Fierman v. Lazarus

361 F. Supp. 477, 1973 U.S. Dist. LEXIS 12481
CourtDistrict Court, E.D. Pennsylvania
DecidedJuly 31, 1973
DocketCiv. A. 68-2682
StatusPublished
Cited by10 cases

This text of 361 F. Supp. 477 (Fierman v. Lazarus) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fierman v. Lazarus, 361 F. Supp. 477, 1973 U.S. Dist. LEXIS 12481 (E.D. Pa. 1973).

Opinion

MEMORANDUM AND ORDER

CLIFFORD SCOTT GREEN, District Judge.

Plaintiff, Nettie Fierman, a citizen of the State of New York, instituted the present action upon a judgment rendered by the Supreme Court of the State of New York, County of Bronx. Defendants, Lawrence S. Lazarus and Fannie P. Lazarus, are the son-in-law and daughter of plaintiff, and are citizens of the Commonwealth of Pennsylvania. This court has jurisdiction based on diversity of citizenship. 28 U.S.C. § 1332(a)(1).

The record discloses the following facts:

On May 1, 1961, plaintiff brought an action against defendants in the Supreme Court of New York, County- of Bronx, Index 6557-67. In the complaint filed in the New York action, plaintiff claimed that defendants owed her approximately $40,000; said sum, it was claimed, was taken from plaintiff by defendants’ fraud, misrepresentation, threats, breach of trust, breach of duty, and infliction of bodily harm. Defendant Lawrence S. Lazarus generally denied the allegations of the complaint while defendant Fannie P. Lazarus denied mistreating plaintiff, but admitted to receiving $27,100.00 from plaintiff for the purpose of purchasing a home. The Supreme Court of New York considered all of the pleadings, affidavits and motions in the case before it, and thereupon granted a motion for summary judgment to plaintiff against both defendants for $27,100.00. On August 1, 1967, summary judgment in the amount of $27,100.00 was entered as final judgment for $35,642.73, including interest and costs to August 1, 1967. Defendants have never appealed from the judgment rendered by the New York court. On September 6, 1967, defendants Fannie P. Lazarus and Lawrence S. Lazarus filed Voluntary Petitions in Bankruptcy in the United States District Court for the Eastern District of New York, being Numbers 67B10032 and 67B10033, respectively. Among creditors scheduled by defendants in the bankruptcy proceeding was the plaintiff in the amount of $19,603.36 as a contingent debt, and for $35,642.73 as a liquidated debt. Defendants were adjudicated bankrupt by the Referee. Plaintiff filed a proof of claim in the bankruptcy proceeding alleging that the bankrupts obtained monies from her by fraudulent representations. Defendants were discharged in bankruptcy; plaintiff made no objection to such discharge.

Plaintiff now brings this action on the judgment obtained by her against defendants in the Supreme Court of New York. Defendants claim that plaintiff’s New York judgment was discharged by the adjudication in the Bankruptcy Court for the Eastern District of New York and that their prior discharge in bankruptcy affords a valid defense to this action on the judgment. On the other hand, to escape the effect of defendants’ discharge in bankruptcy, plaintiff maintains her New York judgment was based on defendants’ fraud and false pretenses and that such debts *479 are not dischargeable. At this juncture, we note that recent amendments to §§ 2a (12), 14, 17, 38 and 58 of the Bankruptcy Act confer upon the bankruptcy court general jurisdiction to determine a bankrupt’s right to a discharge as well as the effect of a discharge when granted. These amendments, however, apply to bankruptcy proceedings instituted after December 18, 1970, and are therefore not applicable to the instant case. See Pub.L.No. 91-467, 91st Cong., 2d Sess. (1970). The issues involved herein relative to dischargeability of a bankrupt’s debts will be decided and disposed of pursuant to the law as it existed prior to the effective date of the aforesaid amendments. Briefly stated, the former provisions of the Bankruptcy Act relating to discharge, empowered the Bankruptcy Court to determine the right to a discharge but did not generally give it jurisdiction to determine which debts were in fact discharged. The effect of the discharge when obtained was ordinarily determined whenever and wherever the enforcement of a debt was attempted against the bankrupt. Watts v. Ellithorpe, 135 F.2d 1 (1st Cir. 1943); Re Mirkus, 289 F.Supp. 732 (2nd Cir. 1923); In Matter of Lowe, 36 F.Supp. 772 (W.D.Ky.1941).

Contrary to defendants’ assertions, plaintiff’s filing of a proof of claim in the Bankruptcy Court did not preclude plaintiff from suing on the New York judgment if her claim was, in fact, non-dischargeable as set forth in § 17 of the Bankruptcy Act. Berkner v. Rubin, 145 Misc. 666, 260 N.Y.S. 747 (1932); Elston v. Rusch, 250 Mich. 221, 229 N.W. 503 (1930). Moreover, even though plaintiff did not oppose granting of defendants’ discharge, she could nevertheless be entitled to the benefit of Section 17 of Bankruptcy Act. Friend v. Talcott, 228 U.S. 27, 33 S.Ct. 505, 57 L.Ed. 718 (1913); Wasylkiw v. Jendrowski, 52 N.J.Super. 243, 145 A.2d 351 (1958); Multiple Trading Corp. v. Saggese, 178 Misc. 1077, 37 N.Y.S.2d 296 (1942); In Re Anthony, 42 F.Supp. 312 (E.D.Ill.1941); In Re Weitzman, 11 F.2d 897 (N.D.Tex.1923).

The principal question before this Court is whether the judgment obtained by plaintiff against defendants in the Supreme Court of New York is dis-chargeable in bankruptcy. As authority for her position that the judgment was not dischargeable, plaintiff relies principally on Section 17(a)(2) and (4) of the Bankruptcy Act, 11 U.S.C. § 35(a)(2) and (4) w,hich provided in relevant part;

“A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except such as . (2) are liabilities for obtaining money or property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another . . . or (4) were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity. . . .” (Emphasis added).

We note here that although the 1970 amendments to the Bankruptcy Act included some revision of the listing of non-dischargeable debts enumerated in § 17a, 11 U.S.C. § 35(a)(2-6), there has been no change in the substance of the non-dischargeable debts.

In order to determine whether the liability of defendants as judgment debtors, was excepted by 11 U.S.C. § 35(a) from release which would be otherwise effected by their discharge in bankruptcy, the nature and character of liability on which the New York judgment was founded must first be determined. Maier v. Maier, 77 Misc. 145, 135 N.Y.S. 1038 (1912). A claim which is not dischargeable under the provisions of the Bankruptcy Act is not made dis-chargeable by the recovery of a judgment thereon. See, In Re Lewensohn, 99 F. 73 (S.D.N.Y.1900), aff’d 104 F. 1006 (2nd Cir. 1900). The judgment of the New York Supreme Court must be accepted as valid. We need not redeter *480

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Bluebook (online)
361 F. Supp. 477, 1973 U.S. Dist. LEXIS 12481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fierman-v-lazarus-paed-1973.