In Re: Gary Fox ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
11-27-2007
In Re: Gary Fox
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-4075
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2007
Recommended Citation
"In Re: Gary Fox " (2007). 2007 Decisions. Paper 190.
http://digitalcommons.law.villanova.edu/thirdcircuit_2007/190
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2007 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-4075
IN RE: GARY J. FOX
Appellant
GARY J. FOX
v.
LAURA A. FOX
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D. C. No. 05-cv-02391)
District Judge: Hon. James M. Munley
Argued on September 27, 2007
Before: AMBRO, JORDAN and ROTH, Circuit Judges
(Opinion filed : November 27, 2007)
John J. Martin, Esquire
1022 Court Street
Honesdale, PA 18431
Counsel for Appellant
Marshall E. Anders, Esquire
Nicholas J. Masington, III, Esquire
Anders & Masington, LLC
18 North Eighth Street
Stroudsburg, PA 18360
Counsel for Appellee
OPINION
ROTH, Circuit Judge:
This is an appeal from the order of the United States District Court for the Middle
District of Pennsylvania, denying the appeal of Gary Fox (Husband) from the Order of the
United States Bankruptcy Court for the Middle District of Pennsylvania, entering judgement
in favor of Laura A. Fox (Wife) on Husband’s complaint for intentional and willful violation
of the discharge provision of 11 U.S.C. § 524. For the reasons stated below, we will affirm
the order of the District Court.
I. BACKGROUND
As the facts are well known to the parties, we give only a brief description of the
relevant issues and procedural posture of the case.
Husband filed for relief under Chapter 7 of the United States Bankruptcy Code on
January 6, 2003. When the bankruptcy petition was filed, a divorce petition was pending in
the Court of Common Pleas. As a part of the divorce proceeding, Wife had moved for
equitable distribution of the marital property. However, a hearing had not yet been held by
2
the state court on the distribution motion. On April 28, 2003, Wife filed a motion for relief
from the automatic stay in bankruptcy in order to allow the divorce action to proceed. On
June 2, 2003, Husband and Wife entered into a stipulation to enable Wife to proceed to
litigate the divorce case. The stipulation was made an order of the District Court on June 3,
2003.
On June 27, 2003, Husband received his discharge from bankruptcy under 11 U.S.C.
§ 727, discharging him from all debts that arose before the bankruptcy. After this discharge,
Wife continued to assert a claim against Husband in the divorce proceeding for equitable
distribution of the marital property. On August 5, 2004, Husband filed a complaint for
intentional and willful violation of the section 524 discharge provision due to Wife’s
continued efforts to obtain equitable distribution. On October 13, 2005, the Bankruptcy
Court concluded that Wife did not violate the discharge injunction by continuing to pursue
equitable distribution in the state court. Husband appealed. The District Court denied the
appeal on the basis that Wife did not violate the discharge provision of 11 U.S.C. § 524 by
continuing to seek equitable distribution of the marital estate. Husband again appealed.
II. JURISDICTION & STANDARD OF REVIEW
The District Court had jurisdiction over the bankruptcy appeal pursuant to 28 U.S.C.
§ 158(a)(1). We have jurisdiction under 28 U.S.C. § 1291.
Bankruptcy Rule 8013 controls our standard of review, and provides that “findings
of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly
erroneous, and due regard shall be given to the opportunity of the Bankruptcy Court, to judge
3
the credibility of the witnesses.” Landon v. Hunt, 877 F.2d 829 (3d Cir. 1992) (citations
omitted). Our standard of review is plenary over any conclusions of law by the bankruptcy
or district courts. Id.
III. DISCUSSION
There is a split of authority within this Circuit’s bankruptcy courts on the issue of
dischargeability in bankruptcy of claims for equitable distribution of marital property.
Compare In re Schorr, 299 B.R. 97 (Bankr. W.D. Pa. 2003) (holding wife’s claim for
equitable distribution was a “debt” discharged in bankruptcy); with In re Scholl, 234 B.R.
636 (Bankr. E.D. Pa. 1999) (holding request for equitable distribution pending at time of
bankruptcy is not a “debt” dischargeable under the Bankruptcy Code). We decline, however,
to resolve this conflict in the instant appeal because we find that the stipulation entered into
by the parties during the bankruptcy proceedings controls the outcome.1 The stipulation
expressly and specifically gave the parties the right to proceed with the divorce action
pending before the state court, of which the Wife’s claim for equitable distribution was a
part. The stipulation placed no limitation or restriction upon Wife’s right to pursue any part
of the divorce action. We, therefore, conclude that her pursuit of her equitable distribution
claim is covered by the stipulation. Because the parties stipulated to Wife’s ability to pursue
1
The enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 (Pub. L. 109-8, 119 Stat. 54) has resolved this issue for future cases. BAPCPA
amended, inter alia, section 523(a) of the Bankruptcy Code to make non-dischargeable any
debt “to a spouse . . . [or] former spouse . . . 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 a court of record . . ..
4
the divorce action – of which the claim for equitable distribution was a part – that claim was
not discharged in bankruptcy. As a consequence, Wife did not violate the discharge
provision in pursuing that claim.
IV. CONCLUSION
For the above reasons, we will affirm the District Court’s order.
5