In re Golan
| Decision Date | 03 May 2019 |
| Docket Number | CASE NO. 19-10339-BKC-MAM |
| Citation | 600 B.R. 697 |
| Parties | IN RE: Rafael GOLAN, Debtor. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
Angelo A. Gasparri, Boynton Beach, FL, for Debtor.
THIS MATTER came before the Court on April 3, 2019 on the Motion for Sanctions for Violation of the Automatic Stay Against Susan Golan (the "Motion") (ECF No. 35 ). The debtor ("Debtor") seeks an order from this Court determining that the (i) entry of a final judgment (the "Final Judgment") in Debtor's state court divorce proceeding and (ii) filing of a motion to compel in that same proceeding by Debtor's ex-wife, Susan Vigder (the "Ex-Wife"), violated the automatic stay. As a result, the Debtor argues that the Final Judgment is either void or voidable. In addition, based upon an ore tenus motion, Debtor seeks an order to show cause why the ex-wife's marital attorney, Grant J. Gisondo ("Attorney Gisondo"), should not be held in contempt and sanctioned for violating the automatic stay.
For the reasons stated below, the Court denies the Motion to the extent it seeks to void the final judgment and deem its entry a stay violation, but grants the Motion to the extent it seeks to stay collection activities to enforce payment of Ex-Wife's legal fees. In addition, the Court will issue an order to show cause why Attorney Gisondo should not be held in contempt for violating the automatic stay.
After eight years of contentious litigation, the Circuit Court in and for Palm Beach County, Florida (the "State Court") conducted a hearing in the couple's divorce proceeding on November 27, 2018. At the conclusion of that hearing, the State Court issued an oral ruling stating that, inter alia : (1) the parties were officially divorced; (2) Ex-Wife would receive the marital home as her past due and future alimony; and (3) Attorney Gisondo was entitled to legal fees in the amount of $ 20,000, which the State Court directed Debtor to pay (the "Oral Ruling"). The State Court judge requested that Attorney Gisondo prepare a written final judgment, circulate it to Debtor's marital counsel, Stuart House ("Attorney House"), and submit it for entry upon the State Court docket.
Attorney Gisondo prepared a draft judgment (the "Draft Judgment") and sent it to Attorney House, who failed to timely respond with his comments. At Ex-Wife's urging, Attorney Gisondo scheduled a hearing on January 16, 2019 (the "Final Hearing") to present the Draft Judgment to the State Court and thereby assure its entry.
Immediately prior to the Final Hearing, Debtor filed a voluntary petition under chapter 11 on January 9, 2019 (the "Petition Date"). See Debtor's Exhibit 1. That same day, Debtor's bankruptcy counsel, Angelo Gasparri ("Attorney Gasparri"), filed a suggestion of bankruptcy on the State Court docket and served a copy of it on "all parties who have made an appearance on [sic] the case via the Florida E-Filing Portal." See Debtor's Exhibit 3.
Attorney Gisondo did not advise Ex-Wife about the bankruptcy filing, nor did any attorney or party present at the Final Hearing mention the commencement of Debtor's bankruptcy case (the "Bankruptcy Case"). During the Final Hearing, the State Court found that the Draft Judgment accurately memorialized the prior Oral Ruling. The State Court judge signed the Draft Judgment and directed the clerk of the State Court to enter it upon the docket.
The Final Judgment recounts the history of the couple's divorce proceeding and describes testimony by Debtor, Debtor's accountant, and Ex-Wife during several evidentiary hearings. See Debtor's Exhibit 4, at 2. The State Court found Debtor's testimony regarding his allegedly distressed financial condition not to be credible and similarly questioned the veracity of the testimony offered by Debtor's accountant on the same issue. Id. at 4. The State Court expressed concern about Ex-Wife's ability to collect future alimony if the court awarded her periodic payments, particularly given that Debtor was already $ 89,000 in arrears on his existing temporary alimony payments. Id. at 5. As a result, in the Final Judgment, the State Court ordered the marriage dissolved, gave Ex-Wife title to the marital home as her past-due and future alimony, awarded Ex-Wife's counsel $ 20,000 in legal fees, and ordered Debtor to pay those fees. Id. at 6-7.
One month after entry of the Final Judgment (which was also approximately one month after the Petition Date), Debtor had still failed to execute the quitclaim deed in favor of Ex-Wife and likewise had not paid Attorney Gisondo's court-ordered legal fees. On February 28, 2019, Ex-Wife filed a motion (the "Motion to Compel") in the State Court seeking to compel Debtor to perform the acts mandated by the Final Judgment. See Debtor's Exhibit 11. Although Attorney Gasparri emailed Attorney Gisondo requesting withdrawal of the Motion to Compel, Attorney Gisondo failed to comply. See Debtor's Exhibit 6.
