Cowart v. White

698 N.E.2d 1223, 1998 Ind. App. LEXIS 1353, 1998 WL 547080
CourtIndiana Court of Appeals
DecidedAugust 31, 1998
DocketNo. 29A02-9803-CV-275
StatusPublished

This text of 698 N.E.2d 1223 (Cowart v. White) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cowart v. White, 698 N.E.2d 1223, 1998 Ind. App. LEXIS 1353, 1998 WL 547080 (Ind. Ct. App. 1998).

Opinion

OPINION

BAKER, Judge.

Appellant-petitioner William T. Cowart (Tom) appeals from a 1997 trial court order which found him in contempt of the 1996 dissolution decree ending his marriage to Cathy Cowart. Tom maintains that the court improperly modified a final judgment. He claims that the court order is contrary to law in denying him the protection he had been granted under the federal Bankruptcy Code. He argues that the court improperly exercised its contempt powers. Finally, he contests the court’s requirement that he pay Cathy’s attorney fees.

FACTS

The pertinent facts are not, for the most part, in dispute. Tom and Cathy Cowart were married on February 10, 1973. Tom subsequently filed for divorce, and the trial [1225]*1225court issued a final dissolution decree on October 7, 1996. Tom was given physical custody of the only child of the marriage, and Cathy was orderéd to pay support. The Cowarts owned four pieces of real estate, and the decree awarded one piece to each. The real estate awarded to Tom was the marital residence. The court designated the two remaining pieces of property to be sold and the proceeds to be distributed as follows: $36,000 to Cathy “to equalize distribution” and the balance divided with Tom receiving forty percent (40%) and Cathy receiving sixty percent (60%).

On February 14, 1997, Tom filed bankruptcy under 11 U.S.C. Chapter 7. No dis-chargeability complaint pertaining to the dissolution was filed in the bankruptcy proceedings. However, on April 9, 1997, Cathy filed with the trial court a Motion to Modify the Dissolution Decree and a Motion for Rule to Show Cause requesting that the court find Tom in contempt of the dissolution decree, alleging that Tom had allowed the real estate of the marriage to run down in an attempt to reduce the amount she would receive from the sales, and had failed to pay taxes and insurance on the properties.

The court denied Cathy’s Motion to Modify the Dissolution Decree, but it found Tom in contempt for failure to abide by orders of the court as set forth in the decree, for allowing the real estate in his control to fall into disrepair, and for failing to pay real estate taxes and mortgage payments, causing economic hardship to Cathy. It found that his obligations under the decree were “in the nature of support and maintenance.” Thus, it found the obligations were not dischargea-ble in bankruptcy and ordered Tom to compensate Cathy for the losses she sustained. This entañed awarding to Cathy the marital residence previously awarded to Tom, recalculating the worth of the properties involved, ordering a cash payment from Tom, and payment of Cathy’s attorney fees. Tom now appeals.

DISCUSSION AND DECISION

I. Modification of Final Judgment

Tom first contends that the trial court impermissibly amended and modified a final judgment, under the guise of its contempt power, in the 1997 Order. When a trial court enters final judgment, it loses jurisdiction over that judgment. On this matter, the court recently wrote: “A final judgment disposes of the subject matter of litigation as to the parties so far as the court in which the action is pending has the power to dispose of it.” Hubbard v. Hubbard, 690 N.E.2d 1219, 1221 (Ind.Ct.App.1998). The trial court had thirty days or until a party made a motion to correct error within the time provided by the trial rules (30 days) to amend or modify its judgment. Ind. Trial Rules 52(B) and 59(C). Particularly in dissolution, this court has noted, there is a strong policy preference for finality of property division. Dusenberry v. Dusenberry, 625 N.E.2d 458, 461 (Ind.Ct.App.1993).

In the instant case, the trial court denied Cathy’s Motion to Modify the Dissolution Decree, but in its contempt order, it reevaluated and redistributed property. Record at 21, 23, 150, 152-53; 21, 25, 150, 152; 152-53. It entered a new monetary judgment against Tom which exceeded that ordered in the dissolution decree. R. at 24-28. The 1997 order of the trial court comes well outside the time limits of Trial Rules 52(B) and 59(C). Because Cathy did not timely file a motion to correct errors, we find that the trial court impermissibly modified a final judgment in its contempt order.

II. Effect of Bankruptcy Filing

Tom next contends that the 1997 Order was contrary to law because it denied him the protection he was granted under federal bankruptcy law. A person who files for bankruptcy is protected from liability for discharged obligations by the discharge injunction of the Bankruptcy Code, 11 U.S.C. § 524(a)(2), which provides:

(a) a discharge in a case under this title ... (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debt- or....

[1226]*1226There are two methods available to the non-debtor spouse for keeping control over property in a post-dissolution bankruptcy. One is to request relief from stay so as to take control of the property. 11 U.S.C. § 362(a) and (d). The second method involves petitioning the bankruptcy court to make the obligations in the dissolution decree nondis-chargeable. The Bankruptcy Code provides that certain debts are nondischargeable. These include debts:

to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a ... divorce decree ... but not to the extent that ... such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance or support;

11 U.S.C. § 523(a)(5). The Code also includes in nondischargeable debts those:

not of the kind described in paragraph (5) that [are] 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....

11 U.S.C. § 523(a)(15).

Thus, under bankruptcy law, debts in the nature of alimony, maintenance and support are never dischargeable. However, other debts incurred in connection with a divorce are only nondischargeable where the nondebtor spouse files a timely claim in bankruptcy court under 11 U.S.C. § 523(c)(1), which provides that:

the debtor shall be discharged from a debt of a kind specified in paragraph ... (15) [debt incurred in divorce other than one for alimony, maintenance or support], of subsection (a) of this section, unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge ...

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Bluebook (online)
698 N.E.2d 1223, 1998 Ind. App. LEXIS 1353, 1998 WL 547080, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cowart-v-white-indctapp-1998.