In re Kimball

• Decision Date: 13 December 2016
• Docket Number: Case No. 16–11996–JDL
• Citation: 561 B.R. 861
• Parties: In re: Robert B. Kimball and Janet R. Kimball, Debtors.
• Court: U.S. Bankruptcy Court — Western District of Oklahoma

561 B.R. 861

In re: Robert B. Kimball and Janet R. Kimball, Debtors.

Case No. 16–11996–JDL

United States Bankruptcy Court, W.D. Oklahoma.

Signed December 13, 2016

James Branum, Branum Law Offices, Newcastle, OK, for Debtors.

ORDER DETERMINING APPLICABLE STATUTE OF LIMITATIONS TO CLAIM AND RESCHEDULING HEARING

Janice D. Loyd, U.S. Bankruptcy Judge

This matter is before the Court on Debtors' Objection to Proof of Claim of Alleged Priority Secured Creditor Tambra Lynn Kimball ("Objection") [Doc. 27] and the Response to Objection of Creditor Tambra Lynn Kimball ("Tambra") ("Response ") [Doc. 29]. The basis of Debtor's Objection is that the claim for back child support of Tambra, Debtor Robert B Kimball's ("Robert") ex-wife, is barred by the statute of limitations. In her Response, Tambra asserts that the statute of limitations was extended by Robert's voluntary payment of his child support obligation after the expiration of the statute of limitations. By its Order Continuing Hearing on Debtors Objection to Proof of Claim the court directed the parties to submit briefs on the issue of the statute of limitations under the child support order in the Decree of Divorce issued by the State of Utah. [Doc. 37]. Debtor, Robert, timely submitted his Brief on the Identified Subject of Tolling of Statute of Limitations of Child Support as Ordered by State of Utah ("Debtor's Brief ") [Doc. 39]. The creditor, Tambra, failed to file a brief as directed by the Court. Despite Tambra's failure to submit a brief, this Court must consider the case on the merits. "Courts are not required to grant a request for relief simply because the request is unopposed." In re Millspaugh , 302 B.R. 90, 93 (Bankr. D. Idaho 2003) ; In re Franklin , 210 B.R. 560, 562 (Bankr. N.D. Ill. 1997) ; Nunez v. Nunez (In re Nunez) , 196 B.R. 150, 156–57 (9th Cir. BAP 1996) (the BAP observing that "[t]he granting of an uncontested motion is not an empty exercise but requires that the Court find merit to the motion.").

This Court has jurisdiction over this contested matter of the Debtor's objection to the creditor's claim pursuant to 28 U.S.C. §§ 157(a)(1), 157(b)(2)(B) and 1334 and Rules 3007 and 9014 of the Fed. R. Bankr. P.

Background

The essential facts do not appear to be in dispute. Robert and Tambra were divorced pursuant to a Decree of Divorce entered in the Second District Court for Weber County, State of Utah on September 30, 1996, in the case styled, "Tambra Alexander–Kimball, Plaintiff v. Robert B. Kimball, Defendant , Civ. No. 964902306DA". [Doc. 39–1]. They had one child together born on May 23, 1993. [Doc. 39]. Pursuant to the Divorce Decree, Tambra was granted custody of the child, and Robert was to pay child support in the amount of $165.00 per month plus $25.00 each month for the child's medical expenses until the child reached eighteen years of age or until she graduated from high school. [Doc. 39–1]. This amount was never amended or modified. [Doc. 39 ¶ 2].

Over the years Robert made various child support payments, but there is apparently no dispute that he did not make all the monthly payments required. Tambra has filed a Proof of Claim for a priority domestic relations obligation for child support arrearages in the amount of $28,685.00. [Claim # 3–1]. This amount is apparently based upon an Affidavit executed by Tambra that as of the spring of 2015 Robert owed that much child support arrearage. [Doc. 39 ¶ 3]. In Robert's Brief he takes issue with this amount on the basis that under Utah law the statute of limitations for the collection of child support is the longer of four years from the date the child reaches majority or eight years from the entry of a sum certain by a tribunal. Since the child attained majority and graduated from high school in May 2011, child support terminated at that time and Robert would only have been obligated for payments accruing prior to that date.

Robert contends that Tambra cannot enforce child support arrearages any earlier than eight years prior to the filing of the bankruptcy petition, or June 2008, through the child's attainment of majority in May 2011. For that three year time period, the total child support and medical expenses would, according to Robert, have been $6,840.00. [Doc. 39 ¶ 16]. Robert claims that in the eight years prior to the filing of the bankruptcy petition (since June, 2008) he has paid Tambra child support in the amount of $3,030.00. Thus, he asserts that the total amount which he owes her pursuant to her Proof of Claim is $3,810.00. [Doc. 39 ¶ 18].

While Tambra did not file a brief on the statute of limitations question requested by the Court, in her Response to Robert's Objection to Proof of Claim she agreed with Robert that the applicable statute of limitations was eight years under 78b Utah Code § 5–202 [6]:

(a) A child support order or a sum certain judgment for past due support may be enforced:

(i) within four years after the date the youngest child reaches majority; or

(ii) eight years from the date of entry of the sum certain judgment entered by a tribunal.

