Parker v. Miller (In re Miller)

• Decision Date: 30 July 2018
• Docket Number: ADV. PROC. NO. 18-00008-NPO,CASE NO. 17-04008-NPO
• Citation: 589 B.R. 550
• Parties: IN RE: April Florine MILLER, Debtor. Barbara Bond Parker, Plaintiff v. April F. Williamson Miller, Defendant
• Court: U.S. Bankruptcy Court — Southern District of Mississippi

589 B.R. 550

IN RE: April Florine MILLER, Debtor.Barbara Bond Parker, Plaintiff

v.April F. Williamson Miller, Defendant

CASE NO. 17-04008-NPO

ADV. PROC. NO. 18-00008-NPO

United States Bankruptcy Court, S.D. Mississippi.

Signed July 30, 2018

R. Lane Dossett, Robert L Dossett, L. CLark Hicks, Hicks Law Firm, PLLC, Hattiesburg, MS, for Plaintiff.

Allen Flowers, Flowers Law Firm, Hattiesburg, MS, for Defendant.

MEMORANDUM OPINION AND ORDER: (1) DENYING MOTION TO STRIKE; (2) DENYING MOTION TO DISMISS WITHOUT PREJUDICE; (3) MODIFYING AUTOMATIC STAY, SUA SPONTE ; AND (4) HOLDING ADVERSARY PROCEEDING IN ABEYANCE

Judge Neil P. Olack, United States Bankruptcy Judge

This matter came before the Court for hearing on June 22, 2018 (the "Hearing"), on the Answer, Defenses & Motions (the "Motion to Dismiss") (Adv. Dkt. 8)¹ filed by April Florine Miller ("April");² the Response in Opposition to Defendant's Motion to Dismiss (the "Response to Motion to Dismiss") (Adv. Dkt. 13) filed by Barbara Bond Parker ("Barbara"); April Miller's Reply to Plaintiff's Response to Motion to Dismiss (the "Reply in Support of Motion to Dismiss") (Adv. Dkt. 19) filed by April; the Motion to Strike Rebuttal and Exhibits (the "Motion to Strike") (Adv. Dkt. 20) filed by Barbara; and the Objection to Motion to Strike Rebuttal and Exhibits (Dkt. # 20) (the "Response to Motion to Strike") (Adv. Dkt. 22) filed by April in the Adversary. At the Hearing, Allen Flowers represented April, and R. Lane Dossett represented Barbara. Having considered the matter and being fully advised in the premises, the Court finds as follows:³

Jurisdiction

This Court has jurisdiction over the parties to and the subject matter of the Adversary pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I) and (J). Notices of the Motion to Dismiss and Motion to Strike were proper under the circumstances.

Facts

For purposes of the Motion to Dismiss, the Court reviews the facts and inferences to be drawn from them in the light most favorable to the nonmoving party. See Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co. , 336 F.3d 410, 412 (5th Cir. 2003). Most of the following facts are taken from the Complaint Objecting to Discharge (the "Adversary Complaint") (Adv. Dkt. 1) filed by Barbara.

Barbara and Roger Martin Parker ("Roger") married in 1982; they had two children (the "Parker Children") (Adv. Dkt. 19-1 at 2). Roger hired April as a part-time bookkeeper for a farming business. (Adv. Dkt. 1-1 at 1-2). In 2004, Roger and April began an adulterous affair which continued uninterrupted until December 3, 2011, when Roger separated from Barbara and the Parker Children. (Adv. Dkt. 19-1 at 2). Shortly thereafter, Roger filed a complaint for divorce in the Chancery Court of Lamar County, Mississippi (the "Chancery Court"), styled Roger Parker v. Barbara Parker , Cause No. 2012-0536-GN-DO. Barbara filed an answer and counterclaim seeking a divorce from Roger on grounds of adultery. (Adv. Dkt. 19-1).

During the pendency of the divorce proceedings, Barbara commenced an action against April in the Circuit Court of Lamar County, Mississippi (the "Circuit Court"), styled Barbara Bond Parker v. April F. Williamson Miller , Civil Action No. 2012-165 (the "Circuit Court Action"), on November 29, 2012. (Adv. Dkt. 1 at 1). In the Complaint for Alienation of Affection, Intentional Infliction of Emotional Distress, Accounting and Other Relief (the "Circuit Court Complaint") (Adv. Dkt. 1-1), Barbara asserted causes of action against April for: (a) fraud; (b) embezzlement; (c) intentional infliction of emotional distress; and (d) alienation of affection. (Adv. Dkt. 1 at 1-2). The allegations in the Circuit Court Complaint are nonspecific, but in general, Barbara asserted that Roger, April, and April's mother (who she did not identify by name) had conspired to defraud her of her share of the marital estate. (Adv. Dkt. 1-1). Barbara asked the Circuit Court to order an accounting for any funds transferred from any account that belonged to Roger and/or Barbara; to impress a lien on the real property owned by April's mother to the extent of the cost of any improvements; to award her compensatory and punitive damages in excess of $75,000.00; and to enjoin April from transferring any assets until a full and complete accounting was completed. (Adv. Dkt. 1-1 at 6).

