In re Markizer, Bankruptcy No. 86-03080-BKC-SMW

• Decision Date: 18 November 1986
• Docket Number: Adv. No. 86-0656-BKC-SMW.,Bankruptcy No. 86-03080-BKC-SMW
• Citation: 66 BR 1014
• Parties: In re Moises MARKIZER, Debtor. Moises MARKIZER, Plaintiff, v. Zoraida Markizer ECONOMOPOULOS, Defendant.
• Court: U.S. Bankruptcy Court — Southern District of Florida

66 B.R. 1014 (1986)

In re Moises MARKIZER, Debtor Moises MARKIZER, Plaintiff, v. Zoraida Markizer ECONOMOPOULOS, Defendant.

Bankruptcy No. 86-03080-BKC-SMW, Adv. No. 86-0656-BKC-SMW.

United States Bankruptcy Court, S.D. Florida.

November 18, 1986.

John W. Kozyak, Kozyak, Tropin & Throckmorton, P.A., Miami, Fla., for plaintiff/debtor Moises Markizer.

Rex B. Guthrie, Miami, Fla., James V. Johnstone, Maro and Johnstone, Coral Gables, Fla., and Robert Venney, Shutts & Bowen, Miami, Fla., for defendant.

Jeannette Tavormina, Trustee.

Arthur S. Weitzner, Weitzner & Gamberg, P.A., Miami, Fla., for trustee.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SIDNEY M. WEAVER, Bankruptcy Judge.

THIS CAUSE having come on to be heard upon a Complaint to Determine Dischargeability of Debt under 11 U.S.C. Section 523(a)(5)(B) and Bankruptcy Rule 4007 and on a three count counterclaim, which urged this Court to abstain, to declare that a Florida corporation, Ardiyos Corporation, in which the debtor held a fifty percent ownership interest on the date of the filing, was not subject to this Court's jurisdiction, and to dismiss the petition due to the debtor's alleged failure to comply with 11 U.S.C. Section 727. The adversary complaint was filed on October 3, 1986 and tried with the counterclaim on October 24, 1986. The Court having heard the testimony and examined the evidence presented; observed the candor and demeanor of the witnesses; considered the arguments and trial memoranda of counsel and being otherwise fully advised in the premises, does hereby make the following Findings of Fact and Conclusions of Law.

This Court has jurisdiction over the parties and the subject matter.

The Plaintiff, Moises Markizer, and the Defendant, Zoraida Markizer Economopoulos, entered into a Child Custody and Property Settlement Agreement on January 24, 1986 in anticipation of their marriage being dissolved on January 30, 1986 in an uncontested proceeding in a Florida state court. The settlement agreement was modified on March 7, 1986. The agreement granted the Plaintiff residential custody of the one minor child, a sixteen year old boy, and it is undisputed that the plaintiff has continually provided for the minor son's support and is not seeking, herein, to have this obligation modified or discharged in any manner.

The settlement agreement also provided for the division of a substantial amount of real, personal, and intangible property accumulated during the 24 year marriage. There is no substantial dispute that the Plaintiff complied with the provisions of the settlement agreement regarding the division of real property, bank accounts, furniture, jewelry, and the marital residence and that the Plaintiff did not seek a discharge of his obligation to turnover property, which he previously agreed belonged to his former wife. This property and cash had a value which the Defendant had previously estimated to be in excess of $370,000. There is, and has been, a heated controversy regarding the Plaintiff's obligation relating to the auto parts business, Ardiyos Corporation.

During their marriage, the parties established and developed a substantial auto parts business, which was located upon land they owned jointly, but agreed should be treated as part of the business for purposes of the settlement. The agreement and modification provided for the business to be appraised, listed, and sold. They also provided for the payment of $600 per week to the Defendant as an advance on the sale proceeds from the business and the maintenance of health insurance for the Defendant and life insurance on the Plaintiff, a policy upon which the wife was a one-half beneficiary, until the business was sold. The minimum sales price of the business, provided in the agreement and modification, was $600,000. It was contemplated and provided that the wife would remain an employee of the company and receive her full salary for approximately three months after the dissolution of their marriage, while she completed her college education. There is no dispute that this salary was paid. The Plaintiff continued to operate the auto parts business until he sought the protection of this Court and filed this adversary complaint seeking a determination that certain provisions of the settlement agreement are not in the nature of alimony, support, or maintenance, but are distributions of property and as such are dischargeable under Section 523(a)(5)(B) of the Bankruptcy Code.

