Matter of Pope
| Citation | 209 BR 1015 |
| Decision Date | 16 June 1997 |
| Docket Number | Bankruptcy No. N94-11020-WHD,Adversary No. 95-1037N. |
| Parties | In the Matter of William R. POPE, Debtor. William R. POPE, Plaintiff, v. Rebecca R. WAGNER, Defendant. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia |
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Griffin E. Howell, III, Newton & Howell, P.C., Griffin, GA, for Defendant.
H. Brooks Cotten, Newnan, GA, for Debtor/Plaintiff.
Currently before the Court in these proceedings is the Motion for Summary Judgment of Rebecca R. Wagner (hereinafter "the Creditor"). The Creditor's motion arises from a "Complaint to Determine Dischargeability of Debt and Complaint for Contempt," filed by William R. Pope (hereinafter "the Debtor") in the course of his Chapter 7 bankruptcy case. As such, this matter falls within the subject matter jurisdiction of the Court, see 28 U.S.C. § 157(b)(2)(A), (I) & (O), and it shall be disposed of in accordance with the Findings of Fact and Conclusions of Law that follow.
On May 6, 1994, the Debtor filed his present bankruptcy case under Chapter 13 of the Bankruptcy Code. Prior to his case's conversion to a Chapter 7 liquidation proceeding, the Debtor and Creditor were divorced in the Superior Court of Coweta County, Georgia, on or about December 21, 1994. The decree of divorce ordered the Debtor to pay $2,539.10 to the creditor in ten monthly installments of $133.91, and thereafter to pay sixteen monthly installments of $75.00. As to these remittances, the decree noted "while said payments are support payments made to or for the benefit of the Plaintiff, these payments on behalf of the Plaintiff, as between the parties, shall not be considered income to the Plaintiff nor deductible by the Defendant." Pope v. Pope, No. 94-V-508 at 3 (Sup.Ct. Coweta County filed Dec. 21, 1994).
The Debtor listed the above-mentioned $2,539.10 debt to his former spouse as part of his Chapter 7 bankruptcy schedules, identifying the same as a "property settlement" obligation. Finding the character of the obligation owed her then to be in question, the Creditor returned to the state court, where she sought and obtained a determination that the $2,539.10 debt constituted an item of nondischargeable support pursuant to 11 U.S.C. § 523(a)(5).1 As part of that determination, the divorce court also found specifically that the Creditor's act of returning to state court had not violated bankruptcy's automatic stay, but instead came within the stay exception provided by Code section 362(b)(2)(A)(ii). See 11 U.S.C. § 362(b)(2)(A)(ii) ().
In the wake of the state court's ruling, the Debtor since has returned to this Court, filing his present "Complaint to Determine Dischargeability of Debt and Complaint for Contempt."2 In support of this action, the Debtor acknowledges that the state courts have concurrent jurisdiction to determine dischargeability of marital obligations under 11 U.S.C. § 523(a)(5). Nevertheless, he contends that such state court actions may only be commenced subject to the parameters of bankruptcy's automatic stay. Thus, since the Creditor did not obtain stay relief prior to returning to state court, the Debtor alleges that the judgment rendered therein is void, and that the dischargeability of the underlying debt remains a subject of dispute. Further, the Debtor asserts that the Court should sanction the Creditor's circumvention of bankruptcy court processes, as a willful violation of the automatic stay. Viewing the Debtor's arguments as hinged upon legal issues already settled by the divorce court, the Creditor has filed the instant Motion for Summary Judgment.
In accordance with Federal Rule of Bankruptcy Procedure 7056, which incorporates Federal Rule of Civil Procedure 56, this Court will grant a motion for summary judgment only in the absence of any material issue of fact, so as to make the movant entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The movant has the burden to establish that no such factual issue exists, id. at 324, 106 S.Ct. at 2553, and the Court will read the opposing party's pleadings liberally. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). As a drastic remedy, summary judgment only will be granted when there is no room for controversy. United States v. Earhart (In re Earhart), 68 B.R. 14, 15 (Bankr. N.D.Iowa 1986); Sell v. Heath (In re Heath), 60 B.R. 338, 339 (Bankr.D.Colo. 1986).
