Foster v. Burns (In re Foster)

574 B.R. 19
CourtUnited States Bankruptcy Court, D. Maine
DecidedAugust 4, 2017
DocketCase No. 14-20991; Adversary Proceeding Case No. 16-02033
StatusPublished
Cited by2 cases

This text of 574 B.R. 19 (Foster v. Burns (In re Foster)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster v. Burns (In re Foster), 574 B.R. 19 (Me. 2017).

Opinion

MEMORANDUM OF DECISION

Judge Peter G. Cary, United States Bankruptcy Court

Debtor Kenneth M. Foster alleges that his ex-wife, Diane E. Burns (f/k/a Diane Foster), willfully violated 11 U.S.C. § 362(a)1 by seeking to enforce and modify a divorce judgment without first obtaining relief from the automatic stay. An evi-dentiary hearing took place on March 1, 2017, during which Mr. Foster was the sole witness and four exhibits were admitted without objection. At that hearing, counsel for Ms. Burns moved for dismissal, which motion I took under advisement. Mr. Foster and Ms. Bums filed post-trial briefs, and Mr. Foster subsequently submitted a reply brief. Upon review of the papers filed by the parties, and consideration of the evidence and testimony offered at trial, and for the reasons set forth below, judgment will enter against Ms. Burns and in favor of Mr. Foster on the stay violation, and Ms. Burns’s oral motion to dismiss will be denied.

I. Jurisdiction and Venue.

This Court has jurisdiction over the subject matter and the parties pursuant to 28 U.S.C. §§ 157(a) and 1334 and the United States District Court for the District of Maine Local Rule 83.6(a). The parties consented to this Court entering final judgment in this adversary. Venue here is appropriate pursuant to 28 U.S.C. §§ 1408 and 1409.

[22]*22II. Background.

Mr. Foster and Ms. Burns were divorced pursuant to a divorce judgment (the “Divorce Judgment”) entered on July 1. 2014 by the Maine District Court, Portland Division (the “State Court”).2 The Divorce Judgment set aside to Ms. Burns her ownership interest in non-marital real estate located at 50th Street, Unit # 11 Ocean City, Maryland.3 Cáse No. 14-20991, Proof of Claim 5-1, Divorce Judgment at ¶ 2. The Real Property is subject to a mortgage which secures a note in the original principal amount of $276,000 signed by both Mr. Foster and Ms. Bums (the “Note”).4 Id at ¶ 7. With respect to. the Note, the State-Court ordered “that this Note is marital debt and the Note and its remaining balance of $258,129.62 as of May 30, 2014 is set aside to Husband and Wife, equally.” Id In addition, the State Court found that during eleven of the nineteen years Mr. Foster and Ms. Burns were married, Ms. Burns accrued benefits under a vested pension held in her name (the “Pension”). Id. at ¶ 5. The State Court ordered Ms. Burns to transfer to Mr. Foster by qualified domestic relations order half of the Pension benefits accrued by her during that period.

Over five months later, Mr. Foster commenced the underlying chapter 13 case by filing a.voluntary petition for relief and various schedules. On Schedule E, he listed a domestic support obligation to Ms. Burns of $3,164, of which $600 was entitled to priority treatment. On the same day, he filed a proposed chapter 13 plan (Case No. 14-20991, Docket Entry (“D.E.”) 2) (the “Chapter 13 Plan”), listing one domestic support obligation to Ms. Burns in the amount of $600.00. The Chapter 13 Plan further proposed to discharge as a general unsecured claim, “certain non-spousal support debts, stemming from division of marital assets, including an obligation to pay the mortgage on a condominium owner [sic] by her family members.” See Chapter 13 Plan, D.E. 2 at ¶ 10(F).

Ms. Burns filed the Proof of Claim on March 13, 2015, alleging a general, unsecured claim in the amount of $154,838.94 and a $600.00 domestic support obligation entitled to priority treatment. Shortly thereafter, she objected to confirmation of the Chapter 13 Plan on the grounds that, inter alia, it was filed in bad faith. Following an evidentiary hearing on October 27, 2015, a follow-up hearing on November 4, 2015 and briefing by the parties, the Chapter 13 Plan was ultimately confirmed over Ms. Burns’s objection.

Eleven months later, Ms. Burns’s divorce counsel filed three motions in the State Court.5 The first (the “Motion to Enforce”) sought an order enforcing the Divorce Judgment and directing Mr. Foster to pay that portion of the Note allocated to him by the Divorce Judgment. The second (the “Motion for Omitted Proper[23]*23ty”) requested that the State Court reimpose an obligation on Mr. Foster to share the marital debt owed on the Note which the Chapter 13 Plan proposes to, in her view, inequitably discharge.6 Finally, Ms. Burns asked the State Court to modify the Divorce Judgment (the “Motion to Modify”) to accomplish the same result she seeks in the Motion for Omitted Property. Additionally, in light of the effects of Mr. Foster’s confirmed Chapter 13 Plan, she requested that her spousal support be increased and that she no longer be required to pay over to Mr. Foster a portion of her Pension.7

Two days after Ms. Burns filed the Motion to Enforce, the Motion for Omitted Property and the Motion to Modify (collectively, the “State Court Motions”), Mr. Foster commenced this adversary proceeding. In his complaint seeking actual and punitive damages, Mr. Foster alleged that the State Court Motions constituted a willful violation of the automatic stay because they were designed to skirt the protections afforded to Mr. Foster by the Code and the confirmed Chapter 13 Plan. Mr. Foster also took action in the State Court where, through his divorce counsel Mr. J. Kimball Hobbs, Esq., he filed an objection to the State Court Motions asserting that, in addition to certain infirmities under applicable non-bankruptcy law, the motions violated the automatic stay. Exh. 3-2.

On or about November 7, 2016, Ms. Burns withdrew the Motion to Enforce [24]*24and filed an Amended Motion to Modify Divorce Judgment Dated July 1, 2014 Regarding Spousal Support and Property (the “Amended Motion to Modify”), which is substantively similar to the original Motion to Modify. Exh. 3-2 and 3-3. The prayer for relief in the Amended Motion to Modify seeks to modify the spousal support and deny Mr. Foster any share in Ms. Burns’s Pension. Exh. 3-3. As was the case in the original Motion to Modify, the relief sought in the Amended Motion to Modify is premised on the argument that the modifications are necessary to address “any resulting burden shift in paying marital debt” arising from the proceedings Id.

At trial, Mr. Foster testified that “several motions” had been dismissed but that the Amended Motion to Modify, or some variation thereof, was in the discovery phase. He further testified that Ms. Burns is seeking to extend his alimony obligations to 20 years at $1,000 per month and that this proposed modification, if adopted by the State Court, would result in a spousal support award equal to the Note obligations apportioned to Mr. Foster in the Divorce Judgment.8

Both after Mr. Foster submitted his case and again at the conclusion of the hearing, counsel for Ms.

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574 B.R. 19, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-burns-in-re-foster-meb-2017.