Matter of Dole, Bankruptcy No. 80-0311.

Decision Date09 January 1981
Docket NumberBankruptcy No. 80-0311.
Citation7 BR 986
PartiesIn the Matter of Donna Rae DOLE aka Donna Rae Morrison aka Donna Rae Zaccardi, Debtor. PANHANDLE PUBLIC EMPLOYEES FEDERAL CREDIT UNION, Plaintiff, v. Donna Rae DOLE, Defendant.
CourtU.S. Bankruptcy Court — District of Idaho

Jonathan W. Cottrell, Sandpoint, Idaho, for plaintiff.

Richard J. Gomez, Spirit Lake, Idaho, for defendant.


MERLIN S. YOUNG, Bankruptcy Judge.

Plaintiff herein seeks a summary judgment holding that the debt owed to it by defendant is nondischargeable. There are no genuine issues of fact.

On August 25, 1977, the plaintiff loaned defendant $2,462.00. Subsequently the defendant became a voluntary bankrupt under the Bankruptcy Act. Her discharge was granted on February 3, 1978. The following day she reaffirmed her debt with the plaintiff. Some months later defendant's discharge was revoked pursuant to Section 15(3) of the Act for failure to obey an Order of the Bankruptcy Court regarding income tax refunds. Later in 1979 the plaintiff obtained a judgment against debtor in a State Court for the reaffirmed debt. The parties now agree that defendant owed plaintiff $1,874.36 at the time she petitioned for relief under chapter 13 of Title 11, U.S. Code in May of 1980.

Defendant scheduled the plaintiff as a creditor in her chapter 13 statement but failed to give a complete address for plaintiff (to wit, no city or state were shown). In addition, defendant failed to show plaintiff on her master mailing list as required by Local Rule No. II. As a result, plaintiff did not receive notice of this proceeding until July 31, 1980, when a Sheriff returned a Writ of Execution on the State Court Judgment unsatisfied together with a copy of the Notice of First Meeting of Creditors in the chapter 13 proceeding.

This action was filed on September 24, 1980. Defendant contends that this filing was too late and plaintiff's cause of action is barred. In chapter 13 proceedings an Order setting the time for filing objections to discharge is not issued until debtor has completed his plan and is eligible for discharge. An objection can be filed until that Order is issued and the time specified therein has elapsed. See Rule 13-407. Thus, this defense is not valid.

The remaining issue is whether a revocation of discharge under Section 15 of the Act will bar a discharge of that same debt in a subsequent chapter 13 proceeding under the new Code. An examination of the statutory language of the Bankruptcy Act indicates that defendant's failure to obtain a discharge in the first proceeding under that Act was res judicata to the dischargeability of the same debt in a subsequent proceeding under the Bankruptcy Act. Section 17(b) of the Act so provides:

". . . If a bankrupt or debtor fails to obtain a discharge in a proceeding under this Act . . . by reason of a denial or any ground under 14c of this Act other than clause (5) or clause (8) thereof, the debts provable in such proceeding shall not be released by a discharge granted in any subsequent proceeding under this Act . . . "

Section 14(c)(6) of the Act reads as follows:

"The Court shall grant the discharge unless satisfied that the bankrupt has . . . in the course of a proceeding under this Act refused to obey any lawful order of . . . the Court."

It is the plaintiff's contention that if the debt was nondischargeable in a subsequent proceeding under the old Act, it is also nondischargeable in a subsequent proceeding under the Bankruptcy Code. The difficulty with such a position is that no statutory language equivalent to that of 17(b), 14(c)(6), and 15(3) of the old Act exists with reference to a Section 1328(a) discharge.

At first glance it might appear that Subsection (a)(9) of Section 523 of the Code achieves the same result as Section 17(b) of the Act, but 523 by its express terms applies only to discharges issued under sections 727, 1141 and 1328(b). It states:

"(a) A discharge under section 727, 1141, or 1328(b) of this title does not discharge an individual debtor from any debt —
(9) that was or could have been listed or scheduled by the debtor in a prior case concerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge, or was denied a discharge under section 727(a)(2), (3), (4), (5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of

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