Thomas J. Tucker, United States Bankruptcy Judge.
Plaintiff Joel Rosenfeld is the ex-husband of Defendant Amy Rosenfeld (the "Debtor"). Debtor filed a voluntary petition for relief under Chapter 7 on September 10, 2014, commencing Case No. 14-54351. On March 31, 2015, Plaintiff filed this adversary proceeding, seeking an order denying the Debtor a discharge under several provisions of 11 U.S.C. § 727(a).
It appeared to the Court that any debt the Debtor owes to Plaintiff is nondischargeable in the Debtor's Chapter 7 case under 11 U.S.C. § 523(a)(15). As a result, the Court questioned whether Plaintiff has the requisite personal stake in the outcome of this § 727(a) action to support subject matter jurisdiction. On June 5, 2015, the Court entered an order requiring Plaintiff to show cause in writing why this adversary proceeding should not be dismissed, for lack of subject matter jurisdiction, based on this Court's reasoning in Mapley v. Mapley, 437 B.R. 225 (Bankr.E.D.Mich. 2010) (Docket # 14, the "Show-Cause Order").
On June 19, 2015, Plaintiff filed a brief in response to the Show-Cause Order (Docket # 16). On June 27, 2015, the Court entered an order that permitted the Debtor to file a response to the Show—
The Court has considered the arguments of the parties, and the Court concludes that a hearing is not necessary; and that this adversary proceeding must be dismissed, because the Court lacks subject matter jurisdiction.
Prepetition, on July 1, 2013, a judgment of divorce was entered between the parties in the Oakland County, Michigan Circuit Court (the "Divorce Judgment").
The [Debtor] shall notify the Friend of the Court in writing whenever the address of the minor children changes.
After the Divorce Judgment was entered, Plaintiff discovered that the marital home was contaminated by mold, which was causing pre-existing medical conditions of the children to worsen while they were in the Debtor's custody. Plaintiff filed a motion in the state court divorce case, seeking an order requiring the Debtor to remediate the mold problem in the marital home, and removing the children from the home until such remediation was completed.
The parties later reached a settlement of the motion, and on February 12, 2014, the state court entered a stipulated order entitled "Stipulated Order Regarding Plaintiff's Motion Concerning Marital Home" (the "Stipulated Order"), which provided, in relevant part:
On September 3, 2014, Plaintiff filed a motion in the state court to hold the Debtor in contempt of court (the "Contempt Motion"), based on the Debtor's alleged violation of the Stipulated Order and several provisions of the Divorce Judgment.
On October 8, 2014, the state court entered an order holding the Debtor in contempt (the "Contempt Order"),
On June 8, 2015, Plaintiff filed a proof of claim (Claim No. 2, "Proof of Claim") in the Debtor's bankruptcy case (Case No. 14-54351). The Proof of Claim states, in the section entitled "Basis for Claim": "Claim for sanctions and divorce judgment claims." In his brief in response to the Court's Show-Cause Order, Plaintiff alleges that the basis for the Proof of Claim is as follows:
The issue now before the Court, raised by the Show-Cause Order, is whether this Court has subject matter jurisdiction over this adversary proceeding. "[F]ederal courts have a duty to consider their subject matter jurisdiction in regard to every case and may raise the issue sua sponte." Answers in Genesis of Kentucky, Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 465 (6th Cir.2009) (citations omitted); see also Carto v. Oakley (In re Oakley), 503 B.R. 407, 421 (Bankr.E.D.Pa.2013)("Questions of standing must be considered sua sponte by federal courts, including bankruptcy courts, as they are akin to subject matter jurisdiction.").
Imhoff Inv., L.L.C. v. Alfoccino, Inc., 792 F.3d 627, 631 (6th Cir.2015)(emphasis added); see also Lindsey v. Pinnacle Nat'l Bank (In re Lindsey), 726 F.3d 857, 858 (6th Cir.2013)(explaining that "subject matter jurisdiction is neither forfeitable nor waivable," and that whether the court has subject matter jurisdiction is an issue "that takes absolute priority over all merits questions in a case").
