MATTER OF STEVENS, Bankruptcy No. 3-81-02970
| Decision Date | 21 December 1982 |
| Docket Number | Adv. No. 3-81-0783.,Bankruptcy No. 3-81-02970 |
| Citation | 25 BR 664 |
| Parties | In the Matter of Charlene Edwina STEVENS, Debtor. Dwight A. WELLS and Vikki A. Wells, Plaintiffs, v. Charlene Edwina STEVENS, Defendant. |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
Risa McCray, Dayton, Ohio, for defendant.
Dennis A. Lieberman and David H. Landon, Dayton, Ohio, for plaintiffs.
George W. Ledford, Englewood, Ohio, trustee.
DECISION AND ORDER
Plaintiffs, Dwight A. Wells and Vikki A. Wells, filed this adversary proceeding in which they object to the confirmation of Defendant-Debtor's, Charlene Edwina Stevens, Chapter 13 plan in bankruptcy. The complaint alleges that Debtor committed certain acts constituting fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny and that therefore the debt to Plaintiffs is nondischargeable under 11 U.S.C. § 523(a)(4).
Defendant's answer denies Plaintiffs' allegations and asserts that even if Plaintiffs' allegations are true, the debt is founded simply on contract and not a debt while acting in a fiduciary capacity.
Defendant then moved for a summary judgment under Fed.R. Civ.P. 56 and attached to said motion an affidavit of Defendant. Plaintiffs filed a "Memorandum in Opposition to Debtor's Motion for Summary Judgment."
The relevant portion of Fed.R.Civ.P. 56(c) reads as follows:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Emphasis Supplied)
Based on a review of the pleadings and Defendant's affidavit, it is clear that genuine issues as to material facts do in fact exist and that therefore a grant of summary judgment is inappropriate.
Plaintiffs' complaint alleges that upon a discovery of Defendant's breach of fiduciary responsibilities, Plaintiffs obtained a signed note from Defendant for $1,000.00 plus interest and that said note was a partial "payment" for the funds diverted by Defendant. Plaintiffs also maintain that Defendant subsequently agreed in a letter to sign a second note payable to Plaintiffs for $2,058.62 plus interest as total payment of the money diverted by Defendant and that the total debt is $2,223.31.
Neither Defendant's answer nor affidavit refers to a note. However, Defendant did list Plaintiffs in her bankruptcy schedules as unsecured creditors in the amount of $2,223.31. Plaintiffs filed a proof of claim for $2,223.31 and attached a promissory note in the amount of $1,000.00 alleged to be signed by the Defendant.
Initially, then, it is somewhat uncertain whether Defendant even concedes that a debt exists. Assuming that a debt does exist, the material facts surrounding the creation of the debt and the subsequent note are not merely unclear, they are in fact unknown to the Court at this time. (As mentioned, Defendant's affidavit is devoid of reference to a note.) The Court is unable on the basis of the record before it to determine the operative facts of the transactions between Plaintiffs and Defendant and, therefore, obviously unable to state that no genuine issues as to material facts exist.
Defendant briefly raises the point in her memorandum that even if Plaintiffs could prove that there was a breach of the agreement by Defendant, the debt could still be discharged under the discharge provisions of Chapter 13 of the Bankruptcy Code, 11 U.S.C. § 1328. It appears that Defendant is requesting a Judgment on the Pleadings, based on the proposition that even if Plaintiffs could prove the debt to be nondischargeable under 11 U.S.C. § 523(a)(4), it is nevertheless as a matter of law dischargeable under 11 U.S.C. § 1328.
The case law concerning the applicability of § 523 to § 1328 of the Bankruptcy Code is both extensive and sharply divided. We must note, however, a recent case of our Court of Appeals, Memphis Bank & Trust Co. v. Whitman, 692 F.2d 427 (6th Cir.1982), in which the Court addressed the question of whether a debt fraudulently obtained and placed in a Chapter 13 plan constitutes bad...
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