Mordas v. Schenkein
| Decision Date | 09 August 2010 |
| Docket Number | Adv. Pro. 09-01947 (AJG),Case No. 09-14658 (AJG) |
| Parties | LYNN MORDAS, Plaintiff, v. MICHAEL Z. SCHENKEIN, Defendant. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
Lynn Mordas, Pro Se
Kleyman & Associates, P.C., Attorney for the Defendant
FOR SUMMARY JUDGMENT
Before this Court is a motion for summary judgment (the "Motion") filed by Lynn Mordas, (the "Plaintiff), the former spouse of the Defendant-Debtor Michael Z. Schenkein (the "Defendant" or the "Debtor").1 The Motion was filed on June 22, 2010, pursuant to Federal Rules of Civil Procedure ("Rule") 56, as incorporated into bankruptcy practice by Federal Rules of Bankruptcy Procedure ("Bankruptcy Rule") 7056. The Plaintiff avers that no genuine issues of material fact exist with respect to any of the claims in her complaint (the "Complaint"). The Defendant filed his opposition ("Defendant's Opposition") to the Motion on July 8, 2010. The Plaintiff filed her reply ("Plaintiff's Reply") to Defendant's Opposition on July 13, 2010. A hearing was held on July 15, 2010. For the reasons discussed below, the Motion is GRANTED, in part, and DENIED, in part.
On July 24, 2009, the Debtor filed his Chapter 7 petition before this Court. The Plaintiff and Defendant have been involved in numerous domestic support enforcement proceedings regarding the Defendant's failure to pay the obligations imposed by their divorce settlement agreement.2 By the Motion, the Plaintiff seeks, inter alia, an order precluding Defendant from discharging the debts under the New York County Supreme Court (the "New York Court") order entered on October 29, 2009.3
On August 7, 2003, the New York Court issued an amended judgment to the original divorce settlement, entered into on November 20, 2002, which ordered the Defendant to pay the Plaintiff $125,000 for settlement of pendente lite maintenance andchild support arrears. Upon the Defendant's failure to pay the arrears or provide financial information properly requested by Plaintiff, the New York Court, on January 9, 2006, ordered the Defendant to appear before the court for supervised depositions. The same court also ordered the Defendant to pay attorney's fees incurred by the Plaintiff, as a result of her bringing the enforcement action. Subsequent to this order, the parties appeared on May 6, 2006, and eventually agreed to a modified settlement, which obligated the Defendant to adhere to a payment schedule.
After the Defendant failed to comply with the modified settlement, the Plaintiff filed a motion with the New York Court requesting that the Defendant be held in contempt. On February 19, 2009, that court granted the Plaintiff's request to draw an adverse inference against the Defendant for his failure to submit any opposition papers or required documents. The Defendant was ordered to pay attorney's fees in the amount of $2,000 incurred by the Plaintiff in this new action. In a subsequent decision dated March 31, 2009, the same court ordered that the Defendant be held in civil contempt and pay the total support arrears in the amount of $112,107.92 along with statutory interest, and pay the Plaintiffs attorney's fees under Domestic Relations Law ("DRL") sections 237(c) and 238, in the amount of $22,000.
Noting the Defendant's continued failure to pay any debts owed to the Plaintiff, the court issued a subsequent order on June 16, 2009 stating that the Defendant owed $118,759.38 in support arrears, an additional $19,236.68 in statutory interest, and a minimum of $24,000 in attorney's fees. The Defendant was ordered to immediately pay $52,000 to the Plaintiff on that same day-June 16, 2009. In a post-judgment action on August 20, 2009, the court ordered that all previous judgment amounts were to be paid bythe Defendant to the Dutchess County Support Collection Unit, on behalf of the Plaintiff. Finally, in a decision issued on October 28, 2009, the court denied the Defendant's motion to vacate the orders of February 19, 2009, and ordered the Defendant to pay the Plaintiff additional attorney's fees in the amount of $18,000. At that time, the court also denied the Plaintiff's motions for sanctions against the Defendant.
