Froncillo v. Gunn

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
11-16-2005
In Re: Froncillo
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-3586
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Recommended Citation
"In Re: Froncillo " (2005). 2005 Decisions. Paper 224.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 04-3586
___________
IN RE: FRANCESCO P. FRONCILLO,
Debtor
FRANCESCO P. FRONCILLO
a/k/a FRANK P. FRONCILLO
v.
DIANE L. GUNN
Francesco P. Froncillo, Appellant
___________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Nos. 03-cv-288E, 03-cv-289E, 03-cv-290E )
District Judge: The Honorable Maurice B. Cohill, Jr.
___________
Submitted Under Third Circuit LAR 34.1(a)
October 18, 2005
Before: SMITH, STAPLETON, and NYGAARD, Circuit Judges.
(Filed: November 16, 2005 )
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OPINION OF THE COURT
___________
NYGAARD, Circuit Judge.
This is an appeal from the District Court’s order upholding determinations
of the Bankruptcy Court that despite Francesco Froncillo’s bankruptcy filing, he owed
long term support to his ex-spouse Diane Gunn, and that Froncillo should not be allowed
to discharge that support through his declaration of Bankruptcy. We have jurisdiction
pursuant to 28 U.S.C. § 158(d).
Froncillo raises a number of issues on appeal; all of them are without merit.
The effect of Gunn’s intervening bankruptcy filing on Froncillo’s bankruptcy petition,
however, merits brief discussion. The crux of this issue revolves around the fact that after
the Bankruptcy Court’s opinion but before the District Court filed its decision affirming
the Bankruptcy Court opinion, Gunn filed for bankruptcy herself. Froncillo now argues
that Gunn’s own bankruptcy filing causes her assets, which include Froncillo’s support
payments, to be assigned to her estate under operation of law. He further argues that this
assignment allows his debt, which includes the support payments, to be discharged under
the relevant provisions of the Bankruptcy Code, thereby allowing him to avoid paying
them.
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We fail to find any support for Froncillo’s claim and we will affirm the
District Court’s order adopting the findings of the Bankruptcy Court.
I.
The relevant portions of the Bankruptcy Code provide that if a debt
stemming from a separation agreement is assigned to another entity, either voluntarily or
by operation of law, the creditor may not object to discharge of that debt. 11 U.S.C. §
523(a)(5)(A). We leave for another day, however, the issue of whether Gunn’s filing of a
chapter 7 bankruptcy petition, along with her claim that her right to support payments was
exempt property, effected a transfer constituting an “assignment” for purposes of §
523(a)(5)(A). That issue need not be addressed because the timing of the events here
easily resolves the question of dischargeability.
We conclude, in accordance with those courts that have addressed it, that a
determination on the dischargeability of debts will be controlled by either the date of the
debtor’s filing for bankruptcy or the date of the debtor’s dischargeability hearing. See In
re Combs, 101 B.R. 609 (B.A.P. 9 th Cir.1989); In re Tessler, 44 B.R. 786(Bankr.S.D.Cal.1984). We decline to decide which of these two dates applies here since,
on either date, Gunn had not filed for bankruptcy, effectively destroying Froncillo’s
claim. The question, therefore, of whether Gunn has assigned her support payments such
that Froncillo’s debt to pay them is discharged must be answered in the negative.
3
In In re Combs, the Bankruptcy Appellate Panel for the Ninth Circuit held
that the date for determination of the discharge of debts was the date of bankruptcy filing.
They wrote:
[t]he law is not well-settled on whether, for purposes of dischargeability,
courts should apply the facts in existence on the date of the dischargeability
hearing or the facts as they existed when the bankruptcy petition was filed
... We hold that the operative date for determining the facts relating to the
dischargeability of an obligation is the date of the filing of the bankruptcy
petition.
In re Combs, 101 B.R. at 614. In addition, in In re Tessler, upon addressing the same
question, the Bankruptcy Court held that the operative date of determination on the
dischargeability of debts is the date of the filing of the bankruptcy petition. In re
Tessler, 44 B.R. at 788. There, on facts quite similar to this case, a husband sought to
discharge his debt of support payments by claiming that his former wife’s bankruptcy
filing should release him from his responsibility to pay. However, because he filed for
bankruptcy first the court looked to his debts as they existed on the date he filed for
bankruptcy for the purposes of determining dischargeability.
Froncillo is unable to marshal any support for his contention that the
discharge date can or should be anything other than the date of bankruptcy filing or, in
rare instances, the date of the discharge hearing. Here, Froncillo concedes that Gunn filed
for bankruptcy not only after Froncillo himself filed for bankruptcy but also after the
dischargeability hearing occurred. Because Gunn filed for bankruptcy after Froncillo
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filed for bankruptcy and after the date of the discharge hearing, Froncillo’s debt to Gunn
is nondischargeable under the Bankruptcy Code. See 11 U.S.C. § 523(a)(5)(A).
II.
Froncillo also argues that our decision in In re Gianakas, 917 F.2d 759 (3d
Cir. 1990) was erroneous and based on an incorrect interpretation of 11 U.S.C. §
523(a)(5)(B) and that the Bankruptcy Court’s reliance on this opinion requires us to
reverse its decision. In addition, Froncillo argues that we should modify In re Gianakas
to account for estoppel, the plain language of the writing between the parties, and the
current financial circumstances of the parties. We disagree and find these claims to be
meritless. We are not at liberty to overrule or subvert a decision of a prior panel. See
I.O.P. 9.1. In re Gianakas is and will continue to be controlling in this Circuit.
Froncillo’s claim that In re Gianakas misinterpreted the plain language of § 523(a)(5)(B)
is completely without merit and flies in the face of the actual plain language of the statute.
We now interpret that language, as we did in In re Gianakas, to prevent a person from
discharging any obligation stemming from a separation agreement that, whatever its label,
was intended by the parties to be in the nature of alimony, maintenance, or support at the
time the obligation was undertaken. As we have decided that In re Gianakas remains
controlling law, Froncillo’s second argument that it does not apply or should be modified
similarly fails.
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III.
Accordingly, we will affirm the District Court’s opinion adopting the
Bankruptcy Court’s well-reasoned determination.
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