Davich v. Minnesota Ex Rel. Davich (In Re Davich)

27 B.R. 888, 1983 Bankr. LEXIS 6708, 10 Bankr. Ct. Dec. (CRR) 440
CourtUnited States Bankruptcy Court, D. South Dakota
DecidedMarch 2, 1983
Docket19-40054
StatusPublished
Cited by8 cases

This text of 27 B.R. 888 (Davich v. Minnesota Ex Rel. Davich (In Re Davich)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davich v. Minnesota Ex Rel. Davich (In Re Davich), 27 B.R. 888, 1983 Bankr. LEXIS 6708, 10 Bankr. Ct. Dec. (CRR) 440 (S.D. 1983).

Opinion

MEMORANDUM DECISION

PEDER K. ECKER, Bankruptcy Judge.

Debtor Thomas Davich’s Complaint to Determine Dischargeability of Debt brought this matter before the Court. Debtor Adey Victoria Davich is not indebted to the defendants and is not a party to these proceedings.

On November 18,1981, the Court entered a default judgment on Count I of the debt- or’s Complaint against Defendant Charmaine A. Davich Ness and Defendant State of Minnesota, as assignee of Charmaine Da-vich Ness, finding that neither party had answered nor appeared at the hearing and that $17,326.00 in accrued child support assigned by Defendant Ness to Defendant State of Minnesota was a dischargeable debt not within the exception provided under 11 U.S.C. § 523(a)(5).

The Court, having considered the briefs submitted by the parties and the pleadings and affidavits on file and having heard the testimony of the witness and arguments of the parties at trial, makes the following decision:

On December 28,1971, Patricia Gayle Da-vich (the “defendant”) was granted a default divorce from her husband, Thomas Davich (the “debtor”), by the District Court for St. Louis County, Minnesota, pursuant to a stipulation of the parties.

The divorce decree contains a provision which requires the debtor to pay the defendant $25.00 per month in child support each for Sherri Lin Davich, Kelli Susan Davich, and Timothy Scott-Allan Davich.

On March 12, 1976, the defendant assigned to the State of Minnesota all rights to child support payments that had accrued at that date in addition to any current support payments payable while the defendant received AFDC payments.

The defendant received her last AFDC payment in October, 1976.

On April 10, 1978, Mary K. Payson, the defendant’s sister and relative caretaker of Sherri Lin Davich, executed an AFDC assignment of support to the State of Minnesota on behalf of Sherri Lin Davich.

There is no assignment of the right to receive $25.00 child support per month each for children Kelli Susan Davich or Timothy Scott-Allan Davich since November 1, 1976.

The debtor filed a voluntary petition in bankruptcy on July 13, 1981, which was prior to the effective date of the amendment to 11 U.S.C. § 523(a)(5). The effective date of the amendment to 11 U.S.C. § 523(a)(5) was-August 13, 1981. 1

The child support accruing from the debt- or for Kelli and Timothy Davich for the period of November, 1976, to July, 1981, is $2,800.00. 2

At the time the debtor filed the bankruptcy petition, there was a pending action against the debtor to collect child support brought on by the State of Minnesota, as *890 assignee of the defendant, in Fall River County, South Dakota.

The debtor filed a Complaint to Determine Dischargeability of Debt alleging in Count II that the defendant had assigned the right to receive accrued child support to the State of Minnesota and the debt was, therefore, dischargeable.

A hearing on the debtor’s complaint was held before this Court with the defendant, State of Minnesota, as assignee of the defendant, not filing an answer to the debt- or’s complaint nor appearing before this Court.

At the time the debtor filed this complaint to determine dischargeability of debt, this Court had jurisdiction under 28 U.S.C. § 1471(b). The defendant urges the Court to abstain from the case in the interest of justice because she cannot properly defend her rights in South Dakota when she lives in Minnesota. The defendant further argues that since the issues of child support were originally decided by a Minnesota state court, that is the forum to decide the issues raised here. This Court cannot agree.

A bankruptcy court has concurrent but not exclusive jurisdiction to determine the dischargeable character of a debt. 28 U.S.C. § 1471(b); Bankruptcy Rule 409(a)(1). The court has the right to abstain from a particular proceeding in a case in the interest of justice. 28 U.S.C. § 1471(d). However, in the instant proceedings, the question of dischargeability of child support debt is before the Court with both parties given full opportunity to be heard. The defendant submitted an affidavit in support of her answer to the debtor’s complaint. The Court has taken judicial notice of that affidavit and the exhibits attached thereto, as well as her subsequent affidavit. There is no controversy before the Court on the facts which support a decision on dischargeability of debt under the Bankruptcy Code. Therefore, this Court is of the opinion that justice would not be served by requiring the parties to relitigate an issue of child support in state court when the issue of dischargeability of the debt is squarely before this Court at this time.

The first of two issues before the Court for determination is whether an assignment to the State of the right to receive child support from the debtor renders that debt dischargeable when a divorce decree requires the debtor make child support payments to the former spouse but it was the former spouse’s sister who executed the assignment in her capacity as relative caretaker of the debtor’s child.

The law in effect at the time the debtor filed his bankruptcy petition on July 13, 1981, discharged debts for child support that had been assigned to a third person or entity. 11 U.S.C. § 523(a)(5) (1976 ed. Supp. III). Congress was clear in its intent that § 523(a)(5) was enacted to protect the rights of a former spouse and child but not the governmental entity such as a welfare agency to whom the debt is assigned. Hearing on H.R. 31 and H.R. 32 Before the Subcomm. on Civil and Constitutional Rights of the House Comm, on the Judiciary, 94th Cong., 1st & 2d Sess. 942 (1975-76) (statement of Ernest L. Sarason, Jr.). The courts have consistently adhered to this Congressional intent. In re French, 9 B.R. 464, 467 n. 6 (Bkrtcy.S.D.Cal.1981); In re Wells, 8 B.R. 189, 192-93 (Bkrtcy.N.D.Ill.1981); In re Knabe, 8 B.R. 53, 55 (Bkrtcy.S.D.Ind.1980). The applicable part of § 523(a)(5)(A) provides that the debt for child support is dischargeable when “such debt is assigned to another entity, voluntarily, by operation of law, or otherwise.” The wording of the statute clearly indicates that the intent behind the nonassignment provision is that the section apply to more than just technical assignments. Congress did not insert the words, “or otherwise,” as mere surplusage. These words are intended to open or broaden the scope of the meaning of the assigning of a debt beyond the narrow interpretation of technical assignments.

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27 B.R. 888, 1983 Bankr. LEXIS 6708, 10 Bankr. Ct. Dec. (CRR) 440, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davich-v-minnesota-ex-rel-davich-in-re-davich-sdb-1983.