Debtor filed his initial schedules of assets and liabilities and statement of financial affairs in this bankruptcy case on January 23, 2019. In Schedule A, Debtor indicated that he did not own any real property. Debtor also neglected to include his Ex-Wife as a creditor in his schedules and in his creditor's matrix, and omitted the pendency of the divorce proceeding from his schedule of pending litigation. Because of those omissions, Ex-Wife did not receive notice from this Court regarding the commencement of Debtor's Bankruptcy Case.
Immediately after Debtor's receipt of the Motion to Compel in the divorce proceeding, he amended his schedules to include (i) an interest in the marital home on Schedule A, (ii) his Ex-Wife as a creditor for past due alimony owed to her in Schedule F, (iii) the divorce proceeding as pending litigation in his Statement of Financial Affairs, and (iv) his Ex-Wife upon the creditor matrix. See ECF No. 31.
One day later, on March 1, 2019, Debtor filed the Motion seeking sanctions for violation of the automatic stay pursuant to 11 U.S.C. § 362(k) against Ex-Wife. Debtor premises his arguments upon the postpetition entry of the Final Judgment on the State Court docket and the postpetition filing of the Motion to Compel. Because both acts occurred postpetition, Debtor contends that (i) the Final Judgment is void or voidable, and (ii) both Ex-Wife and Attorney Gisondo violated the automatic stay.
Appearing pro se in the Bankruptcy Case, Ex-Wife filed several versions of a response to the Motion. See ECF Nos. 46, 48 and 60. Ex-Wife titled her filings as either a "response" to the Motion or a "motion to dismiss" the Motion and included a request that the automatic stay be lifted. At a preliminary hearing conducted on March 26, 2019, the Court determined that the complexity of the factual issues warranted an evidentiary hearing.
The Court conducted the evidentiary hearing on April 3, 2019. At the commencement of the April 3 hearing, the Court inquired why Attorney Gasparri had failed to subpoena Attorney Gisondo to appear at the hearing, considering Debtor's request for sanctions against him. Attorney Gasparri admitted that this failure was an oversight. Because Debtor's apparent goal was to obtain sanctions against both Ex-Wife and Attorney Gisondo, the Court announced that Attorney Gisondo's absence prevented the parties from proceeding with an evidentiary hearing on the Motion at that time.
Since all other parties were present, the Court offered Debtor the opportunity to proceed immediately with a hearing on the Motion on the condition that Debtor waive sanctions in connection with a stay violation. Alternatively, the Court offered to continue the evidentiary hearing so that Attorney Gasparri could correct his oversight and subpoena all required parties. After consulting with Debtor, Attorney Gasparri announced that Debtor agreed to waive his request for sanctions so that he might proceed with the Evidentiary Hearing that same day.1
During the Evidentiary Hearing, both Debtor and Ex-Wife submitted exhibits and testified in support of their respective positions. The Court observed that, during testimony, Debtor appeared uncertain about certain facts relating to his Bankruptcy Case and was noticeably evasive in response to questions about the Oral Ruling and the Final Judgment. By contrast, the Ex-Wife was forthright and clear in recounting the factual history of the couple's marriage and marital dispute, succinctly relaying facts that were obviously uncomfortable for her to describe.2
After Debtor and Ex-Wife completed their testimony, Debtor's counsel moved, ore tenus , for an order to show cause why Attorney Gisondo should not be held in contempt for violating the automatic stay.
At the end of the hearing, the Court took the matter under advisement. After considering the Motion, the Responses, the exhibits introduced and testimony adduced during the evidentiary hearing, as well as arguments of the parties, for the reasons stated below, the Court grants, in part, and denies, in part, the Motion, and grants Debtor's ore tenus motion for an order to show cause.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(b). This is a core proceeding under 28 U.S.C. §§ 157(b)(2)(A), (G), and (O).
Upon the commencement of a bankruptcy case, the automatic stay goes into effect pursuant to 11 U.S.C. § 362(a). The stay bars the continuation of any litigation seeking a recovery from the debtor or asserting a claim against estate property until the case is disposed of by the court. See Carver v. Carver , 954 F.2d 1573, 1576 ...
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...("Entry is for most purposes not necessary to the validity of an order.") Id. at 700 (emphasis added). See also In re Golan , 600 B.R. 697, 712-13 (Bankr. S.D. Fla. 2019) (quoting and applying Int'l. Admin. Servs. ).14 In the present case, whether the State Court entered a judgment on the d......
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