In re Rosenbaum

• Decision Date: 08 February 1993
• Docket Number: Adv. No. 91-3128.,No. 91-32163,Civ. No. 3-92-0627,91-32163
• Parties: In re Curtis Lee ROSENBAUM, Debtor. Curtis Lee ROSENBAUM, Appellant, v. Pamela Greenwood Rosenbaum Fulghum CUMMINGS, Appellee.
• Court: U.S. District Court — Eastern District of Tennessee

150 B.R. 994 (1993)

In re Curtis Lee ROSENBAUM, Debtor.

Curtis Lee ROSENBAUM, Appellant, v. Pamela Greenwood Rosenbaum Fulghum CUMMINGS, Appellee.

No. 91-32163, Civ. No. 3-92-0627, Adv. No. 91-3128.

United States District Court, E.D. Tennessee, at Knoxville.

February 8, 1993.

Hodges, Doughty & Carson, Thomas H. Dickenson, Knoxville, TN, for appellant/debtor.

Layman, O'Connor, Petty & Child, Charles H. Child, Knoxville, TN, for appellee.

MEMORANDUM OPINION

JARVIS, Chief Judge.

This is an appeal from an order of the bankruptcy court. Jurisdiction over this appeal is based on 28 U.S.C. §§ 158(a) and (d) and is not in dispute. The bankruptcy court held that the debtor was barred by principles of res judicata from asserting that certain support obligations are dischargeable in this bankruptcy proceeding. 150 B.R. 990. The findings of fact of the bankruptcy court may only be reversed for clear error. See Bankr.R. 8013; Hardin v. Caldwell (In re Caldwell), 851 F.2d 852, 857 (6th Cir.1988). Its conclusions of law are reviewed de novo. See Hardin, 851 F.2d at 857. For the reasons that follow, the order of the bankruptcy court will be affirmed.

The debtor, Curtis Rosenbaum ("Rosenbaum"), and the appellee, Pamela Cummings ("Cummings"), were married on March 22, 1979 in Roanoke, Virginia. They separated 14 months later on May 21, 1980. After Cummings filed for divorce, the Virginia state court ordered Rosenbaum to pay Cummings "temporary spousal support" of $2,000 per month. This order was dated July 8, 1980.

The parties entered into a separation agreement on May 22, 1981, which adopted the provisions of the temporary spousal support order. The agreement provided that the monthly support payments would continue until either Rosenbaum died or Cummings remarried. The parties were granted a divorce on March 29, 1982. The final decree of divorce was entered on June 10, 1982, and provided for the continuation of temporary spousal support in accordance with the terms of the separation agreement, which was filed and made part of the record by the final decree of divorce. The decree further provided that the temporary spousal support order would remain in effect until further order of the court.

Rosenbaum filed a voluntary Chapter 7 petition in the Bankruptcy Court for the Western District of Virginia on June 9, 1982, one day before the final decree of divorce was entered. On the advice of his bankruptcy attorney, Rosenbaum did not schedule his support obligation to Cummings, notwithstanding the facts that the separation agreement had been in effect for over one year and the temporary spousal support order had been in effect for almost two years. Rosenbaum ultimately received a discharge in his Virginia bankruptcy case. Cummings was later forced to file numerous actions between 1983 and 1989 in the Virginia state courts, seeking to enforce the monthly obligations imposed upon Rosenbaum under the July 8, 1980 support order, the May 22, 1981 separation agreement, and the June 10, 1982 divorce decree.¹ Rosenbaum was represented by counsel in at least four of these proceedings. Cummings remarried in 1989, and Rosenbaum's obligation to pay spousal support was therefore terminated under the terms of the separation agreement and the divorce decree. Consequently, the debt Rosenbaum seeks to discharge in this bankruptcy action is solely for arrearages, which, at the time of the bankruptcy court's decision, approximated $230,000.

