In re Wilson, Bankruptcy No. 3-92-04669
Decision Date | 09 August 1993 |
Docket Number | Adv. 93-0012.,Bankruptcy No. 3-92-04669 |
Citation | 158 BR 709 |
Parties | In re James K. WILSON, Jr., Debtor. Phyllis E. WILSON, Plaintiff, v. James K. WILSON, Jr., Defendant. |
Court | U.S. Bankruptcy Court — Southern District of Ohio |
Gary C. Schaengold, Dayton, OH, for plaintiff.
Charles A. Johnson and Beverly F. Schmaltz, Dayton, OH, for defendant.
George W. Ledford, Englewood, OH, Chapter 13 Trustee.
DECISION ON ORDER GRANTING SUMMARY JUDGMENT TO PLAINTIFF IN PART AND GRANTING SUMMARY JUDGMENT TO DEFENDANT IN PART
This matter is before the court upon the motions for summary judgment filed by both parties. The court has jurisdiction by virtue of 28 U.S.C. § 1334 and the standing order of reference in this district. This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(I)—determinations as to the dischargeability of particular debts.
The following material facts are undisputed by the parties:
1) On September 1, 1992, the marriage of plaintiff Phyllis E. Wilson and defendant/debtor James K. Wilson, Jr., was dissolved by the Common Pleas Court of Montgomery County, Ohio.
2) The "Final Judgment and Decree of Divorce" of the state court provided for the division of automobiles and other personal property, the assumption of various debts by the parties, and stated that "neither party shall pay or receive spousal support from the other party. . . ."
3) The Decree also contains the following provision with respect to the debtor's retirement fund:
4) On October 26, 1992, the debtor filed a petition in bankruptcy pursuant to chapter 13 of the Bankruptcy Code. Plaintiff was listed as a nonpriority, unsecured creditor in the amount of $11,000 and the debtor's plan proposes to pay her 10% of her claim.
Pursuant to § 523(a)(5) and § 1328(a) of the Bankruptcy Code, debts that are for "alimony to, maintenance for, or support of" a former spouse are nondischargeable in a debtor's chapter 13 plan, whereas debts that are for a "property settlement" are dischargeable.
In the instant case, the plaintiff requests the court to find that:
the $11,000 awarded to her in her divorce from the debtor represents her property, that the property is being constructively held by the debtor, and can not be discharged as a debt. Plaintiff further requests this court to order the $11,000 to be repaid within any confirmed plan at 100% and nothing less. Doc. # 7.
In this court's opinion, to analyze the effect of the state court decree, it is necessary to view the decree as being comprised of two components: 1) the order that requires the debtor to pay $100 per month to the plaintiff, and 2) the remaining provisions of the decree affecting the disposition of the retirement account itself. With regard to the funds held in the retirement account, "most courts have held that an award by a domestic relations court to the wife of a portion of her husband's government or military pension became the wife's sole and separate property." Adamo v. Ledvinka, 144 B.R. 188, 192 (Bankr. M.D.Ga.1992) (citing Bush v. Taylor, 912 F.2d 989, 993 (8th Cir.1990)); Benich v. Benich (In re Benich), 811 F.2d 943, 945 (5th Cir.1987); Chandler v. Chandler (In re Chandler), 805 F.2d 555 (5th Cir.1986); Stolp v. Stolp (In re Stolp), 116 B.R. 131 (Bankr.W.D.Wis.1990); Corrigan v. Corrigan (In re Corrigan), 93 B.R. 81 (Bankr. E.D.Va.1988); Mace v. Mace (In re Mace), 82 B.R. 864, 868 (Bankr.S.D.Ohio 1987); Manners v. Manners (In re Manners), 62 B.R. 656 (Bankr.D.Mont.1986); Hall v. Hall (In re Hall), 51 B.R. 1002 (S.D.Ga. 1985). This court concurs with the result reached by these courts and agrees with the plaintiff that the state court found that, at the time of the divorce decree, she had an interest worth $11,000 in the debtor's retirement fund:
Plaintiff has a retirement benefit, the marital portion of which is determined to be $20,624.92. To compensate Defendant for her interest therein, as well as to equalize the net assets being retained by the parties, as described hereinabove, the Plaintiff shall pay to the Defendant the sum of $11,000.00. Doc. # 1, Exh. A (emphasis supplied).
As a result of the state court decree, on September 1, 1992, the plaintiff became the equitable owner of $11,000 worth of the assets in the debtor's retirement fund, and although the assets are currently held by the Ohio PERS in the name of the defendant, such assets are the plaintiff's sole and separate property. This portion of the retirement fund is, therefore, not part of the debtor's bankruptcy estate and not subject to the jurisdiction of this court:
Property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest . . . becomes property of the estate . . . only to the extent of the debtor\'s legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold. 11 U.S.C. § 541(d).1
Despite the fact that the award to the plaintiff of one-half of the debtor's retirement fund was a property settlement, and not alimony or support,2 § 523(a)(5) is not relevant to this portion of the state court decree. This portion of the property settlement, i.e., the award of one-half of the marital asset, was made prior to the debtor's filing of a petition in bankruptcy and has therefore already been executed by virtue of the state court decree. As a result, it is clearly not a "debt" owing to the plaintiff on the date the debtor filed bankruptcy. A state court's award of one-half of a debtor's retirement fund to a former spouse is no different in principle than awarding the marital residence to a former spouse, although, in the instant matter, the plaintiff's enjoyment of the asset apparently will be postponed. Because the asset is outside of this court's jurisdiction, it is the province of the state courts to determine the methods available to the plaintiff to reach the retirement fund asset.
The second inquiry is to determine the effect of the debtor's obligation to pay $100 a month to the plaintiff until a total of $11,000 has been paid. This court finds unpersuasive the suggestion that the order to pay $100 a month is not a debt.3 Under the Bankruptcy Code a "debt" is "liability on a claim," 11 U.S.C. § 101(12), and the definition of a "claim" is extremely broad:
If the obligation to pay $100/month is viewed as "part" of the property settlement ordered by the state court, then it is clearly...
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