Egleston v. Egleston

448 F.3d 803, 2006 WL 1223044
Court of Appeals for the Fifth Circuit·Decided May 5, 2006·No. 04-31113·Published·Cited by 31 cases

Opinion

*805 GARWOOD, Circuit Judge:

Vicki Marie Egleston appeals the summary judgment in her adversary proceeding to except from discharge various Pennsylvania state court judgments rendered against her ex-husband, a Chapter 7 debt- or, Leon Alan Egleston. We affirm in part, reverse in part, and remand.

Facts and Proceedings Below

The ceaseless litigation following the 1993 divorce of Vicki Marie Egleston (Vicki) and Leon Alan Egleston (Alan) has once again reached this court. On September 14, 1993, the Court of Common Pleas of Westmoreland County, Pennsylvania (state court) entered a consent order to enforce a marital settlement agreement (settlement order) between the Eglestons. The settlement order provided, inter alia, for the payment of alimony and the distribution of property. 1

Six months after the settlement order, on March 14, 1994, Alan filed a Chapter 7 bankruptcy petition in the Western District of Louisiana. In response, Vicki moved to lift the automatic stay as to her claims for alimony and she filed an adversary proceeding under 11 U.S.C. § 523(a)(5) to contest the discharge of certain obligations under the settlement order. On July 18, 1994 the automatic stay was lifted only for Vicki’s claims for the alimony payments described in paragraph nine of the settlement order. On September 27, 1994, Vicki obtained a state court order that adjudged Alan in contempt for failure to comply with the settlement order and directed him to pay $51,400 in alimony arrearages and $3,000 in attorneys’ fees.

*806 Meanwhile, in her adversary proceeding in the bankruptcy court, Vicki argued that the payments provided for in paragraph eight of the settlement order should also be excepted from Alan’s discharge. The eventual result of that proceeding — after an appeal that provided the first opportunity for this court to address the Egleston dispute, see Egleston v. Egleston, No. 95-30641 (5th Cir. Feb.5, 1996) (unpublished) — was the bankruptcy court’s judgment on April 16, 1996, that 136 monthly payments of $4,000 were excepted from Alan’s discharge as alimony under section 523(a)(5). These payments included all 131 of the payments provided for in paragraph nine of the settlement order, see supra (note 1), and an additional five payments considered to be alimony under the provisions of paragraph eight. 2 The balance of payments under paragraph eight did not constitute alimony, and therefore Vicki’s claim to that amount was discharged.

Alan did not always timely pay his non-discharged monthly alimony obligations of $4,000, and Vicki subsequently relied on Pennsylvania state court contempt proceedings to force payment. 3 A review of the docket entries for the Egleston divorce case reveals various state court efforts to ensure that Alan met his alimony obli *807 gations, including orders, wage attachments, and even imprisonment for contempt. Alan generally found himself on the losing side of the state court’s judgments. Specifically, on January 16, 1998, the state court again adjudged Alan in contempt of court and noted that Vicki “lost the marital home through mortgage foreclosure” due to Alan’s failure to pay alimony “for a considerable period of time.” The court was unable to determine Vicki’s damages at that time and so it granted leave for the parties to present additional testimony of losses or credits. The court also noted that Alan had failed to pay to Vicki the sum of $77,900 for the sale of his medical practice pursuant to paragraph eight of the settlement order. 4 The state court was apparently not informed that the only obligation under paragraph eight that was not discharged by Alan’s bankruptcy was the sum of $20,000 in the form of five additional monthly alimony payments of $4,000. As a result, the state court ordered Alan to pay $77,900 with interest from January 1,1994. Then on June 18, 1998, following a hearing that Alan did not attend and at which he presented no evidence, 5 the state court again adjudged Alan in contempt of court and ordered Alan, inter alia, to pay to Vicki the following sums: (a) $42,275 in attorneys’ fees that Vicki incurred in attempts to enforce the settlement order, (b) $65,000 for Vicki’s lost equity in real property, (c) $20,000 for Vicki’s lost equity in her automobile that was repossessed, (d) $10,000 for the value of Vicki’s lost personal property (some apparently taken by Alan and some sold by Vicki when Alan’s alimony payments were not made), and (e) $6,000 for Vicki’s costs associated with traveling to Louisiana to defend the property settlement agreement in Alan’s bankruptcy. Although the litigation has continued to the present day, resulting in many additional orders from the state court, 6 the current dispute primarily involves the bankruptcy court’s treatment of the above-described amounts first awarded by the state court in January and June of 1998.

On October 12, 2001, at Alan’s request, the bankruptcy court reopened Alan’s 1994 bankruptcy, and, on November 28, 2001, Alan filed an adversary proceeding alleging that Vicki violated the injunction of 11 U.S.C. § 524(a)(2) by bringing state court proceedings to collect Alan’s discharged debts. Alan asked the bankruptcy court to (1) void portions of the state court judgments, (2) enjoin Vicki from future attempts to collect the now-discharged obligations of the settlement agreement, (3) find Vicki in contempt of court, and (4) award damages and attorneys’ fees. On June 4, 2002, Alan and his current wife, Sharon, filed a new bankruptcy petition, which was consolidated with Alan’s 1994 bankruptcy. On September 6, 2002, Vicki filed an adversary proceeding in the new case, claiming that the state court judgments against Alan are not dischargeable. Alan’s adversary proceeding of November 28, 2001 and Vicki’s adversary proceeding of September 6, 2002 were consolidated and Alan moved for summary judgment on December 12, 2003.

*808 Meanwhile, on September 17, 2003, the state court issued an order that finally-acknowledged the 1994 bankruptcy and its effect on the earlier state court judgments. 7 This order (1) set Alan’s alimony arrearage at $96,405.15; (2) concluded that the January 16, 1998 state court order to Alan to pay Vicki the sum of $77,900 was related to the settlement agreement’s equitable distribution provisions that had been discharged in bankruptcy; (3) recognized that the judgment for interest accrued on the discharged equitable distribution obligation was similarly defective; and (4) noted that the bankruptcy court would have to determine the validity of the other components of the state court judgment of June 18,1998.

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Egleston v. Egleston, 448 F.3d 803, 2006 WL 1223044 (5th Cir. 2006).

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