Matter of Robinson
| Decision Date | 27 November 1985 |
| Docket Number | Bankruptcy No. 84-01240-TH,Adv. No. 84-0178. |
| Citation | 55 BR 839 |
| Parties | In the Matter of Diana E. ROBINSON, Debtor. The FIRST NATIONAL BANK OF ATLANTA, Plaintiff, v. Diana E. ROBINSON, Defendant. |
| Court | U.S. Bankruptcy Court — Southern District of Indiana |
M. Sidney Glanzman, Goldstein, Glanzman, Brown & Katzman, Indianapolis, Ind., for First Nat. Bank of Atlanta.
Kimberly Antcliff Jackson, Riley, Ind., for Diana E. Robinson.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This cause came on for trial on February 22, 1985 on a Complaint to Determine Dischargeability of a Debt filed by plaintiff, The First National Bank of Atlanta, (hereinafter referred to as the "Bank"), on November 1, 1984. The Bank appeared by M. Sidney Glanzman; debtor, Diana E. Robinson, appeared by counsel, Kimberly A. Jackson. Witnesses were sworn, evidence was heard whereafter the parties rested. The Court, having heard the evidence and arguments of counsel, personally observed the demeanor of the witnesses, and having adjudged their credibility and weighed the evidence presented, now adopts the following Findings of Facts and Conclusions of law:
The defendant/debtor in the within case, Diana E. Robinson, (the "debtor"), is single and appeared to be in her middle thirties. At the time of trial, she lived in an apartment in the City of Terre Haute, Indiana and was employed as a department secretary at Indiana State University where she had worked continuously for the last sixteen (16) years.
She testified that her annual salary was currently Eight Thousand Eight Hundred ($8,800.00) Dollars, that she had a take-home pay of Two Hundred Twenty-seven ($227.00) Dollars every two (2) weeks, and that her apartment rental cost was Two Hundred ($200.00) Dollars a month.
Judicial notice of her Statement of Affairs reveals that she had filed Bankruptcy on one previous occasion; that being in this Court during the calendar year 1973. Her Statement of Affairs failed to state any further information as to whether or not she received a discharge. The Court's records indicate, however, that the debtor herein received a Discharge in Bankruptcy in this Court on December 15, 1972.
Further, judicial notice of the schedule of debts in the instant case shows that at the time of the filing of the Bankruptcy Petition under Chapter 7 of Title 11 of the United States Code, on August 6, 1984, the debtor had a total debt load of Twenty-three Thousand Nine Hundred Seventy-five ($23,975.00) Dollars. Her secured debts consisted of two (2) obligations, one with Associates Financial Services in the amount of Three Thousand Two Hundred ($3,200.00) Dollars, and the other with Heights Finance totaling One Thousand Six Hundred Fifty ($1,650.00) Dollars. Both of these debts were secured by household goods and were incurred in the calendar years 1981 and 1982 respectively. No evidence was presented as to whether or not the liens were avoidable pursuant to 11 U.S.C. 522(f).
The debtor's unsecured scheduled debts, in addition to the indebtedness owed to the Bank, the dischargeability of which debt is here at issue, lists an obligation to the Indiana State Federal Credit Union in the amount of One Thousand Two Hundred ($1,200.00) Dollars. Among the other listed unsecured debts are three (3) credit card indebtednesses which are in the following particulars:
Date Debt Amount
Name of Creditor Incurred of Debt
Bank One
Columbus, Ohio 1983 $4,400.00
First Card
Elgin, Illinois 1983 $3,300.00
Visa
Columbus, Ohio 1983 $1,600.00
The approximate total indebtedness of these three (3) cards is Nine Thousand Three Hundred ($9,300.00) Dollars, or over forty-eight percent (48%) of her overall debt load of Nineteen Thousand One Hundred Twenty-five Dollars ($19,125.00).
The facts elicited at trial show that the debtor was not current in her payments upon at least two (2) of these three (3) existing credit card accounts.
The debtor testified that she knew she could not make full payment on these credit card accounts, and further that the First Bank of Elgin, Illinois had previously asked for the return of their card as the debtor had exceeded her credit limit on this account. Debtor further testified, however, that she had sent the Elgin card back and was making "regular payments", but didn't remember the amount of payments. She also testified she knew she was behind with Bank One of Columbus and that her income alone was insufficient to pay "these" accounts, and that she was behind on her payments on most of her bills listed in her schedules.