State court judgments "shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of such State . . . from which they are taken." 28 U.S.C. § 1738. This requirement of "full faith and credit" applies in dischargeability proceedings, just as it would in any other court action. See Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 381, 105 S.Ct. 1327, 1332, 84 L.Ed.2d 274 (1985); Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481-82, 102 S.Ct. 1883, 1897-98, 72 L.Ed.2d 262 (1982) (); see also Nourbakhsh v. Gayden (In re Nourbakhsh), 162 B.R. 841, 843 (9th Cir. BAP 1994); Wright v. McIntyre (In re Wright), 57 B.R. 961, 963 (Bankr.N.D.Ga. 1986) (Drake, B.J.) (the effect of a State Superior Court judgment "is governed by the principles of full faith and credit set forth in 28 U.S.C. § 1738"). Thus, when certain issues relative to a nondischargeability complaint may have already been decided by a Georgia state court judgment, bankruptcy courts must look to state law to determine the preclusive effect of that preceding judgment. Aerojet-General Corp. v. Askew, 511 F.2d 710, 721 n. 11 (5th Cir.), reh'g denied, 514 F.2d 1072 cert. denied, Metropolitan Dade County, Fla. v. Aerojet-General Corp., 423 U.S. 1026, 96 S.Ct. 470, 46 L.Ed.2d 400 (1975).
In Georgia, the res judicata effect of judgments is defined by O.C.G.A. § 9-12-40, which provides that "a judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue, or which under the rules of law might have been put in issue in the case wherein the judgment was rendered, until such judgment shall be reversed or set aside." Id; see also Southern Jam, Inc. v. Robinson, 675 F.2d 94, 96, 98 (5th Cir.1982); Smith v. Wood, 115 Ga.App. 265, 266-67, 154 S.E.2d 646 (1967). Under this standard, as under its federal counterpart, res judicata will bar a subsequent judicial proceeding whenever three essential criteria have been met: (1) a court of competent jurisdiction rendered a prior decision; (2) the prior decision was a final judgment on the merits; and (3) the same cause of action and the same parties (or their privies) were involved in both the former and present cases. Booth v. Quantum Chem. Corp., 942 F.Supp. 580, 584 (S.D.Ga.1996) (citing Nevada v. United States, 463 U.S. 110, 129-30, 103 S.Ct. 2906, 2917-18, 77 L.Ed.2d 509 (1983); Akin v. PAFEC, Ltd., 991 F.2d 1550, 1556 (11th Cir.1993)).
In the instant case, the Debtor concedes that the state court previously entered a final judgment of nondischargeability in an action involving the parties to this adversary. Moreover, the Debtor agrees that the divorce court held subject matter jurisdiction, concurrently with this Court,3 to reach a determination of section 523(a)(5)'s applicability. Thaggard v. Pate (In re Thaggard), 180 B.R. 659, 661 (M.D.Ala.1995); Rosenbaum v. Cummings (In re Rosenbaum), 150 B.R. 994, 996 (E.D.Tenn.1993); see also Saler v. Saler (In re Saler), 205 B.R. 737, 746 (Bankr. E.D.Pa.1997) (). Nevertheless, he seeks to avoid the preclusive effect of the divorce court's decision, asserting that it came in violation of the automatic stay and, therefore, that the resulting judgment is void on its face.
As the Debtor observes, section 362(a) of the Bankruptcy Code operates as a stay against "any act to obtain possession of property of the estate or property from the estate"4 as well as any effort to collect on a pre-petition debt, by judicial means or otherwise. See 11 U.S.C. §§ 362(a)(1), (3) & (6). Acts taken in violation of the automatic stay generally are said to be voidable at the Court's discretion. See Roseman v. Roseman, 14 F.3d 602, 1993 WL 513899, No. 93-5099 at * 2-4 (6th Cir. Dec. 09, 1993) (citing In re Albany Partners, 749 F.2d 670, 675-76 (11th Cir.1984)). Similarly, because the automatic stay provision trumps any statute conferring concurrent jurisdiction on other courts in civil proceedings, a nonbankruptcy court lacks jurisdiction to the extent that it determines matters in violation of the automatic stay. See e.g., Fidelity Nat'l Title Ins. Co. v. Franklin (In re Franklin), 179 B.R. 913, 925 (Bankr.E.D.Cal.1995); Anderson v. Briglevich, 147 B.R. 1015 (Bankr.N.D.Ga. 1992). For this reason, to the extent that a stay violation occurred when the Creditor submitted her grievances for the state court's determination, the Debtor correctly observes that the resulting judgment should not preclude further litigation of the underlying dischargeability question. Id.
Prerequisite to such a conclusion, however, the dischargeability proceeding conducted in the Superior...
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