In the divorce action, the Chancery Court dismissed Roger's complaint for divorce on March 26, 2014. (Adv. Dkt. 19-1 at 1). A hearing was held on Barbara's counterclaim for divorce on November 4, 2014. (Adv. Dkt. 19-1 at 1). In the Final Judgment of Divorce, entered on November 13, 2014, the Chancery Court granted Barbara a divorce from Roger on grounds of adultery as set forth in § 93-5-1 of the Mississippi Code. (Adv. Dkt. 19-1 at 2). The Chancery Court found that Barbara and Roger had agreed to a settlement of all property rights between them and, accordingly, incorporated into the Final Judgment of Divorce the Child Custody, Support and Property Settlement Agreement (the "PSA") (Adv. Dkt. 19-1 at 5-16) signed by them on November 4, 2014.

In the meantime, a jury trial in the Circuit Court Action was set to begin on October 31, 2017. (Adv. Dkt. 8 at 9). On October 28, 2017, however, April filed a petition for relief (the "Petition") (Bankr. Dkt. 1) under chapter 7 of the Bankruptcy Code.⁴ As a result, the automatic stay under § 362(a) went into effect and stayed the Circuit Court Action.

In her bankruptcy schedules, April listed total liabilities of $188,154.00 and assets of $16,958.00. (Bankr. Dkt. 9 at 1). The two largest debts that April listed in her bankruptcy schedules are: (a) loans made by Roger in the aggregate amount of $77,000.00, which she described as unliquidated and disputed, and (b) Barbara's tort claims in the amount of $75,000.00, which she similarly described as contingent, unliquidated, and disputed. (Bankr. Dkt. 9 at 14 & 16). In Amended Schedule J: Your Expenses ("Schedule J") (Bankr. Dkt. 36), April indicated that she has no "dependents" but that her household expenses include those of individuals other than herself.

On November 1, 2017, Barbara filed the Notice of Removal (Dist. Ct. Dkt. 1) in the U.S. District Court for the Southern District of Mississippi (the "District Court") styled, Barbara Bond Parker v. April F. Williamson Miller , Civil Action No. 2:17-cv-00190-KS-MTP, for the stated purpose of transferring the Circuit Court Action to this Court for consolidation with the not-yet-filed Adversary. To that end, Barbara filed the Plaintiff's Motion to Transfer Cause to Bankruptcy Court (Dist. Ct. Dkt. 2) on November 22, 2017.

April filed the Response to Notice of Removal and Motion to Remand (the "Motion to Remand") (Dist. Ct. Dkt. 9) on December 20, 2017; and Barbara filed the Plaintiff's Response in Opposition to Defendant's Motion to Remand (Dist. Ct. Dkt. 13) on December 22, 2017. Finally, on January 10, 2018, April filed the Debtor's Rebuttal to Plaintiff's Response to Motion to Remand (Dist. Ct. Dkt. 14). On February 20, 2018, the District Court entered the Memorandum Opinion and Order (the "District Court Order") (Dist. Ct. Dkt. 15; Adv. Dkt. 19-2), granting the Motion to Remand. The District Court reasoned that since April had no assets to distribute to creditors in the Bankruptcy Case, any potential judgment—regardless of the outcome—could not possibly affect the bankruptcy estate. The District Court ordered that the "case ... immediately be remanded to the Circuit Court of Lamar County, Mississippi." (Adv. Dkt. 19-2 at 3-4).

Before the entry of the District Court Order, Barbara filed the Adversary Complaint on January 30, 2018, in which she asked this Court to deny the dischargeability of the debt owed to her by April under § 523 as well as to deny April's discharge under § 727. As to the dischargeability of the debt, Barbara alleged that her claims against April for fraud, embezzlement, alienation of affection, and intentional infliction of emotional distress are not dischargeable in the Bankruptcy Case pursuant to § 523. Barbara did not specify, however, which one of the nineteen (19) sub-subsections of § 523(a) applies to April's debt.⁵ She incorporated by reference the facts and claims set forth in the Circuit Court Complaint, a copy of which she attached to the Adversary Complaint.⁶ (Adv. Dkt. 1 at 2). These facts are summarized as follows:

a. Fraud

Roger withdrew cash from joint accounts, individual accounts, or a business account for the benefit of April and April's mother.

In 2008, Roger arranged for April and her children to be housed in a "rental home" that he jointly owned with Barbara.

From 2008 until May, 2011, Roger and April engaged in a fraudulent scheme whereby Roger deposited $500.00 per month into a checking account jointly owned by Roger and Barbara, ostensibly representing rental payments. During this same period, Roger paid for April's utility expenses in excess of $9,700.00.

Roger purchased a mobile home, paid for improvements to the mobile home and to real property owned by April's mother, and bought automobiles, tires, and other unknown property for April's benefit.

April extorted funds from Roger or obtained funds from him by forging checks or writing unauthorized checks. Roger wrote checks payable to: (a) April and her children in excess of $150,000.00; (b) a credit card company for a card associated with April and April's mother in the amount of $54,000.00; and (c) April's mother in the amount of $12,400.00.

(Adv. Dkt. 1-1 at 2-3).

b. Embezzlement

April committed fraud and embezzlement by taking funds of the marital estate from Roger and his business.

(Adv. Dkt. 1-1 at 3).

c. Intentional Infliction of Emotional DistressAs an employee at Roger's farming business, April was familiar with Barbara and the Parker Children. She nonetheless engaged in conduct and activities that were illegal and adulterous for approximately seven (7) years "until such time as Roger left

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