Zimmerman v. Starnes
| Decision Date | 13 January 1984 |
| Docket Number | 82 Mc 0451.,Civ. A. No. 82-Z-2001,Bankruptcy No. 81 K 2679 |
| Citation | 35 BR 1018 |
| Parties | Steven L. ZIMMERMAN, Trustee, Plaintiff, v. Dr. Harry STARNES, Defendant. Harry Dee STARNES and Connie Margaret Starnes, Plaintiffs, v. Mary Virginia FIELDS and Steven L. Zimmerman, Trustee, Defendants. |
| Court | U.S. District Court — District of Colorado |
Richard Clark, Denver, Colo., T. Michael Turner, San Francisco, Cal., for Harry D. Starnes and Connie Margaret Starnes.
Arthur Lundquist-Kleissler, Solomon & Lindquist-Kleissler, Denver, Colo., for Steven L. Zimmerman, Trustee.
Ellen R. Welner, Denver, Colo., for Mary Virginia Fields.
The matter under review is an appeal from a final ruling of the United States Bankruptcy Court for this District dated September 15, 1982, and entitled "Order Discharging Back Child Support Payments Transferred to Debtor's Trustee in Bankruptcy," 23 B.R. 134. Jurisdiction to consider the appeal is found in paragraph 3(e) of this Court's General Procedure Order No. 1983-1.1
This Court has examined the appellate briefs, the record on appeal, the applicable statutory and case law, and the opinion of the Bankruptcy Court reported at 23 B.R. 134 (Bkrtcy.D.Colo.1982) sub nom In re Fields, and is fully advised and prepared to rule.
The undisputed facts reveal that Harry Dee Starnes (Starnes) and Mary Virginia Fields (Fields) were divorced by order of the Superior Court of the State of California for the County of Los Angeles on July 2, 1979. As part of the divorce decree, the California court ordered Starnes to pay child support to Fields. See Record on Appeal (R.), Vol. II.
Fields filed a voluntary Chapter 7 Bankruptcy petition in the Bankruptcy Court for the District of Colorado on June 8, 1981, and Steven L. Zimmerman was appointed trustee of her estate. Fields' petition listed as property of the estate certain back child support payments which Starnes had failed to make pursuant to the divorce decree. On November 30, 1981, the trustee (Zimmerman) commenced an adversary proceeding in the Bankruptcy Court under 11 U.S.C. §§ 3232 and 704(1)3 against Starnes to collect the child support arrearage.
On January 20, 1982, Starnes filed a voluntary Chapter 7 bankruptcy petition in the same court. The filing of the Starnes petition automatically stayed further action on the complaint filed by the trustee, under the provisions of 11 U.S.C. § 362. Starnes then filed a complaint to determine the dischargeability of the child support debt under 11 U.S.C. § 523(a)(5)(A),4 on March 3, 1982. Thereafter, the Bankruptcy Court granted Zimmerman's Motion for Consolidation and ordered the two adversary proceedings consolidated because of the substantial overlap of issues. As part of the consolidation, the Bankruptcy Court vacated the automatic stay for the trustee's complaint. R., Vol. I, p. 17.
At a hearing on August 17, 1982, the Bankruptcy Court found that the Child support arrearage amounted to $27,275.00, but took under advisement the issue of "whether or not the debt is discharged since by law the debt is the property of the Trustee of the estate of Mary Virginia Fields." R., Vol. I, p. 18.
In its Order of September 15, 1982, the Bankruptcy Court held that the debt was dischargeable. After determining that the trustee was "another entity" within the meaning of 11 U.S.C. § 523(a)(5)(A),5 the Bankruptcy Court stated: "The trustee's power to take over all legal and equitable property interests for the estate of the debtor as of the commencement of the estate under 11 U.S.C. § 541(a)(1) would be an assignment to another entity by operation of law under 523(a)(5)(A)." 23 B.R. at 136. Thus the Bankruptcy Court concluded that Fields' listing of the child support debt in her estate rendered that debt dischargeable under § 523(a)(5)(A) as a debt assigned to another entity. Id. at 137. Zimmerman has appealed from that ruling, and from the order of the Bankruptcy Court dismissing his complaint.6
The Bankruptcy Court stated that "the debt of Starnes for the back child support is now property of the Trustee of the estate of Debtor Mary Virginia Fields." 23 B.R. at 135 (emphasis added). It is basic to bankruptcy law, however, that an estate includes only property interests of the debtor, as set forth in 11 U.S.C. § 541(a)(1).7 "The legislative history of § 541(a)(1) indicates that Congress intended to exclude from the estate property of others in which the debtor had some minor interest such as a lien or bare legal title." United States v. Whiting Pools, Inc., ___ U.S. ___, ___ n. 8, 103 S.Ct. 2309, 2313 n. 8, 76 L.Ed.2d 515, 522 n. 8 (1983). The Bankruptcy Court did not thoroughly analyze the issue of whether the child support debt was a property interest which belonged to the debtor Fields, or to her child.
