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IN RE GORDY, 16-1093. (2016)

Court: United States Bankruptcy Court, N.D. Indiana Number: inbco20170221881 Visitors: 8
Filed: Nov. 28, 2016
Latest Update: Nov. 28, 2016
Summary: DECISION ROBERT E. GRANT , Bankruptcy Chief Judge . The chronology of events leading up to this adversary proceeding is simple. May 16, 2016: 1 Debtor ordered by Sonoma County (California) Superior Court to pay $10,000 in attorney fees to Ms. Coffman (Mrs. Gordy's divorce counsel) from his pension. June 22, 2016: Debtor filed bankruptcy. August 30, 2016: Defendants relieved of the automatic stay to enforce the state court order and proceed against the debtor's pension. Septembe
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DECISION

The chronology of events leading up to this adversary proceeding is simple.

▸ May 16, 2016:1 Debtor ordered by Sonoma County (California) Superior Court to pay $10,000 in attorney fees to Ms. Coffman (Mrs. Gordy's divorce counsel) from his pension. ▸ June 22, 2016: Debtor filed bankruptcy. ▸ August 30, 2016: Defendants relieved of the automatic stay to enforce the state court order and proceed against the debtor's pension. ▸ September 9, 2016: Request for an order filed in Sonoma County Superior Court which was scheduled for a hearing to be held on October 17, 2016. ▸ October 3, 2016: Debtor received a discharge. ▸ November 4, 2016: Judgment entered by default declaring debtor's obligation pursuant to the divorce court's order is non-dischargeable.

The debtor/plaintiff believes the filing in the Sonoma County Superior Court violated the automatic stay and/or the discharge injunction and so initiated this adversary proceeding seeking compensatory and punitive damages, as well as attorney fees. The matter is before the court on the defendants' motion to dismiss, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, due to the failure to state a claim upon which relief can be granted.

The current standard governing a motion to dismiss requires:

First, the complaint must describe the claim in sufficient detail to give the defendant "fair notice of what the . . . claim is and the grounds upon which it rests" . . . Second, its allegations must plausibly suggest that the plaintiff has a right to relief raising the possibility above a "speculative level"; if they do not, the plaintiff pleads itself out of court. E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964) (internal citations omitted). See also, Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009); In re Eisaman, 387 B.R. 219, 222 (Bankr. N.D. Ind. 2008); In re Schmucker, 376 B.R. 256, 258 (Bankr. N.D. Ind. 2007).

In making the determination, the court accepts the factual allegations in the complaint as true and draws all reasonable inferences in plaintiff's favor. Christensen v. County of Boone, Illinois, 483 F.3d 454, 457 (7th Cir. 2007). "Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Venture Associates Corp. v. Zenith Data Systems Corp., 987 F.2d 429, 431 (7th Cir. 1993).

To survive a motion to dismiss, the plaintiff must allege facts demonstrating a plausible claim for relief. Twombly, 550 U.S. at 555-56, 127 S.Ct. at 1965-65. The complaint in this proceeding is replete with conclusions and characterizations but a bit sparse when it comes to actual facts concerning the defendants' alleged misdeeds. There really is only one: the filing of September 9.2

The plaintiff is trying to make some kind of end-run around the state court litigation or is somehow asking this court to instruct the state court concerning the scope of the automatic stay and the impact of this court's order upon that litigation. That is not appropriate. "Disputes about the effect of a decision in one case on the prosecution of another are for the judge presiding in the second case." Pettibone Corp. v. Easley, 935 F.2d 120, 123 (7th Cir. 1991). See also, Midway Motor Lodge of Elk Grove v. Innkeepers' Telemanagement & Equipment Corp., 54 F.3d 406, 409 (7th Cir. 1995) ("the court rendering the first judgment does not get to determine that judgment's effect; the second court is entitled to make its own decision."); Teamsters Local 282 Pension Trust Fund v. Angelos, 762 F.2d 522, 525 (7th Cir.1985) (second court decides for itself preclusive effect of first litigation). Non-bankruptcy courts, both state and federal, have the power to decide whether and to what extent the automatic stay applies to the cases before them. Chao v. Hospital Staffing Services, Inc., 270 F.3d 374, 384 (6th Cir. 2001); In re Dunbar, 235 B.R. 465, 472 (9th Cir, BAP 1999); Matter of Mahurkar Double Lumen Hemodialysis Catheter Patent Litigation, 140 B.R. 969, 973 (N.D. Ill. 1992); Matter of Lengacher, 485 B.R. 380, 384 (Bankr. N.D. Ind. 2012). If the debtor believes the September 9 filing exceeded the scope of this court's order relieving the defendants of the automatic stay, that is a matter that can be presented to the state court. Cf., Pettibone Corp. v. Easley, 935 F.2d 122 ("even federal defenses must be presented to the courts in which the claims are pending.").

Not only has this court terminated the automatic stay but, since it did so, the debtor has received a discharge and his obligations under the May 17 order declared non-dischargeable. Most, although not all, obligations arising out of domestic relations proceedings are excepted from a debtor's discharge by §523(a)(5) and/or §523(a)(15). Moreover, the issue of whether a particular obligation arising out of a domestic relations proceeding is or is not dischargeable does not have to be decided by the bankruptcy court; the state courts may also do so. In re Everly, 346 B.R. 791, 797 (8th Cir. BAP. 2006) (state courts have concurrent jurisdiction to determine the dischargeability of debts other than those under § 523(a)(2), (4) and (6)). To the extent the debtor believes that some aspect of the California court's orders created a dischargeable debt, the state court is fully capable of determining that issue. Indeed, it may be better positioned to do so because it better understands the rights California law associates with orders from divorce proceedings and the consequences inherent in the failure to obey them. Cf., Matter of Sheridan, 105 F.3d 1164, 1166 (7th Cir. 1997) (if underlying debt arising from contract is nondischargeable, contractual obligation to pay attorney fees is nondischargeable as well); Mayer v. Spanel Intern. Ltd., 51 F.3d 670, 677 (7th Cir. 1995) (attorney fees incurred collecting loan that was nondischargeable on fraud grounds were also nondischargeable).

Plaintiff's complaint fails to state a claim upon which relief can be granted. Furthermore, it is clear that any opportunity to file an amended complaint would be futile. See, Barry Aviation v. Land O'Lakes Municipal Airport, 377 F.3d 682, 687 (7th Cir. 2004); Garcia v. City of Chicago, 24 F.3d 966, 970 (7th Cir. 1994). This adversary proceeding will therefore be dismissed. An order doing so will be entered.

FootNotes


1. Depending on whether one refers to the complaint, the motion or the September filing, the date of the May order varies. It is referred to as an order of May 16, May 17 and May 20 leading to some confusion as to whether there are multiple orders issued on each of those dates or one order issued on one of those dates and the other references are simply incorrect.
2. Although the complaint states that the filing of September 9 is attached, it was not. It did, however, accompany the defendants' motion. Since it was referred to in the complaint and is central to the plaintiff's claim, the court may properly consider it in deciding the motion to dismiss. Venture Associates Corp., 987 F.2d at 431.
Source:  Leagle

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