In re Gibson
| Decision Date | 03 April 1998 |
| Docket Number | BAP No. 97-8075. |
| Citation | 219 BR 195 |
| Parties | In re Michael A. GIBSON, Debtor. Pattianne GIBSON, Plaintiff-Appellant, v. Michael A. GIBSON, Defendant-Appellee. |
| Court | U.S. Bankruptcy Appellate Panel, Sixth Circuit |
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Scott H. Scharf, argued, Rubenstein, Novak, Einbund, Pavlik & Celebrezze, Cleveland, OH, for Appellant.
Sheldon Stein, argued and on brief, Cleveland, OH, for Appellee.
Thomas C. Pavlik, on brief, Rubenstein, Novak, Einbund, Pavlik & Celebrezze, Cleveland, OH, for Appellee.
Before LUNDIN, STOSBERG, and WALDRON, Bankruptcy Appellate Panel Judges.
During their marriage, Michael A. Gibson, the Debtor, and his former spouse, Pattianne Gibson, borrowed money (the "Note") from Robert Perdue, the Debtor's stepfather. When the parties ended their marriage, the Ohio domestic relations court's final Dissolution Decree incorporated their Separation Agreement, which provided the Debtor "shall pay" the Note. The Debtor filed bankruptcy and included Ms. Gibson and his stepfather as creditors. Ms. Gibson, who had been sued by the stepfather for her failure to pay the Note, filed an adversary proceeding to determine the Debtor's obligation on the Note to be nondischargeable pursuant to 11 U.S.C. § 523(a)(5) and § 523(a)(15). The bankruptcy court granted the Debtor's motion for summary judgment and determined the Note to be dischargeable pursuant to both § 523(a)(5) and § 523(a)(15). Ms. Gibson appealed both determinations of the bankruptcy court. The Panel affirms the bankruptcy court's determination that the Note is dischargeable pursuant to § 523(a)(5), although for different reasons than those relied upon by the bankruptcy court. The Panel reverses the bankruptcy court's determination that the Note is dischargeable pursuant to § 523(a)(15) and remands the case for further proceedings.
1. Whether, within the meaning § 523(a)(5), the bankruptcy court's decision granting summary judgment in favor of the Debtor was correct and, if not, whether the Panel may affirm the decision on a different basis.
2. Whether, within the meaning of the qualifying language of § 523(a)(15), a debt was incurred by the Debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record.
The Panel has jurisdiction over final orders of the bankruptcy court pursuant to 28 U.S.C. § 158(c)(1). The bankruptcy court's order granting summary judgment to the Debtor is a final appealable order reviewed de novo. Myers v. IRS (In re Myers), 216 B.R. 402, 403 (6th Cir. BAP 1998). Under the de novo standard, the Panel will resolve issues of law independently of the bankruptcy court's determinations. Id.
Michael A. Gibson ("the Debtor") and Pattianne Gibson ("Ms.Gibson") were married on June 8, 1985. During their marriage, the Debtor and Ms. Gibson incurred a debt to the Debtor's stepfather of $35,000.00, evidenced by a joint promissory Note executed by the parties on May 17, 1992.
The parties' marriage was terminated by a judgment entry (the "Dissolution Decree") of the Domestic Relations Division of the Cuyahoga County Court of Common Pleas on May 9, 1996. The parties also entered into a Separation Agreement, which the domestic relations court fully incorporated into the Dissolution Decree after finding the agreement to be fair, just, and reasonable.
The Debtor filed a Chapter 7 case on October 9, 1996. The Debtor scheduled the joint Note to the Debtor's stepfather in the amount of $26,500.00. On December 9, 1996, the Debtor's stepfather brought a complaint against Ms. Gibson in the Cuyahoga County Court of Common Pleas seeking $26,500.00 for nonpayment of the Note.
