In re Poffenbarger

• Decision Date: 25 March 2002
• Docket Number: No. 01-16096.,01-16096.
• Citation: 281 B.R. 379
• Parties: In re Vera Arlene POFFENBARGER, Debtor.
• Court: U.S. Bankruptcy Court — Southern District of Alabama

281 B.R. 379

In re Vera Arlene POFFENBARGER, Debtor.

No. 01-16096.

United States Bankruptcy Court, S.D. Alabama.

March 25, 2002.

COPYRIGHT MATERIAL OMITTED

Franklin V. Anderson, Mobile, AL, for the Debtor.

Mark Zimlich, Mobile, AL, for the Bankruptcy Administrator.

Lionel Williams, Mobile, AL, for the Chapter 7 Trustee.

ORDER GRANTING DEBTOR'S MOTION TO DETERMINE OWNERSHIP OF FUNDS, DENYING DEBTOR'S ATTORNEY'S MOTION FOR ADDITIONAL ATTORNEYS FEES OUT OF PAST DUE ALIMONY, DENYING MOTION TO CLAIM AS EXEMPT PAST DUE ALIMONY, MOOTING MOTION TO CLAIM AS EXEMPT PAST DUE AND FUTURE CHILD SUPPORT, AND GRANTING IN PART AND DENYING IN PART TRUSTEE'S MOTION FOR TURNOVER

MARGARET A. MAHONEY, Chief Judge.

This case is before the Court on the motion of the debtor to determine ownership, exemption and distribution of postpetition collection of pre- and postpetition child support, and for the allowance of additional attorneys fees for debtor's attorney, and on the motion of the chapter 7 trustee for an order compelling the debtor and her attorney to turn over all funds at issue to the Trustee. This Court has jurisdiction to hear these matters pursuant to 28 U.S.C. §§ 157 and 1334 and the Order of Reference of the District Court. This is a core proceeding pursuant to 28 U.S.C. § 157(b) and this Court has the authority to enter a final order. For the reasons indicated and as more particularly set forth below, the Court is granting debtor's motion to determine ownership of funds, is denying debtor's attorney's request for additional attorneys fees out of past due alimony, is denying debtor's motion to claim as exempt funds representing past due alimony, is mooting debtor's motion to claim as exempt funds representing past due and future child support, and is granting in part and denying in part the Trustee's motion for turnover.

FACTS AND PROCEDURAL HISTORY

The debtor, Vera Arlene Poffenbarger, filed this chapter 7 bankruptcy proceeding on November 30, 1991.¹ On Schedule B, "Personal Property," the debtor listed "alimony" and "back child support" under paragraph 16 entitled "[a]limony, maintenance, support, and property settlements to which the debtor is or may be entitled." Under the words "alimony" and "back child support" on Schedule B, the debtor lists "Kenneth M. Poffenbarger." Kenneth Poffenbarger is the debtor's ex-husband (see, e.g., Exhibits 2, 5) and is the person who owes child support and alimony to the debtor. As to the alimony, Schedule B lists "5200" in the column entitled "current market value of debtor's interest in property without secured claim or exemption." As to the back child support, debtor lists "5816" in this column. Thus, the debtor apparently claims a total due of $11,016 for back child support and alimony. The debtor's Statement of Financial Affairs shows "income" in the years 2000 and 2001 for alimony and child support as follows:

                    AMOUNT                    SOURCE
                    $ 1,800.00   2001 alimony net of 2000 atty fees paid
                    $ 7,194.00   2000 alimony
                    $ 3,921.00   2001 child support of 9900 due
                    $10,254.00   2000 child support of 10800 due
                

(Statement of Financial Affairs, p. 1, ¶ 2). The debtor's Statement of Financial Affairs and Amended Statement of Financial Affairs (the Amendment was filed December 10, 2001) lists the prepetition divorce action (i.e., Poffenbarger v. Poffenbarger) and shows the nature of the proceeding as "collect cs/alimony."

On January 31, 2002, the debtor filed a Motion to Determine Ownership, Exemption and Distribution of Post-Petition Collection of Pre- and Post-Petition Child Support, and for Allowance of Additional Attorney Fees for Debtor's Attorney. The debtor's motion alleges in part as follows:

Debtor's former husband caused to be issued through the State of Alabama a check to the debtor in the amount of $6,862.75 dated January 22, 2002. That check is being held by the debtor's attorney for the convenience of the parties until otherwise directed.

(Motion, ¶ 3). The motion also alleges that the debtor is entitled to a total of $11,016 in prepetition past due child support and alimony. (Motion, ¶ 1). The debtor asks the Court to determine ownership of the funds received and requests that debtor's counsel be awarded reasonable attorneys fees out of these funds. (Motion, ¶¶ 4, 5).