Clausen Law Firm, PLLC v. Nat'l Acad. of Continuing Legal Educ., 827 F.Supp.2d 1262, 1267 (W.D.Wash.2010)(emphasis added); see also Kentucky v. United States ex rel. Hagel, 759 F.3d 588, 595 (6th Cir.2014)(emphasis added) (citations omitted) ("`Under Article III of the Constitution, federal courts may adjudicate only actual, ongoing cases or controversies.' `When—for whatever reason—the dispute discontinues or
The Court concludes that it does not have subject matter jurisdiction over this adversary because it cannot award any meaningful relief to the Plaintiff. This is so because even if the Plaintiff is successful in obtaining an order denying Debtor a discharge under 11 U.S.C. § 727(a), which is the only relief Plaintiff is requesting in this adversary proceeding, he would gain nothing for himself, beyond what he already has. If Debtor is denied a discharge, any debt the Debtor owes to Plaintiff will not be discharged in Debtor's Chapter 7 bankruptcy case. But Plaintiff already has this relief, because, as discussed below, any debt the Debtor owes to Plaintiff is nondischargeable under 11 U.S.C. § 523(a)(15), and thus will not be discharged in this Chapter 7 bankruptcy case.
In a similar case, Mapley v. Mapley, 437 B.R. 225 (Bankr.E.D.Mich.2010), this Court dismissed an adversary proceeding seeking a denial of the debtor's discharge brought by the plaintiff (the ex-wife of the debtor). That dismissal was based on a lack of subject matter jurisdiction, where all of the debts owed by the debtor to the plaintiff were nondischargeable under either 11 U.S.C. § 523(a)(5) or § 523(a)(15). This Court reasoned:
Id. at 228-29 (footnotes omitted)(citation omitted).
In Plaintiff's brief in response to the Court's Show-Cause Order, Plaintiff attempts to distinguish the facts of this case from those in Mapley. First, Plaintiff argues that the third component of his claim; namely the $30,000 portion of the claim for attorney fees and costs, is dischargeable in the Debtor's bankruptcy case, whereas the debt in Mapley was entirely nondischargeable.
The Court concludes that, in the event that the state court enters an order requiring the Debtor to pay to Plaintiff the attorney fees and costs he incurred as a result of her being held in contempt of the Stipulated Order, such debt would be nondischargeable under § 523(a)(15).
Section 523(a)(15) states:
11 U.S.C. § 523(a)(15) (emphasis added). Any debt owing by the Debtor to the Plaintiff arising out of the Contempt Order would be owed to a former spouse (Plaintiff), and would be a debt incurred by the Debtor in connection with a divorce decree (the Divorce Judgment) or other order of a court of record (the Contempt Order entered by the state court in the divorce case—the Oakland County Circuit Court). The Stipulated Order that the Debtor violated concerned and modified the custody arrangement in the Divorce Judgment. And the Contempt Order, in turn, was based on the Debtor's violation of the Stipulated Order. Therefore, contrary to Plaintiff's argument, the Stipulated Order and the Contempt Order were both "in connection with" the "divorce decree" within the meaning of § 523(a)(15).
It is immaterial, for purposes of § 523(a)(15), whether a divorce-related debt arises after a judgment of divorce has been entered. And it makes no difference, for purposes of § 523(a)(15), whether the claim arises out of an obligation in the divorce judgment itself or out of an order entered after entry of the divorce judgment that creates new or modified obligations between the divorcing parties. Both types of debts are made in connection with the divorce decree or other order of a court of record. See Tritt v. Tritt (In re Tritt), No. 12-43446, 2014 WL 1347763, at *1 (Bankr.E.D.Tex. April 4, 2014)(holding that debts under three separate orders entered after a divorce judgment was entered between ex-spouses in a divorce case were nondischargeable under § 523(a)(15): (1) an order sanctioning the ex-wife in the amount of $1,000 for post-judgment bad faith conduct; (2) an order holding the ex-wife in contempt for violating numerous provisions of a protective order to which she previously agreed; and (3) an order requiring the ex-wife to pay $115,432.61 in attorney fees, expenses, and costs plus interest incurred by the ex-husband in defending the ex-wife's post-judgment motion for modification of custody)); Reissig v. Gruber (In re Gruber), 436 B.R. 39 (Bankr.N.D.Ohio 2012)(stating, in dicta, that an award of attorney fees in a post-divorce
Plaintiff has cited no authority supporting his argument that § 523(a)(15) does not apply to the debt arising from the Contempt Order. And the Debtor in this case agrees that the debt at issue is non-dischargeable under § 523(a)(15).
