In re Cleveland, Bankruptcy No. 180-00017
| Decision Date | 09 January 1981 |
| Docket Number | Bankruptcy No. 180-00017,Adv. No. 180-0006. |
| Citation | 7 BR 927 |
| Parties | In re Virgil Eugene CLEVELAND, Debtor. Maythol D. CLEVELAND, Plaintiff, v. Virgil Eugene CLEVELAND, Defendant. |
| Court | U.S. Bankruptcy Court — District of South Dakota |
Max Gruenwald, Milbank, S.D., for plaintiff.
Glenn E. Fisher, Webster, S.D., for defendant.
Virgil Eugene Cleveland, a Chapter 7 Debtor, is the divorced spouse of Maythol D. Cleveland, Plaintiff, who filed a Complaint to determine the dischargeability of various debts. Plaintiff's Complaint alleged that the state court divorce decree ordered Debtor to pay various individual debts and to indemnify Plaintiff in the event she was ever required to pay any of the debts. Plaintiff requested the Court to find that the various individual debts are excepted from the discharge under 11 U.S.C. Section 523(a)(5). Debtor's Answer admitted the divorce but alleged that the terms of the divorce decree provided no exception to discharge of indebtedness in bankruptcy. Debtor requested the Court to dismiss the Complaint.
The Court held a hearing and took the matter under advisement. This Bankruptcy Court makes the following findings of fact and conclusions of law based upon the pleadings and evidence presented at the hearing.
On September 5, 1979, the Circuit Court for the Fifth Judicial Circuit, State of South Dakota, entered a Judgment and Decree of Divorce in the case of Maythol D. Cleveland vs. Virgil E. Cleveland. At the divorce hearing held before the state court, counsel entered into an oral stipulation. Based on the divorce hearing, the oral stipulation, Findings of Fact and Conclusions of Law, and other considerations, the state court granted Maythol Cleveland a divorce from Debtor upon the grounds of extreme mental cruelty and physical cruelty. At the time of the divorce the parties had four grown sons.
The state court divorce decree awarded the marital home to Plaintiff and required Debtor to pay the balance of the real estate mortgage, the real property taxes until the mortgage was paid, and the utility bills up to the date of the divorce hearing. The divorce decree then provided for a division of the personal property. Following the division of the property, the divorce decree recited:
Plaintiff testified that the parties agreed that Debtor would pay the debts instead of monthly support payments. However, the divorce decree contained no mention of the reason the state court required Debtor to pay the debts. Without the Findings of Fact and Conclusions of Law entered by the state court in the divorce proceedings, this Bankruptcy Court is left in the dark as to what the parties' and the state court's intentions were in requiring Debtor to pay the individual debts and to indemnify Plaintiff in the event she was ever required to pay any of the debts.
This Bankruptcy Court finds that the following debts were incurred prior to the divorce hearing and are debts for which Plaintiff could be held liable: (1) $30.92 to Janish Motor Company for purchase of gas (Exhibit 1); (2) $117.00 to Fiksdal Furniture (Exhibit 2); (3) $245.00 to D & D Investment Co. for purchase of hand massager and accessories (Exhibit 4); (4) AVCO Financial Services accepted $1,000.00 from Plaintiff in full satisfaction of a $3,500.00 debt secured by household goods (Exhibit 5); (5) $48.59 to Otter Tail Power Co. for water heater (Exhibit 6); (6) Plaintiff paid $35.00 to Dr. Hyland for medical services (Exhibit 9); (7) $159.60 to Northwestern Public Service for electric heaters and thermostats for the marital home; (8) $323.54 to Red Owl in Waubay; (9) $409.14 to Herberger's; (10) $147.82 to Elevator Store in Webster; and (11) $204.34 to Petroleum Equipment Co. (Exhibit 2), which Plaintiff has paid.
The $72.00 owed to Day County Medical Center (Exhibit 11) for an office visit and services done on November 9, 1979, was incurred after the divorce decree.
Although the following debts were incurred prior to the divorce decree, this Bankruptcy Court finds that Plaintiff is not liable for the following debts: (1) $1,239.10 owed to Montgomery Ward (Exhibit 10). The account is only in the name of Virgil Cleveland. There is nothing in the record to indicate that Plaintiff would be liable for a bill listed only in Debtor's name; and (2) $200.00 to Watertown Monument Co. for burial markers. Debtor purchased the markers on his own. If he wishes to return them in satisfaction he may do so. In any event Debtor is the only one liable on the debt unless Plaintiff takes action to purchase the markers on her own.
In the spring of 1980, Plaintiff sold the marital home in order to pay bills. Neither of the parties' financial condition has changed since the divorce.
Whether the individual debts are excepted from the discharge as debts that are in the nature of alimony to, maintenance for, or support of a former spouse in connection with a divorce decree.
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