Prior to the institution of the Plaintiff's voluntary bankruptcy, the defendant had filed a motion for contempt in the State Court action to compel compliance with the settlement agreement and for the appointment of a receiver for the auto parts business. The husband agreed to the appointment of a receiver for the auto parts business, due to his disputes with his wife, but an order appointing a receiver was not entered by the State Court until the day after the petition was filed. That State Court order was determined void and of no effect due the Defendant's violation of the automatic stay by this Court's Order Granting Emergency Motion, dated October 14, 1986.

Specifically, Plaintiff seeks a determination that his past and future obligation to pay advance sale proceeds on the eventual sale of the auto parts business is discharged. He does not dispute that his former wife is entitled to a one-half interest in the business when it is eventually sold. In fact, the Plaintiff and his state court lawyer testified at trial that they offered to give the entire auto parts business to his former wife prior to filing his voluntary Chapter 7 petition. He further testified that the business could not be sold for the minimum price of $600,000 and he did not wish to continue paying advance sale proceeds and working in the business until it was sold for a price acceptable to the Defendant.

The Plaintiff also seeks a determination that the obligations to provide health insurance for his former wife and insurance on his life, until the business is sold, are dischargeable.

The issues to be resolved by the Court are: (1) Whether the obligations under the agreement and modification thereto to pay advance sale proceeds on the sale of the business, to provide health insurance and continue the Plaintiff's life insurance naming the wife as an one-half beneficiary represent a disbursement of property between the parties or were intended as alimony, maintenance and support; (2) whether such obligations are dischargeable by the Plaintiff; (3) whether this Court should abstain; (4) whether Ardiyos Corporation was subject to the Court's jurisdiction on the date of filing; and, (5) whether the petition should be dismissed pursuant to 11 U.S.C. § 727.

The settlement agreement provides:

7. ALIMONY. Other than herein contained, no claim for alimony, temporary or permanent, or rehabilitative shall be made by the Wife of the Husband or the Husband of the Wife. This Agreement shall constitute a full release and waiver of all claims as to alimony.

No alimony of any kind other than as herein provided shall be paid to either party. The one-half (½) interest due the Wife upon the sale of the marital assets shall be her sole alimony. Ardiyos Corp., shall continue to employ the Wife until the marital residence is sold or May 1, 1986, whichever comes first. The Wife\'s salary and compensation shall remained sic unchanged. From the date of this Agreement the Wife shall no longer have the power to borrow money from any source whatsoever in the name of Ardiyos Corp. The Husband shall continue as president and manager of Ardiyos Corporation with all powers therein requisite.

* * * * * *

9. BANKRUPTCY. The obligations of this Agreement shall not be subject to discharged sic in bankruptcy.

The March 7, 1986, Modification of Child Custody and Property Settlement Agreement, which dealt only with the disposition of the auto parts business, provided:

Paragraph Two (2). Division of Property, (b) Personal Property. I. Ardiyos Corporation, dated January 24, 1986 and incorporated in the Final Judgment Dissolving Marriage, dated January 30, 1986, shall read as follows:

"During the years of the marriage the parties built a substantial automotive parts business known as Ardiyos Corporation, also d/b/a General Auto Parts Distributors. The stock for the corporation is equally owned by the parties. As to Ardiyos Corporation, the parties agree as follows: The land upon which the business is located shall be construed as a part of the business even though the Deed for the land is in the name of the Husband/Wife. The business shall be appraised by a licensed appraiser, to be selected by the wife, as soon as possible, but in no event later than thirty (30) days from the date of this Agreement. The cost of the appraisal shall be paid by Ardiyos Corporation. The listing agreement, currently in effect shall be modified to reflect the precise sale price determined by the appraisal. In all events the minimum purchase/sale price shall be Six Hundred Thousand ($600,000.00) Dollars. The net proceeds of the sale shall be evenly divided between the parties, subject to all other terms and conditions of this agreement. In the event the business is not sold prior to May 1, 1986, the husband shall pay to the wife as an advance on the sale proceeds the sum of Six Hundred ($600.00) Dollars per week. In the event the business is not sold at the appraised price or any other price in excess of Six Hundred Thousand ($600,000.00) Dollars, within one (1) year from May 1, 1986 the husband or wife shall have the absolute right to purchase the others sic share for the fixed price of Three Hundred Thousand ($300,000.00) Dollars, payable Six Hundred ($600.00) per week with no interest. Said sum may be prepaid at any time. In no event may either party sell their undivided interest to any third party without express consent of the other."

The Plaintiff maintains that the obligations to pay...