Plaintiff' seeks a determination that the debt owed to her, under an order by the New York Court, for both child support arrears and awarded attorney's fees, is nondischargeable pursuant to § 523(a)(5) or § 523(a)(15) of the Bankruptcy Code. See 11 U.S.C. § 523(a)(5), (15). The Plaintiff also seeks to recover the full amounts awarded by the New York Court plus interest, as well as attorney's fees incurred as a result of the bankruptcy proceedings. Lastly, the Plaintiff moves for a complete denial of discharge for the Defendant under § 727(a) of the Bankruptcy Code. See 11 U.S.C. § 727(a).
Rule 56(c) is incorporated into bankruptcy practice by Bankruptcy Rule 7056. Rule 56(c) specifies that, to preclude summary judgment, there must be a material fact in dispute. Substantive law determines the standard of materiality. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). If a fact is found to be material, it is necessary to see if the dispute regarding it is genuine, to wit, "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. at 248. If the fact may be reasonably resolved in favor of either party, thenthere is a genuine factual issue that may only be resolved by the trier of facts and summary judgment must be denied. Id. at 250. If, however, the evidence "is so onesided that one party must prevail as a matter of law," then summary judgment should be granted. Id. at 252. In considering a motion for summary judgment, the evidence is viewed in the light most favorable to the non-movant. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-159, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970).
After the non-movant has been afforded sufficient time for discovery, summary judgment must be entered when that party fails to make a showing sufficient to establish at least a genuine dispute over the existence of an element essential to its case and on which it has the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552 (1986). However, the event of "a complete failure of proof concerning an essential element of the nonmovant's case necessarily renders all other facts immaterial." Celotex 477 U.S. at 323, 106 S.Ct. at 2552. In this way, the summary judgment standard is similar to the directed verdict standard under Rule 50(a). See Celotex 477 U.S. at 323, 106 S.Ct. at 2552.
Summary judgment is wielded in such a way to further its primary goal of "dispos[ing] of factually unsupported claims or defenses." Celotex, 477 U.S. at 323-24, 106 S.Ct. at 2553. However, application of summary judgment procedure is not a disfavored procedural shortcut, but instead an integral part of the Federal Rules when there are no triable factual issues. See Celotex, 477 U.S. at 327, 106 S.Ct. at 2555.
Plaintiff asserts that the Defendant is liable for paying the child support arrears, as ordered previously by the New York Court.4 The Plaintiff further contends that such debt is non-dischargeable pursuant to § 523(a)(5) of the Bankruptcy Code, which states that a "domestic support obligation" is non-dischargeable. According to the Plaintiff, the various orders of the New York Court make clear that the monies owed to her by the Debtor were solely for domestic support arrears and therefore, this case would involve a clear-cut application of § 523(a)(5). Id.
In addition, the Plaintiff argues that, should this Court not find the entirety of the debts owed to her by the Defendant as constituting a "domestic support obligation" under § 523(a)(5), these arrears would remain non-dischargeable pursuant to § 523(a)(15), which states that "any debt... that is incurred by the debtor in the course of a divorce or separation, or in connection with a separation agreement, divorce decree, or other order of the court of record," is non-dischargeable. For these reasons, the Plaintiff argues that the Defendant's obligation, as a debtor, should be held non-dischargeable under either circumstance.
At the hearing before the Court regarding the Motion held on July 15, 2010, Defendant represented that he does not contest the Plaintiff's claims regarding the arrears for support obligations. Instead, Defendant asserted that he is simply challenging the Plaintiff's claim for attorney's fees.
However, Defendant's Opposition does in fact argue that that debts owed to the Plaintiff would be dischargeable under the Bankruptcy Code. First, the Defendant asserts, based on In re Silberfein, 138 B.R. 778, 780 (Bankr. S.D.N.Y. 1992), that this Court would not be bound by the New York Court's characterization of the debt as beingin the nature of child support. Based on Silberfein, the Defendant also argues that, in determining whether an obligation is dischargeable, this Court must undertake a multipronged analysis that seeks to establish "the intent behind the award and the substance of the obligation." Id.
Under this standard, the Defendant argues that this Court must decide whether the New York Court properly labeled the award as "child support obligation," or whether the award actually meant to serve other functions such as division of property. In assessing the proper designation for these debts, the Defendant argues that this Court would have to undertake a fact-finding analysis, which in turn would make this issue irresolvable through a summary judgment decision.
The current version of the Bankruptcy Code, as modified by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BA...
To continue reading
Request your trial