In re Rappleye, Bankruptcy No. 95-60100
| Decision Date | 28 May 1997 |
| Docket Number | Bankruptcy No. 95-60100,Adversary No. 95-6025. |
| Parties | In re George Bryce RAPPLEYE, Debtor. Marilyn JOHNSON, Plaintiff, v. George Bryce RAPPLEYE, Defendant. |
| Court | United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — Western District of Missouri |
COPYRIGHT MATERIAL OMITTED
J. Kevin Checkett, Checkett & Pauly, Carthage, MO, for Plaintiff.
Dan R. Nelson, Fitzsimmons, Schroeder & Nelson, Springfield, MO, for Defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND MEMORANDUM OPINION
Defendant-Debtor George Bryce Rappleye filed a Chapter 7 petition seeking to discharge, among other debts, obligations owed to his former wife, plaintiff Marilyn Johnson, as a result of a Decree of Dissolution of Marriage entered by a Utah state court. Plaintiff filed a timely complaint to determine dischargeability of debt pursuant to 11 U.S.C. § 523(a)(5) and (15). Appearances at trial were: Plaintiff, in person and by counsel J. Kevin Checkett; Debtor, in person and by counsel Dan Nelson. After hearing the evidence and arguments, the court finds Debtor's obligations to Plaintiff are nondischargeable. The court has jurisdiction over this core proceeding and may enter final orders pursuant to 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(b)(2)(A),(I),(J) and (O).
These findings and conclusions are consistent with those made on the record at the end of the hearing and in a supplemental record, which shall be incorporated herein, but due to additional review of the record, they may modify oral findings. Any findings of fact designated in error as conclusions of law shall be deemed findings of fact; any conclusions of law designated in error as findings of fact shall be deemed conclusions of law.
These parties married in their fifties and divorced after approximately five years. Plaintiff had been married previously for more than 20 years to a doctor in the Air Force. She and her former spouse had six children. In the dissolution of that marriage, Plaintiff received a modest pension of $1,180 per month.
Prior to Debtor's 1995 bankruptcy filing in Missouri, the Fourth Judicial District Court of Wasatch County, Utah entered a Decree of Dissolution of Marriage between Debtor and Plaintiff in 1991. Pursuant to the Decree, Debtor was to pay a total of approximately $206,000 to Plaintiff, including $5,000 for Plaintiff's attorney's fees. Debtor failed to pay any of these obligations.
During the marriage of Plaintiff Marilyn Johnson and Debtor George Rappleye, which lasted only about five years, the parties had both separate and joint property, and separate property which was commingled and converted to joint or marital property. For example, at the time of the marriage Debtor owned a hardware store. When Debtor and Plaintiff married, Plaintiff cashed in her Air Force pension benefit, her primary asset, and contributed the $50,000 in proceeds to the hardware business that she and Debtor jointly operated during their marriage. In the dissolution of marriage proceedings, the state court judge found the hardware business was marital property. As will be discussed below, the business was lucrative.
During the marriage, plaintiff was unemployed except for her work without salary in the hardware store. As found in the dissolution proceeding, she was 55 years old and had limited education, training and job experience. Before the marriage, she had $1,180.00 per month income from the Air Force pension that she cashed in and contributed to the hardware store. At and after the dissolution, Plaintiff's income was only $800 per month. In contrast, Debtor was 56, in good health, and had years of business and work experience. He owned at least two lucrative businesses, including the hardware store (which the state court held had been converted to marital property) and a hosiery business in California. In the dissolution, he received one half of the proceeds of sale of the hardware business, which totaled approximately $182,000. He had retired and was not gainfully employed, but in order to pay his monthly expenses of $1,875.00, he could look to the hardware store sale proceeds and income of $25,000 per year from the hosiery business. When Debtor began the hardware business in 1981, before the marriage, he earned $15,000 per year from the business, and could earn at least that much and most likely significantly more based on his experience and knowledge, as found by the Utah state court. In 1992, after the dissolution proceeding, Debtor's income was $78,752.00. After that, his income allegedly dropped to virtually zero when he became a stake missionary.
