board and medical expenses. On November 30, 1987, the Lake County Juvenile Court ordered the Debtor to begin reimbursing the Department by making monthly payments of $50.00 to the Clerk of Lake County. See, claim of Department filed in the Debtor's main case on December 5, 1988. It is this debt of $45,081.91, from which the Plaintiff seeks to be discharged in this proceeding pursuant to § 523(a)(5).

The Department's Memorandum of Law in Support of its Motion for Summary Judgment argues first, that § 727(a)(8) prevents the Debtor from receiving a general discharge because the second petition was filed within 6 years of the first Chapter 7 petition, and secondly that the specific debt to the Department is non-dischargeable under 11 U.S.C. § 523(a)(5).

Before this Court can consider whether this specific debt to the Department is dischargeable under § 523(a)(5) in the Debtor's present Chapter 7 proceedings, the Court must first determine whether the Debtor is entitled to a general discharge under § 727(a)(8), notwithstanding the fact that the Debtor filed a petition in a previous chapter 7 case on July 7, 1983, or within six years of both the Chapter 13 petition filed in this case on July 8, 1988 and the order converting this case to one under chapter 7, entered on August 10, 1989. If the Debtor cannot receive a general discharge under § 727, in the case sub judice the Court need not entertain the issue of whether the specific debt owed to the Department is dischargeable under § 523(a)(5). If the Debtor is eligible for a general discharge under § 727, the Court must then determine if the specific debt of the Debtor to the Department is dischargeable pursuant to § 523(a)(5) in the Debtor's present Chapter 7 case.

II

Conclusions of Law and Discussion

A General Principles Relating to Summary Judgment

No objections were made by the parties to the jurisdiction of this Court and the Court finds this is a core proceeding pursuant to 28 U.S.C. § 157.

The granting of a motion for summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

The moving party, in making a motion for summary judgment, "has the burden of establishing the lack of a genuine issue of material fact." Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir.1984); Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984).

When ruling on a motion for summary judgment, inferences to be drawn from underlying facts contained in such materials as attached exhibits, and depositions must be viewed in a light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1961); See also, Yorger v. Pittsburgh Corning Corp., 733 F.2d 1215 (7th Cir. 1984).

By entering a summary judgment for a party, the court is concluding that based on the evidence upon which the nonmoving party intends to rely at trial, no reasonable jury could return a verdict for the non-moving party. Munson v. Friske, 754 F.2d 683, 690 (7th Cir.1985); Weit v. Continental Illinois National Bank & Trust Co., 641 F.2d 457, 461 (7th Cir.1981), cert. den., 455 U.S. 988 102 S.Ct. 1610, 71 L.Ed.2d 847 (1982).

Once a moving party has met its initial burden, the opposing party must "set forth specific facts showing that there is a genuine issue for trial" and that the disputed fact is material. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.1983), cert. den., 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Thus, if the movant carries his initial burden the opposing party may not defeat the motion by merely relying on the contentions of its pleadings, but must produce significant probative evidence to support its position. First National Bank v. Cities Service Co., 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-93, 20 L.Ed.2d 569 (1968); United States v. Pent-R Brooks, Inc., 538 F.2d 519 (2nd Cir.1976), cert. den. 430 U.S. 906, 97 S.Ct. 1175, 51...