On January 14, 1997, Ms. Gibson brought an adversary proceeding in the Debtor's Chapter 7 case, claiming the Debtor is solely responsible for payment of the Note to his stepfather and, under the terms of the Separation Agreement, the Note is nondischargeable pursuant to 11 U.S.C. § 523(a)(5) and § 523(a)(15). The specific provision of the Separation Agreement which is the focus of the parties' arguments provides:
The bankruptcy court granted the Debtor's motion for summary judgment and dismissed Ms. Gibson's complaint. The court concluded that the Separation Agreement did not create any obligation in favor of Ms. Gibson which could be found nondischargeable under § 523(a)(5) or § 523(a)(15). Gibson v. Gibson (In re Gibson), 210 B.R. 113, 115 (Bankr.N.D.Ohio 1997). The bankruptcy court held that, although the Separation Agreement required the Debtor to pay any and all existing debts to his stepfather,1 a third party creditor, it did not require the Debtor to make any such payments directly to his former spouse. Id. In connection with Ms. Gibson's claim under § 523(a)(5), the bankruptcy court further based its determination on the failure to list the Note "as a support obligation" in either the Dissolution Decree or the Separation Agreement. Id. In connection with Ms. Gibson's claim under § 523(a)(15), the bankruptcy court further based its determination on the failure to include "hold harmless" language as part of the Note in either the Dissolution Decree or the Separation Agreement. Id.
Summary judgment in adversary proceedings is governed by Bankruptcy Rule 7056, which incorporates Rule 56 of the Federal Rules of Civil Procedure. FED.R.BANKR.P. 7056. The Sixth Circuit has succinctly described the proceedings on a motion for summary judgment as follows:
A court must grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Under this test, the moving part may discharge its burden by "pointing out to the bankruptcy court . . . that there is an absence of evidence to support the nonmoving party\'s case." The nonmoving party cannot rest on its pleadings, but must identify specific facts supported by affidavits, or by depositions, answers to interrogatories, and admissions on file that show there is a genuine issue for trial. Although we must draw all inferences in favor of the nonmoving party, it must present significant and probative evidence in support of its complaint. "The mere existence of a scintilla of evidence in support of the nonmoving party\'s position will be insufficient; there must be evidence on which the jury could reasonably find for the nonmoving party."
Hall v. Tollett, 128 F.3d 418, 421-422 (6th Cir.1997) (internal citations omitted).
A material fact is one whose resolution will affect the determination of the underlying action. Tennessee Dep't of Mental Health & Mental Retardation v. Paul B., 88 F.3d 1466, 1472 (6th Cir.1996) (citation omitted). An issue is genuine if a rational trier of fact could find in favor of either party on the issue. Schaffer v. A.O. Smith Harvestore Prods., Inc., 74 F.3d 722, 727 (6th Cir.1996) (citation omitted). "The substantive law determines which facts are `material' for summary judgment purposes." Hanover Ins. Co. v. American Eng'g Co., 33 F.3d 727, 730 (6th Cir.1994) (citations omitted).
In pertinent part, § 523(a)(5) provides:
11 U.S.C. § 523(a)(5).
In applying § 523(a)(5) in the Sixth Circuit, Long v. Calhoun (In re Calhoun), 715 F.2d 1103, 1109 (6th Cir.1983). See also McCafferty v. McCafferty (In re McCafferty), 96 F.3d 192, 195 (6th Cir.1996). "The burden of demonstrating that an obligation is in the nature of support is on the former spouse." Fitzgerald v. Fitzgerald (In re Fitzgerald), 9 F.3d 517, 520 (6th Cir. 1993) (citing Calhoun, 715 F.2d at 1111).
Although the parties filed memoranda in support of their positions in connection with the Debtor's motion for summary judgment, the Separation Agreement was the only evidence relied upon by either party. After examining Paragraph 8 of the Separation Agreement, the bankruptcy court stated that the only language imposing an obligation on the Debtor was the sentence providing "Husband shall pay any and all debts to his parents, if any." Gibson, 210 B.R. at 114. The court next observed "it is clear that the obligees on such debt are the Debtor's parents and not the former spouse." Id. The bankruptcy court concluded that § 523(a)(5) does not preclude discharge of the debt because "the subject obligation is not owed to the Plaintiff former spouse, and neither the Decree nor Agreement lists this particular debt as a support obligation." Id. at 115.
The issue of whether a former spouse's...
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