Since 11 U.S.C. § 541 contains no test for determining what is or is not "property" for the purposes of the debtor's estate, state law furnishes the guidelines to establish which interests of the debtor are properly included. Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979).
This is especially true in the area of domestic relations, including support payments ordered pursuant to divorce decrees, since "Congress was undoubtedly aware that the United States courts have no jurisdiction over divorce or alimony allowances." In re Spong, 661 F.2d 6, 9 (2d Cir.1981). "In the absence of specific conflict with federal law, we must look to state law to delineate the parties' state-created support obligations. . . ." Matter of Catlow, 663 F.2d 960, 962 (9th Cir.1981) (). Thus the Court must consider whether the right to receive child support is a property right of the parent or of the child, as interpreted under applicable state law.
The issue of which state's law should be examined to determine the nature of the property interest in the instant case is a question not free from doubt.8 This Court believes, however, that California law should provide primary guidance, since the divorce decree was issued by the courts of that state. See, e.g., Gray v. Snyder, 704 F.2d 709, 712 and n. 3 (4th Cir.1983) (); In re Welch, 31 B.R. 537, 539 (Bkrtcy.D.Kan.1983) ().
Under California law, the right to support belongs to the child, who is the real party in interest when a parent seeks to enforce that right. See Cal.Civ.Code §§ 196, 196a, 206, 242, 4700 (West 1982); Elkind v. Byck, 68 Cal.2d 453, 67 Cal.Rptr. 404, 407, 439 P.2d 316, 319 (1968) (); Ruddock v. Ohls, 91 Cal.App.3d 271, 277-78, 281-82, 154 Cal. Rptr. 87, 90-91, 93-94 (1979) ().
The only other state law logically to apply in this case is Colorado's, where the two petitions were filed and where both debtors resided for some time. Under Colorado law, the result is the same. McQuade v. McQuade, 145 Colo. 218, 358 P.2d 470, 472 (1960). See also County of Clearwater, Minn. v. Petrash, 198 Colo. 231, 598 P.2d 138, 139 (1979) (); Kansas State Dept. v. Henderson, 620 P.2d 60, 61-62 (Colo.App.1980) ().
In addition, both California and Colorado have adopted the Revised Uniform Reciprocal Enforcement of Support Act (URESA). See Cal.Civ.Proc.Code § 1650, et seq. (West 1982); C.R.S. § 14-5-101, et seq. (1973). Under URESA, the rights and duties of support are determined by (1) the law of any state in which the supporting parent resided during the period for which support is sought, or (2) the law of the state where the supporting parent currently resides, at the election of the person enforcing the right to support.9 Cal.Civ.Proc.Code § 1670; C.R.S. § 14-5-108.10 Support rights and/or duties created in one URESA state are enforceable in any other URESA state. Id.
Thus this Court concludes that under either California or Colorado law, the right to receive the back child support belongs to the child and not to Fields, even though Fields may seek to enforce that right in her child's name. Accordingly, the outstanding debt of Starnes should not have been listed as part of the wife's estate, and that listing was of no force and effect. See Welch, 31 B.R. at 539-40. This Court agrees with the analysis and conclusion of the Welch court that 31 B.R. at 540.
It follows that no "assignment" of the debt by operation of law to the trustee could have occurred, and therefore 11 U.S.C. § 523(a)(5)(A) is inapplicable. The Court therefore determines that, based on the facts presented on appeal, Starnes' debt for back child support is not dischargeable under 11 U.S.C. § 523(a)(5)(A).11
In addition, the Court notes that, while Fields herself may have a right to enforce her child's interest in collecting the support arrearage, Fields' trustee (Zimmerman) does not. Therefore, the trustee was not a proper party to bring suit in the Bankruptcy Court to enforce the claim against Starnes.
In view of the foregoing opinion, it is
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