The state court divided the hardware store proceeds of approximately $182,000 equally and entered the judgment for it as alimony, divided an account evenly so that Plaintiff received $58,000, and awarded her attorney fees. It also appears Plaintiff was awarded $800 per month support for two years. Debtor appealed the decision, which was substantially affirmed, and then retried the matter. During the proceedings, Debtor made a fraudulent transfer of real property to his son, which the court voided. In violation of the court's order, Debtor dissipated a Merrill Lynch account by writing checks to family members and friends. At one time, it appears the account had in excess of $300,000.
Debtor and Plaintiff are both members of the Mormon church, and Debtor now lives in Branson, Missouri, where he has volunteered to serve as a full-time lay missionary, known as a "stake missionary." This position produces no income, and Debtor claims he now has no income and lives off the charity of friends. Plaintiff works as a church secretary and rents out a room in her home for extra income.
On February 13, 1995, Debtor filed a Chapter 7 bankruptcy seeking discharge of his debts, including that owed to Plaintiff, which was listed in the schedules at $216,011.47. Other than the debt to plaintiff, most of the other scheduled debts were for attorney fees to numerous attorneys. In addition, two friends, Brandy and Charles Nichol, were listed with two unspecified claims totaling $11,200.00. At trial, Debtor testified the Nichols' debts were for helping him prepare court documents.
11 U.S.C.A. § 523(a)(5)(1994) provides, in pertinent part, that:
The issues to be decided before this court are judged by the standard of preponderance of evidence. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).
The evidence indicates the awards made to Plaintiff and ordered to be paid by Debtor were intended as support. While the court does not disregard the Decree Of Dissolution Of Marriage issued by the Utah state court, nothing in the Decree is conclusive on the issues tried by the Bankruptcy Court. See In re Williams, 703 F.2d 1055 (8th Cir.1983); In re Ianke, 185 B.R. 297 (Bankr.E.D.Mo.1995). A statement in a decree of dissolution of marriage that neither party is awarded support is not a limiting factor binding on the bankruptcy court. See, Holliday v. Kline, 65 F.3d 749 (8th Cir.1995); In re Williams, 703 F.2d 1055 (8th Cir.1983). This court's findings are consistent with the findings of the Fourth Judicial District Court of Wasatch County, Utah.
The doctrine of collateral estoppel prevents relitigation of an issue in a later lawsuit by the party against whom the issue was decided in the previous adjudication. Swapshire v. Baer, 865 F.2d 948, 950 (8th Cir.1989). The elements of collateral estoppel are: 1) the issue decided in the prior adjudication is identical to the issue in the present case; 2) the prior adjudication resulted in a judgment on the merits; 3) the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior lawsuit; and 4) the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the previous suit. Swapshire, 865 F.2d at 951, citing Oates v. Safeco Ins. Co. of America, 583 S.W.2d 713 (Mo.1979). The elements of collateral estoppel are satisfied in the present case regarding the support nature of the award.
The issues in this adversary action as to division of marital property and debts, and determination of awards in the nature of support, are the same as those comprehensively and thoroughly litigated throughout the Utah court system by these same parties. Plaintiff presented credible testimony and evidence before this court that the exhibits presented and accepted into evidence in this proceeding were used before the courts in Utah to determine the support issue. The decision by the District Court of Wasatch County, Utah on retrial, which was a decision on the merits, makes clear that the obligations of Debtor to Plaintiff were for her support. Debtor had a full and fair opportunity to litigate all the issues in the Utah state courts, and in fact has availed himself of the opportunities to engage in extensive litigation in Utah.
Even without the benefit of the doctrine of collateral estoppel, this court's ruling in favor of Plaintiff and against Debtor would be the same. The court has considered the numerous factors set forth in In re Soval, 71 B.R. 690, 692 (Bankr.E.D.Mo.1987), in determining the dischargeability under § 523(a)(5) of the debt owed Plaintiff by Debtor. Plaintiff has met the burden of proof under the Soval analysis to show that the obligations ordered by the Utah court to be paid by Debtor to Plaintiff or for her benefit were intended to have a support function and are, therefore, nondischargeable obligations under § 523(...
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