The Bankruptcy Administrator ("BA") filed a response to the debtor's motion on February 5, 2002. The BA's position is that "the funds being held by debtor's attorney represent a prepetition, nonexempt receivable, and should be turned over to the trustee pursuant to 11 U.S.C. § 542(a)." (BA's Response, ¶ 1). The BA contends that additional attorneys fees should not be awarded to debtor's counsel under In re American Steel Product, 197 F.3d 1354 (11th Cir.1999), because debtor's counsel is not a "professional person" employed by the estate under 11 U.S.C. § 330. (BA's Response, ¶ 2). Proper notice of the debtor's motion was given on February 6, 2002. On February 25, 2002, the chapter 7 trustee, Lynn Harwell, through her attorney, Lionel Williams, filed a response to the debtor's motion.² The chapter 7 trustee adopts the BA's position and requests that the Court, pursuant to § 542(a), issue a turnover order with respect to the funds being held.

The Court held a hearing on the motions on March 5, 2002. The debtor, Vera Poffenbarger, testified at the hearing and several exhibits were introduced. The evidence establishes the following facts pertinent to the motions before the Court:

The debtor married Kenneth Poffenbarger in 1993. They have two children who now live with the debtor. They were divorced in 1999. The debtor's ex-husband was ordered to pay child support of $900 per month, which is due on the 1st of each month; he made some payments, but then stopped. According to debtor, approximately $5,000 of back child support was due at the time her bankruptcy petition was filed.

The debtor (a nonlawyer) testified that she did not claim the back support and alimony as "exempt" because it was her understanding that the law does not allow her to "exempt" these items. Her bankruptcy filing was due at least in part to credit card charges that her husband ran up. The debtor was a co-signatory on these credit card accounts, and her husband had used these cards for a business that he started in 1998. According to the debtor, these cards had a zero balance at the time she parted from her ex-husband.

During the Poffenbarger's marriage, the debtor was taking classes toward a nursing degree. However, after the divorce, with Mr. Poffenbarger's failure to pay support, she has had to work. The debtor has worked as a school bus driver for Adams Middle School. She has also waited tables. She has not had time to study for the nursing certification exam because she is so busy with whatever jobs she can find to make ends meet. She has failed the nursing exam once. She receives food stamps and lives on a gross income of approximately $804 per month. She has not received any child support payments since August 2000. If she had the child support payments, she would use this money for her children. Her children are twin minors.

The debtor received a check in January 2002 from the State of Alabama in the amount of $6,862.75. The check is dated January 22, 2002. The debtor brought the check to her attorney, Franklin V. Anderson, who held the check. The debtor was not sure how the State received the money represented by the check, but testified that her ex-husband said he paid the money to DHR (i.e., Department of Human Resources) since he knew that the debtor had "turned the matter over" to DHR.

Several exhibits were introduced into evidence at the March 5, 2002 hearing. Exhibit 3 is a letter dated May 21, 2001 to Ms. Poffenbarger from Ms. Poffenbarger's divorce attorney, Frances Niccolai. According to this letter — which enclosed a copy of an order from the Mobile County Circuit Court in Ms. Poffenbarger's divorce action — "The back alimony is to be paid directly to you." Exhibit 2 is a copy of a May 14, 2001 order from the Mobile County Circuit Court in Poffenbarger v. Poffenbarger, DR99-502738.10-B, which provides in pertinent part that Ms. Poffenbarger is awarded a judgment against Mr. Poffenbarger as follows: (1) $500 "representing the total child support arrearage as of May 7, 2001" to be satisfied at the rate of $100 per month payable through the Accounts Clerk of the Circuit Court; (2) $8,100 "representing unpaid alimony pursuant to the previous orders of the Court"; and (3) $157 "representing unpaid medical reimbursements as required by the previous orders of the Court." (Exhibit 2.)

Exhibit 5 is a copy of an order of the Circuit Court of Mobile County in DR-99-502738.01-B dated October 5, 2001 which among other things: (1) awarded a judgment to Ms. Poffenbarger for $4,019.61, "said amount representing the total child support arrearage as of September 30, 2001, exclusive of interest"; (2) ordered that child support payments made under a wage withholding order to be paid to "Alabama Child Support Payment Center, P.O. Box 244015, Montgomery, Alabama 36124-4015, (phone: 1-877-774-9513). In the event either party has been assisted by the Department of Human Resources and/or Assistant Attorney General (State of Alabama attorney), then said payments are to be paid through the Alabama Child Support Payment Center, P.O. Box 244015, Montgomery, Alabama 36124-4015, (Phone: 1-877-774-9513)"; and, (3) ordered "[a]ll other child support payments shall be made payable through the Account's Clerk Office, 205 Government Street, Mobile, Alabama 36644-2114." (Exhibit 5.)³

Exhibit 4 is a copy of a disbursement statement signed by the debtor dated October 25, 2001. It shows that Ms. Poffenbarger received a net amount of $3,024.73 after payment of attorneys fees and costs from garnishment of a Regions Bank account. The Mobile County Circuit Court's October 5, 2001 order (i.e., Exhibit 5) ordered the...