Because the debt at issue is nondischargeable under § 523(a)(15), the Plaintiff here, like the plaintiff in Mapley, lacks standing in this adversary proceeding. Because Plaintiff already has the entire relief he seeks for himself in this adversary proceeding, he has no personal stake in pursuing a denial of the Debtor's discharge, and the Court cannot afford him any meaningful relief beyond what he already has received.
Nor does Plaintiff have standing to object to the Debtor's discharge on behalf of any other creditors. See Mapley, 437 B.R. at 229 (quoting Day v. Klingler (In re Klingler), 301 B.R. 519, 523 (Bankr. N.D.Ill.2003) ("[T]he debt Klingler owes Day will not be discharged. . . . Day no longer has any personal stake in any other discharge decision. . . . At most, he is litigating now to vindicate the rights of any remaining creditors, which he cannot do. Or else he is simply litigating out of distaste for Klingler, which he also cannot do."). That is something the United States Trustee and the Chapter 7 trustee may be able to do, in effect, under 11 U.S.C. § 727(c)(1),
Plaintiff argues that, as a "creditor" of the Debtor, he is authorized to file an adversary proceeding objecting to the Debtor's discharge by § 727(c)(1).
Plaintiff argues further that even if he is a creditor with a nondischargeable claim, and therefore cannot allege an individualized injury that will occur if the Debtor's discharge is granted, Plaintiff still has standing to pursue the § 727 action on behalf of "(1) the entire creditor body, (2) the federal judicial system, and (3) the people of the United States" who all "have a vested interest" in "deny[ing] a discharge to `those debtors who fall within any of the exceptions set forth in § 727(a).'"
None of these arguments have merit. Even if Plaintiff was authorized generally to file the adversary proceeding under § 727(c)(1) due to his status as a creditor, he must be viewed as lacking standing to prosecute the adversary proceeding as soon as the Court determines that he is owed only a nondischargeable debt. (And this Court has now made this determination as to Plaintiff).
Although a case or controversy may exist at the time the litigation is commenced, it must continue at every stage of a proceeding:
Davis v. Federal Election Commission, 554 U.S. at 732-33, 128 S.Ct. 2759; see, e.g., Chamber of Commerce of U.S. v. E.P.A., 642 F.3d 192, 199 (D.C.Cir.2011). The doctrine of mootness "has been described as `the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of litigation (standing) must continue throughout its existence (mootness).'" Arizonans for Official English v. Arizona, 520 U.S. 43, 68, n. 22, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (quoting United States Parole Comm'n v. Geraghty, 445 U.S. 388, 397, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980), which quoted Monaghan, Constitutional Adjudication: The Who and When, 82 Yale L.J. 1363, 1384 (1973)).
421 Chestnut Partners, LP v. Aloia (In re Aloia), 496 B.R. 366, 377 (Bankr.E.D.Pa.2013)(emphasis added). "[W]hen the asserted harm is a `generalized grievance' shared in substantially equal measure by all or a large class of citizens, that harm alone normally does not warrant exercise of [federal] jurisdiction." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). And the fact that third parties may benefit if the Debtor is denied a discharge also does not confer standing on Plaintiff, under the facts of this case. In Seldin, the United States Supreme Court explained:
Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (emphasis added)(footnotes omitted).
In re Levine, 287 B.R. 683 (Bankr. E.D.Mich.2002), a case cited by Plaintiff in support of his position, is not on point. Levine concerned only the settlement of a § 727(a) action by the Chapter 7 trustee, not dismissal of the action for lack of jurisdiction. The issue in Levine was not whether the plaintiff chapter 7 trustee had standing to prosecute an adversary proceeding objecting to the debtor's discharge under § 727(a), but rather whether the plaintiff trustee could settle the objection to the discharge for consideration. Levine has nothing to do with the jurisdictional issue in this case.
Fed. R. Bankr.P. 7041 and LBR 7041-1 also do not apply, and do not inform the Court on the jurisdictional issue in this case. Those rules only apply when the plaintiff, singly or jointly with the other parties, seeks to voluntarily dismiss a § 727 action. Fed. R. Bankr.P. 7041 states:
(Emphasis added).
LBR 7041-1 states:
(Emphasis added).
Neither Fed. R. Bankr.P. 7041 nor LBR 7041-1 apply to dismissals by the Court, due to a lack of subject matter jurisdiction.
For the reasons stated in this opinion, the Court will enter an order dismissing this adversary proceeding, for lack of subject matter jurisdiction.