In re Gibson, Bankruptcy No. 96-15530
| Decision Date | 16 June 1997 |
| Docket Number | Adversary No. 97-1015.,Bankruptcy No. 96-15530 |
| Citation | 210 BR 113 |
| Parties | In re Michael A. GIBSON, Debtor. Patianne GIBSON, Plaintiff, v. Michael A. GIBSON, Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Ohio |
Thomas C. Pavlik, Cleveland, OH, for Plaintiff.
Sheldon Stein, Cleveland, OH, for Defendant.
Plaintiff, Patianne Gibson filed her Complaint to Determine Dischargeability of a debt wherein she and the Debtor-Defendant Michael A. Gibson, her former spouse, are co-obligors. This action is premised upon dischargeability provisions found in 11 U.S.C. § 523(a)(5) and (a)(15) of the Bankruptcy Code. In response, the Debtor filed his Answer and a Motion For Summary Judgment. Upon a duly scheduled hearing, the parties respective arguments have been considered, in addition to an examination of the pleadings filed.
Summary judgment motions are considered in view of the procedural standards of Rule 56, Fed.R.Civ.P., as adopted by Bankruptcy Rule 7056, Bankr.R. In pertinent part, Rule 56 provides:
In view of the above procedural standard, the burden of proof is upon the moving party, the Defendant-Debtor, who must show that he is entitled to a grant of summary judgment as a matter of law.
Herein, the parties entered into a separation agreement (Agreement) on April 30, 1996 which, ultimately, was incorporated into a final decree of divorce (Divorce Decree) on May 9, 1996. Subsequently, on October 9, 1996, the Debtor-Defendant filed his petition for Chapter 7 relief in this Court. Among the several debts scheduled on the Debtor's petition for discharge is a debt in an amount of $26,500.00 owed to the Debtor's step-father, Robert Perdue, which was borrowed by the parties from Perdue on May 17, 1992. Once the Debtor filed for bankruptcy relief, this adversary proceeding ensued.
The principal dispositive issue in this proceeding is whether the absence of a "hold harmless" clause in a separation agreement renders an otherwise nondischargeable obligation dischargeable.
Paragraph No. 8 of the Agreement provides:
8. Debts:
The wife shall pay the following debts and hold the Husband harmless thereon: Home Federal Mastercard, Huntington Visa, 1994 Income Tax Obligations, and obligations to certified public accountant incurred prior to the parties\' separation. The Husband shall pay any and all debts to his parents, if any.
Under § 523(a)(5) a discharge under provisions of § 727 of the Code does not discharge an individual debtor from any debt payable to a spouse, former spouse, or child of the debtor pertaining to maintenance or support of those individuals in connection with a separation agreement, divorce decree or other order of a court of record. Further, it is generally held that "hold harmless" provisions contained in such agreements result in nondischargeable debts. Herein, the subject obligation is not payable to a spouse, former spouse or dependent child of the Debtor. Said debt specifically is not addressable as a support or maintenance obligation in the underlying separation agreement (Agreement). Significantly, the only reference to the subject debt attributable to the Debtor is found in Paragraph No. 8 of the Separation Agreement which provides, in pertinent part:
Husband shall pay any and all debts to his parents, if any.
From the above-quoted language, it is clear that the obligees on such debt are the Debtor's parents and not the former spouse. Further, it is clear that no "hold harmless" provision attaches to this obligation. Both parties signed the Agreement, and both were represented by legal counsel throughout the divorce proceeding. Additionally, in Paragraph No. 9, "Assumption of Debts," of the Agreement the parties agreed to assume and pay their respective individual debts which occurred either before or during the marriage as well as during the period of separation. Regarding the subject $26,500.00 note held by the Debtor's step-father, both parties herein had individual liability as they were co-obligers on the note. As such, the assumption of individual debt provision of Agreement Paragraph No. 9 applies.
The parties expressly provided in the Agreement the debts which would be affected by a "hold harmless" provision, and those debts were specifically enumerated. (See Agreement, Para. No. 8). Notedly, the subject debt was not mentioned among those debts. Lastly, it is undisputed that the subject debt did not arise out of a divorce decree or separation agreement for maintenance or support. Where a separation agreement or decree of divorce fails to provide a "hold harmless" provision regarding one or more debts, a former spouse is not entitled to indemnification or reimbursement...
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