(b) The longer period of duration shall apply in every order.

(c) A sum certain judgment may be renewed to extend the duration.

In agreeing that the statute of limitations of Utah applies, neither party raises the unsettled and potentially determinative choice-of-law issue presented here. As this Court sees it, the key question is whether this Court should apply the choice-of law rules of the forum state (Oklahoma) in which it sits or the choice-of-law rules of Utah where the child support order was entered and where Tambra and the child reside.

Applicable Law

It is well established that when a federal court sits in diversity, it must look to the forum state's choice of law rules to determine the controlling substantive law. Guaranty Trust Co. v. York , 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) ; Klaxon Co. v. Stentor Electric Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ; Garcia v. International Elevator Co, Inc. , 358 F.3d 777 (10^thCir. 2004) ; New York Life Insurance, Co. v. K N Energy, Inc. , 80 F.3d 405, 409 (10^thCir. 1996). On the other hand, when it comes to an issue of procedural law, the general rule is that the law of the forum state applies. Sun Oil Co. v. Wortman , 486 U.S. 717, 108 S.Ct. 2117, 100 L.Ed.2d 743 (1988) (holding that the Constitution does not bar application of the forum state's statute of limitations to claims governed by the substantive law of a different state). Statutes of limitation are generally regarded as procedural, and thus many federal courts hold that the applicable statute limitations is that of the forum. The Dow Chemical Corp. v. Weevil–Cide Co., Inc. , 897 F.2d 481, 483–84 (10^thCir. 1990) ("A federal court hearing a diversity action applies the statute of limitations which would be applied by a court of the forum state."). In Thornton v. T & W Tire, L . P . , 410 F.Supp.2d 1098, 1101 (W.D. Okla. 2008) the court stated:

"[W]hen the question is which state's limitations period applies, choice of law principles hold that it is ordinarily the limitations period of the forum state which applies rather than the limitations period in the state with the most significant contacts."

For choice of law purposes, Oklahoma regards a statute of limitations as procedural and applies the law of the forum. Trinity Broadcasting Corp. v. Leeco Oil Co. , 1984 OK 80, 692 P.2d 1364 ; Western Natural Gas Co. v. Cities Service Gas Co. , 507 P.2d 1236 (Okla. 1972) ; Masquat v. DaimlerChrysler Corp. , 2008 OK 67, 195 P.3d 48.

Here, in contrast to a federal court sitting in diversity jurisdiction, we are dealing with a bankruptcy court exercising federal question jurisdiction pursuant to 28 U.S.C. §§ 1334 and 157(b)(2)(B). The U.S. Supreme Court has never extended its holding in Klaxon applying the choice-of-law rules of the forum state in diversity cases to cases involving bankruptcy courts. Courts are divided on the issue of whether bankruptcy courts should apply the choice-of-law rules of the forum state or those of federal common law. The Second, Third, Fourth and Eighth Circuits have held that a bankruptcy court should apply the choice-of-law rules of the forum state in which it sits. In re Teleglobe Communications , 493 F.3d 345, 358 (3^rdCir. 2007) ; In re Payless Cashway , 203 F.3d 1081, 1084 (8^thCir. 2000) ; In re Gaston & Snow , 243 F.3d 599, 601–02 (2^ndCir. 2001) ; In re Merritt Dredging Co., Inc. , 839 F.2d 203, 206 (4^thCir. 1988) (noting that "the argument for applying the Klaxon rule to state law questions arising in bankruptcy cases is compelling.").

On the other hand, the Seventh, Ninth and Tenth Circuits have held that the choice of law or rules of the forum state generally are irrelevant in answering choice of law questions in federal question cases. Berger v. AXA Network LLC , 459 F.3d 804, 810 (7^thCir. 2006) ; Liberty Tool & Mfg. v. Vortex Fishing Systems, Inc. (In re Vortex Fishing Systems, Inc.) , 277 F.3d 1057, 1069 (9^thCir. 2002) ; Lindsay v. Beneficial Reinsurance Co. (In re Lindsey) , 59 F.3d 942, 948 (9^thCir. 1995) ("In federal question cases with exclusive jurisdiction in federal court, such as bankruptcy, the court should apply federal, not forum state, choice of law rules."); Sterba v. PNC Bank (In re Sterba) 516 B.R. 579 (9^thCir. BAP 2014).

The Tenth Circuit has held that where jurisdiction is not based on diversity of citizenship, federal common law choice-of-law rules apply. Federal common law follows the approach outlined in the Restatement (Second) of Conflict of Laws . In Held v. Manufacturers Hanover Leasing Corp. , 912 F.2d 1197, 1202–03 (10^thCir. 1990), the Tenth Circuit adopted the statute of limitations choice-of-law provision of the Restatement (Second) of Conflict of Laws § 142 stating:

"Instead, we adopt § 142 of the Restatement as the means of determining which state's statute of limitation applies when a federal statute that is the basis of a claim does

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