In re Thaggard
| Decision Date | 06 March 1995 |
| Docket Number | Civ. A. No. 94-D-102-N. |
| Parties | In re Thomas Leonard THAGGARD, Debtor. Thomas Leonard THAGGARD, Appellant, v. Mary Anne M. PATE, f/k/a Mary Ann Thaggard and Robert J. Russell, Jr., Appellees. |
| Court | U.S. District Court — Middle District of Alabama |
Jerry L. Cruse, Montgomery, AL, for debtor/appellant Thomas Leonard Thaggard.
Charles Nichols Parnell, III, Montgomery, AL, for appellee Mary Anne M. Pate.
Robert J. Russell, Jr., pro se.
This matter is before the court on appeal from the United States Bankruptcy Court of the Middle District for Alabama. The bankruptcy court abstained from hearing Thomas Leonard Thaggard's adversary proceeding against Mary Anne M. Pate, f/k/a Mary Ann Thaggard, and Robert J. Russell, Jr. After careful consideration of the arguments of counsel, the relevant case law and the record as a whole, the court finds that the decision of the bankruptcy court is due to be affirmed.
The court has jurisdiction pursuant to 28 U.S.C. § 158(a), which provides that all final orders of bankruptcy judges shall be appealable to the district court located within the district in which the bankruptcy judge serves.
The applicable standard of review with respect to findings of fact is the "clearly erroneous" standard. Green Tree Acceptance, Inc. v. Calvert (In re Calvert), 907 F.2d 1069, 1071 (11th Cir.1990). Findings of fact by the bankruptcy court are subject to reversal when "the reviewing court is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948).
As to conclusions of law, the standard of review is de novo, and the district court may independently examine the applicable law and draw its own conclusions after applying the law to the facts without regard to the decision of the bankruptcy court. In re Chase & Sanborn Corp., 904 F.2d 588, 593 (11th Cir.1990).
Thomas Leonard Thaggard (hereafter "debtor-husband") and Mary Anne Pate1 f/k/a Mary Anne Thaggard (hereafter "creditor-wife") filed for divorce in the Circuit Court of Montgomery County, Alabama. On March 23, 1989, the circuit court entered a divorce decree, granting the creditor-wife custody of their two children and ordering the debtor-husband to make bi-weekly child support payments and to pay the joint debts incurred during the marriage.
While the decree specifically excluded alimony payments to the creditor-wife, the court reserved the right to award such payments:
8. . . . The Wife is able to support herself with regard to her daily expenses, and no periodic alimony is awarded at this time. However, the Court reserves the right to award periodic alimony should the same become necessary due to the Wife sic becoming individually liable to make payment on joint debts of the parties assigned herein to the Husband and/or should the facts and circumstances of the parties change such that an award of periodic alimony would be deemed appropriate by the Court.
Thereafter, the debtor-husband's child support payments became in arrears, and the creditor-wife filed in the circuit court a "Contempt Petition for Non-Payment of Support." Therein, the creditor-wife sought delinquent child support payments totalling $18,000, as well as $13,000 for amounts allegedly paid by her for joint debts incurred during the marriage. On March 15, 1993, the creditor-wife filed a second petition in the circuit court to recover for medical expenses owed to her under the divorce decree, to recover a judgment for the joint debts assumed and allegedly paid by her and to terminate the visitation rights of the debtor-husband.
The circuit court held a hearing on April 27, 1993 to determine whether to award the relief sought by the creditor-wife in her petitions. Based upon mutual agreement of the debtor-husband and creditor-wife, the court entered a judgment in favor of the creditor-wife, awarding child support arrearage, payments for the joint debts assumed, as well as attorney fees.
Prior to this hearing, the debtor-husband filed an answer to the creditor-wife's two petitions, therein asserting that he was in the process of filing for protection under Chapter 7 of the United States Bankruptcy Code. On April 27, 1993, the day of the hearing, the debtor-husband in fact filed a petition for Chapter 7 protection in the United States Bankruptcy Court for the Middle District of Alabama. In his petition, the debtor-husband named the wife as a creditor for child support payments and marital debts. On the same day, the debtor-husband filed in the circuit court a notice of bankruptcy and motion to stay the proceedings, which the circuit court denied in a stamped order.