The debtor had a sister, also single, who testified on her behalf. The sister, Deborah Robinson, was approximately thirty-five (35) years of age, and also lived in the City of Terre Haute, Indiana in a house which she had purchased for Four Thousand ($4,000.00) Dollars. The sister stated this house had no liens, and in her opinion, had a fair market value of ten to twelve thousand ($10,000-$12,000) Dollars.
The debtor also stated at the trial that she had an agreement with her sister to personally provide money and physical labor to help fix up her sister's house for sale, and that when such sale was accomplished, which she approximated would be from four (4) to six (6) months from April of 1984, she and her sister would split the profit. It is to be noted the debtor stated that she had loaned some money to her sister, Deborah Robinson, which loans remain unpaid and the amounts of which were not disclosed. According to debtor's testimony, it was the anticipated profit from the sale of the house that the debtor was relying upon for the repayment of her sister's debt to her, and also the source from which debtor would be able to reduce her overall debt load.
On or about March, 1984 the debtor received in the mail what was labeled "Exhibit B" herein set out. This document speaks for itself.
Testimony by the debtor revealed that she received Exhibit B on or about March, 1984.
Exhibit B is an "offer" to request a Visa card with a pre-approved credit line of Two Thousand ($2,000.00) Dollars with the Bank. This document was properly addressed to the debtor (although the zip code thereon was incorrect), and states that debtor's account has already been approved. A reasonable reading of it implied that by either marking the "yes box" or calling the toll free number, plus providing only the name of her employer, her position, her business and home phone numbers, and her social security number she would receive the credit card. This document also indicates that all debtor need do was to date the form, sign it and return it if she chose this option over the phone response. One final feature of the "offer" is that it expired on April 30, 1984, which, by the evidence, leads to the conclusion that this "offer" was available to the debtor for a period not in excess of sixty (60) days.
The debtor did, in fact, fill out the "offer" on the date indicated, sent it in, and obtained The First Atlanta card on or about April 20, 1984.
At trial, a stipulated Exhibit was introduced into evidence. This stipulated Exhibit consisted of eleven (11) pages which was a compilation of the Bank's in-house records of debtor's transactions, including cash advances and purchases made, finance charges assessed, and payments made. This Exhibit and its entries are not only uncontroverted but the parties stipulated as to its accuracy.
A reading of this stipulated Exhibit shows that between April 24, 1984 and June 22, 1984, a period of less than sixty (60) days, the debtor made approximately one hundred twenty-four (124) different charges to her account, of which at least ten (10) of these purchases were made on May 30, May 31, and June 1, 1984 at K-Mart, with each purchase being less than the Fifty Dollars ($50.00). It was customary for merchants to screen cardholders making purchases in excess of Fifty Dollars ($50.00). This one particular series of transactions, although admittedly the most exascerbated example, closely represents debtor's use of this credit card while it was in her possession. This particular series of transactions is herein set out and reads as follows:
A further examination of the bulk exhibit discloses that on May 27, 1984, the debtor purchased goods from the Furrow Building Material store in Terre Haute, on three (3) separate occasions, again each purchase being under the Fifty Dollar ($50.00) amount. Further testimony revealed on June 5, 1984 the debtor again made five (5) separate purchases from the Furrow Building Materials store in Terre Haute, again each purchase being under Fifty Dollars ($50.00).
In addition to using the card to pay off other indebtednesses, the evidence shows that the types of goods debtor purchased with the Bank Atlanta card included household items, personal clothing, automotive goods, Christmas and party items, and entertainment such as dining out. Debtor offered proof that of the purchases made, Two Thousand Two Hundred Thirty-eight Dollars and Ten Cents ($2,238.10) was spent to purchase home improvement items for her sister's house.
In June, 1984, the debtor received a call from a representative of the Bank advising her she had exceeded her Two Thousand ($2,000.00) Dollar credit line and requested she send the card back. The debtor did so on or about the 14th day of June, 1984. The balance due on the debtor's account on June 21, 1984 was approximately Five Thousand One Hundred Sixty-eight Dollars and Twenty-five Cents ($5,168.25). When the debtor filed her Petition in Bankruptcy under Chapter 7 on August 6, 1984, the total indebtedness owed to the Bank was Five Thousand Six Hundred Eighty-nine Dollars and thirty-six Cents ($5,689.36).
The Bank contends the debtor obtained the extension of credit through fraud, under 11 U.S.C. 523(a)(2) and concludes the...
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