In re Prensky

Citation416 B.R. 406
Decision Date02 November 2009
Docket NumberAdversary No. 08-1303 (MBK).,Bankruptcy No. 08-10428 (RG).
PartiesIn re Joshua M. PRENSKY, Debtor. Clair, Griefer LLP, Plaintiff, pro se v. Joshua M. Prensky, Defendant.
CourtU.S. Bankruptcy Court — District of New Jersey

Joseph DeSimone, Esq. Clair, Griefer LLP, New York, NY, for Plaintiff, Pro se.

Avrom R. Vann, Esq., Fair Lawn, NJ, for Defendant, Joshua M. Prensky.

OPINION

MICHAEL B. KAPLAN, Bankruptcy Judge.

I. JURISDICTION

The court has jurisdiction over this contested matter under 28 U.S.C. §§ 1334(a) and 157(b) and the Standing Order of the United States District Court dated July 10, 1984 referring all bankruptcy cases to the bankruptcy court. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(I). Venue is proper in this Court pursuant to 28 U.S.C. § 1409(a). The statutory predicate for the relief sought herein is 11 U.S.C. § 523(a)(15)1. The following constitutes the Court's findings of fact and conclusions of law as required by Fed. R. Bankr.P. 7052.2

II. FACTS AND PROCEDURAL HISTORY

Joshua Prensky ("Debtor") and Miriam Prensky ("Ms.Prensky") were married on September 4, 2000. On April 1, 2005, Debtor commenced a divorce action against Ms. Prensky in the New York State Supreme Court. The divorce action was initially venued in Nassau County and transferred subsequently to New York County on July 21, 2005. At all times, Ms. Prensky was represented by the Plaintiff, Clair Griefer, LLP ("CG, LLP").

A trial regarding the divorce action took place on November 27, 29, and 30, 2006 and on May 7 and 9, 2007. On November 5, 2007, Judge Evans of the New York State Supreme Court issued a Decision and Order (the "Order") and the parties were divorced by way of a corresponding Judgment of Divorce dated December 12, 2007. Ms. Prensky had petitioned the court for an award of legal fees in the divorce action. The trial court awarded counsel fees and the Order stated as follows:

"[Miriam Prensky] is the less monied spouse. Her application for attorney's fees has merit as [Debtor's] actions unnecessarily prolonged this litigation without regard to the financial impact of his conduct. From the inception of this case in an improper venue, money was squandered. [Debtor] initiated the action in Nassau County, necessitating a change of venue to New York County, the location of the marital residence and their children's school, the county in which [Miriam Prensky] works and where [Debtor] attended dental school. [Debtor] violated the court's pendente lite order by failing to pay the rent for the marital residence, thereby necessitating enforcement motions and ultimately a contempt hearing. Additionally, he prolonged discovery by withholding relevant documents. [Debtor] and his family members were not forthcoming when called to testify at third party deposition, thereby causing unnecessary expense and delay.

* * *

After reviewing the billing records, I find that [Miriam Prensky] is entitled to counsel fees from plaintiff in the amount of $85,000, a sum that is calculated to level the playing field in the context of this unnecessarily prolonged litigation. This sum shall be paid directly to [Miriam Prensky's] counsel in three equal installments, the first of which shall be paid on or before April 1, 2008. The two subsequent payments shall be made on July 1, 2008 and September 1, 2008."

The Debtor filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code on January 10, 2008, and was granted a discharge on April 11, 2008, pursuant to 11 U.S.C. § 727. Debtor did not make any payments to CG, LLP as required by the Order. On April 8, 2008, CG, LLP filed an adversary complaint seeking to except the debt owed to them by Debtor from discharge pursuant to 11.U.S.C. § 523(a)(15). CG, LLP subsequently filed a Motion for Summary Judgment seeking judgment in favor of CG, LLP in the amount of $85,000, plus interest, attorney's fees, and other charges due. Debtor cross-moved for summary judgment on grounds that CG, LLP lacked standing to contest the dischargeability of the fees, contending that CG, LLP is not a "spouse, former spouse or child" as required under 11 U.S.C. § 523(a)(15) and that Plaintiff failed to establish that the attorneys' fees were in the nature of support.3 The parties appeared for oral argument on August 6, 2009, and were asked to submit supplemental letter briefs supporting their respective positions in light of case law cited by the Court. After consideration of the submissions and the record, for the reasons discussed below, summary judgment is granted in favor of CG, LLP and Debtor's cross-motion for summary judgment is denied.

III. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). As the Supreme Court has indicated, "Summary Judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather an integral part of the Federal Rules as a whole which are designed to secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In deciding a motion for summary judgment, the judge's function is to determine if there is a genuine issue for trial. Josey v. John R. Hollingsworth Corp., 996 F.2d 632, 637 (3d Cir. 1993).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Huang v. BP Amoco Corp., 271 F.3d 560, 564 (3d Cir.2001) (citing Celotex Corp., supra, 477 U.S. at 323, 106 S.Ct. 2548). In determining whether a factual dispute warranting trial exists, the court must view the record evidence and the summary judgment submissions in the light most favorable to the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Issues of material fact are those "that might affect the outcome of the suit under the governing law." Id. at 248, 106 S.Ct. 2505. An issue is genuine when it is "triable," that is, when reasonable minds could disagree on the result. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted). If the moving party will bear the burden of persuasion at trial, the party must support its motion with credible evidence-using any of the materials specified in Rule 56(c)that would entitle it to a directed verdict if nor controverted at trial. Celotex Corp., supra, 477 U.S. at 331, 106 S.Ct. 2548. Such an affirmative showing shifts the "burden of production" to the party opposing the motion and requires the party to either demonstrate the existence of a "genuine issue" for trial or to request additional time for discovery under Rule 56(f). Fed.R.Civ.P. 56(e).

Once the moving party establishes the absence of a genuine issue of material fact, however, the burden shifts to the non-moving party to "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. A party may not defeat a motion for summary judgment unless it sets forth specific facts, in a form that "would be admissible in evidence," establishing the existence of a genuine issue of material fact for trial. Fed.R.Civ.P. 56(e) (providing that in response to a summary judgment motion the "adverse party may not rest upon the mere allegations or denials of [its] pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial"). See also Fireman's Ins. Co. of Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982); Olympic Junior, Inc. v. David Crystal, Inc., 463 F.2d 1141, 1146 (3d Cir. 1972). If the nonmoving party's evidence is a mere scintilla or is not "significantly probative," the court may grant summary judgment. Liberty Lobby, Inc., supra, 477 U.S. at 249-250, 106 S.Ct. 2505. The non-movant will prevail only if the evidence produced is of "sufficient quantum and quality" to allow a rational and fair-minded fact finder to return a verdict in his favor, bearing in mind the applicable standard of proof that would apply at trial on the merits. Id. at 249, 106 S.Ct. 2505. The submissions of both parties note the absence of disputed facts and urge the Court to determine this matter at this stage of the proceedings.

IV. OPINION

11 U.S.C. § 523(a)(15) provides, in pertinent part, that:

"a discharge under section 727 of this title does not discharge an individual debtor from any debt to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit."

Likewise, paragraph (5) of § 523(a) states that a discharge under § 727 of the Code does not discharge an individual debtor from any debt for a "domestic support obligation" as that term is defined in 11 U.S.C. § 101(14A). Prior to the enactment of BAPCPA in 2005, § 523(a)(15) included a requirement that the debtor have an "ability to pay" the debt. However, BAPCPA modified § 523(a)(15) to remove, among other things, the "ability to pay" component, thereby no longer conditioning the discharge of debts of the nature described in § 523(a)(15) upon the Debtor's ability to pay. The issue before the Court is whether attorneys fees awarded to a spouse, but payable directly to her law firm, are dischargeable under 11 U.S.C. § 523(a)(15).4

The Debtor argues that the debt is dischargeable because CG, LLP lacks standing to pursue its claim, as it...

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    ...are payable directly to the attorney are likewise non-dischargeable. Gruber, 436 B.R. at 44 ; accord Clair Griefer LLP v. Prensky (In re Prensky), 416 B.R. 406, 410-11 (Bankr. D.N.J. 2009). Ordinarily, QDROs should be utilized to enforce counsel and expert fee awards only when other assets ......
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