On July 10, 1993, the creditor-wife filed in the bankruptcy court a motion requesting that the automatic stay be lifted so that she could proceed against the debtor-husband in the circuit court for an award of periodic alimony payments and determination of the rights and obligations between the parties under the divorce decree. The bankruptcy court granted the motion and terminated the stay in its order dated July 28, 1993. The bankruptcy court based its decision on the "policies underlying" Carver v. Carver, 954 F.2d 1573 (11th Cir.), cert. denied, ___ U.S. ___, 113 S.Ct. 496, 121 L.Ed.2d 434 (1992), and asserted that the state court has concurrent jurisdiction to determine whether the marital debts are dischargeable under 11 U.S.C. § 523(a)(5).2
On July 20, 1993, the debtor-husband commenced an adversary proceeding in the bankruptcy court against the creditor-wife and her attorney charging that they willfully violated the automatic stay provision by seeking a judgment in state court after the debtor-husband had filed for bankruptcy. Moreover, the debtor-husband requested the bankruptcy court to determine whether the amounts owed to the creditor-wife were due to be discharged under 11 U.S.C. § 523(a)(5).
Thereafter on August 27, 1993, the creditor-wife and her attorney (i.e., the defendants in the adversary proceedings) filed a motion to dismiss the proceedings. The bankruptcy court entered its opinion on September 15, 1993, concluding as follows: "Resolution of the issues under 11 U.S.C. § 523(a)(5) requires interpretation of a state court divorce decree;" hence, ". . . the issue of dischargeability may best be decided in state court," which has concurrent jurisdiction pursuant to 11 U.S.C. § 1334.
On December 13, 1993, the bankruptcy court denied the debtor-husband's motion for a rehearing and dismissed the adversary proceedings. This appeal followed.
The debtor-husband has raised three issues on appeal. The court will address each separately.
The jurisdiction-granting statute is 28 U.S.C. § 13343 and provides in pertinent part as follows:
The debtor-husband argues that under § 1334(b), the state court may not determine whether a debt is not dischargeable under 11 U.S.C. § 523(a)(5), because "no other act of congress confers upon State domestic courts exclusive jurisdiction to determine dischargeability in matters arising out of or related to Title 11."4 Appellant's Br. at 11. The debtor-husband, however, has failed to set forth any authority supporting his argument.
In fact, caselaw explicitly pronounces that the state courts have concurrent jurisdiction over the matters at issue in this case. See In re Moralez, 128 B.R. 526, 528 (Bankr. E.D.Mich.1991) (); Hohenberg v. Hohenberg, 143 B.R. 480, 483 (Bankr.W.D.Tenn. 1992) (); In re Richards, 131 B.R. 76, 78 (Bankr.S.D.Ohio 1991). Finally, the court finds that following analysis persuasive:
Section 523(a)(5) does not fall within the terms of section 523(c)(1), which discharges debts specified in section 523(a)(2), (4) or (6) unless the creditor requests a hearing to determine the dischargeability of such debts. In effect, the determination of whether debts within subsection (a)(2), (4) or (6) are dischargeable under section 523(a) falls within the exclusive jurisdiction of the bankruptcy court, while the bankruptcy court possesses only concurrent jurisdiction if subject to a dischargeable determination for other types of debts. . . . By virtue of the permissive grant to file the complaint, and by comparison with section 523(c)(1), it is clear that the bankruptcy court only has jurisdiction concurrent with the appropriate local court.
Collier on Bankruptcy, ¶ 523.15, at XXX-XXX-XXX (Lawrence P. King ed., 15th ed. 1992). Accordingly, the court finds that the bankruptcy court did not err in concluding that the state court has concurrent jurisdiction to hear claims under 11 U.S.C. § 523(a)(5).
In his adversary complaint, the debtor-husband sought damages for an alleged willful violation of the automatic stay and requested...
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