Rosenbaum filed his current Chapter 7 petition in the Bankruptcy Court for the Eastern District of Tennessee on April 24, 1991. He filed an adversary proceeding against Cummings on June 18, 1991, asking the bankruptcy court to determine whether or not his obligations under the separation agreement and the Virginia divorce decree are dischargeable or excepted from discharge pursuant to § 523(a)(5) of the Bankruptcy Code.

Section 523(a)(5) of the Code provides an exception to discharge of unassigned debts owed to a spouse, former spouse, or child of the debtor, which debts are "actually in the nature of alimony, maintenance or support" and arise "in connection with a separation agreement. . . ." What constitutes alimony, maintenance, or support will be determined under the bankruptcy laws, not state law. See Long v. Calhoun (In re Calhoun), 715 F.2d 1103, 1107 (6th Cir. 1983). But the courts often look to state law in determining whether an actual duty of support has been imposed. Id.

It is undisputed that Rosenbaum never sought to have the support obligations discharged in the Virginia bankruptcy case; nor did he raise discharge in bankruptcy as an affirmative defense during the state court proceedings brought by Cummings to enforce the support obligations. Rosenbaum thus argues that his failure to raise this point in the Virginia state court proceedings does not preclude consideration of the dischargeability issue by the bankruptcy court. The bankruptcy court rejected Rosenbaum's argument, holding that his failure to raise the dischargeability issue in the Virginia proceedings forever bars him from asserting that the debt, which was incurred before he filed the Virginia bankruptcy petition, is dischargeable.

Res judicata, or claim preclusion, bars the re-litigation of issues which are actually litigated or which could have been litigated in a previous lawsuit involving the same parties or their privies. See Federated Dept. Stores v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981); Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980). In order for a federal court to give preclusive effect to a state court judgment affecting a federal right, however, the state court must have concurrent jurisdiction over the federal question. See Allen, 449 U.S. at 97-98, 101 S.Ct. at 416; Aurre v. Kalaigan (In re Aurre), 60 B.R. 621, 624 (Bankr.S.D.N.Y.1986). Although there has been some confusion on this issue, it is now clear that bankruptcy courts and state courts have concurrent jurisdiction to determine whether a debt is excepted from discharge under § 523(a)(5). Aurre, 60 B.R. at 624. In this context, res judicata "issues only arise from post-bankruptcy actions to enforce a pre-petition debt." Id.²

The bankruptcy court in this case relied upon Aurre and Richards v. Richards (In re Richards), 131 B.R. 76 (Bankr.S.D.Ohio 1991). These cases clearly held that a debtor is precluded from asserting that obligations owed to an ex-spouse are dischargeable where the obligations are incurred pre-petition, the ex-spouse later brings proceedings in the state courts seeking to enforce the pre-petition debt, and the debtor subsequently seeks to litigate the issue of dischargeability in bankruptcy court.

Rosenbaum asserts that the Richards case is distinguishable because the debtor there sought a determination "that the obligation contained in the divorce decree should be held discharged by his prior bankruptcy discharge." Id. at 78. This is a distinction without a difference. The result in Richards did not turn on the precise nature of relief sought in the subsequent bankruptcy proceeding. Rather, the debtor's failure to raise the "issue of dischargeability" in the intervening state court action "precluded him from contending that the obligation contained in the state court decree is dischargeable in bankruptcy." Id. As in this case, the debtor in Richards did not schedule his pre-petition debt to his wife. Nor did he assert as a defense in the intervening state court proceeding that he had received a discharge in the previous bankruptcy case. The fact that he could have raised the dischargeability issue thus precluded him from receiving a discharge of what appears to have been an otherwise dischargeable debt.

Similarly, the issue in Aurre was "whether the debt owed to the debtor's ex-spouse was actually in the nature of alimony, maintenance or support." 60 B.R. at 624. The facts in Aurre are remarkably similar to this case. The debtor was obligated to make certain alimony and support payments to his ex-wife under a separation agreement entered into in 1974. While in arrears in making payments under the separation agreement, the debtor filed a bankruptcy petition in early 1981 and received a discharge later that...