Grasmann v. Grasmann (In Re Grasmann)

156 B.R. 903, 28 Collier Bankr. Cas. 2d 105, 1992 Bankr. LEXIS 1937, 1992 WL 367472
CourtUnited States Bankruptcy Court, E.D. New York
DecidedAugust 10, 1992
Docket8-19-70729
StatusPublished
Cited by8 cases

This text of 156 B.R. 903 (Grasmann v. Grasmann (In Re Grasmann)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grasmann v. Grasmann (In Re Grasmann), 156 B.R. 903, 28 Collier Bankr. Cas. 2d 105, 1992 Bankr. LEXIS 1937, 1992 WL 367472 (N.Y. 1992).

Opinion

OPINION

CECELIA H. GOETZ, Bankruptcy Judge:

Patricia Grasmann, the former wife of the Debtor, filed an adversary proceeding against Edwin J. Grasmann, the Debtor and Defendant, contesting the discharge-ability under 11 U.S.C. § 523(a)(5) of the debt owed her and is seeking the following relief:

(a) Summary judgment in the adversary proceeding in her favor pursuant to Federal R. Bankr.P. 7056;

*905 (b) That this Court abstain from considering the Chapter 7 proceeding pursuant to 11 U.S.C. § 305(a); or, in the alternative,

(c) That this Court dismiss the Debtor’s petition pursuant to Federal R.Bankr.P. 1017 for bad faith.

Factual Background

On April 19, 1991 the Plaintiff was awarded a final judgment of divorce in which the Defendant was directed to pay her the sum of $157,500 1 over a seven year period as her distributive share of the increase in the value of his earning potential during the marriage. Claiming that this amount was intended to be in the nature of alimony, support or maintenance, she is now moving for summary judgment in her adversary proceeding contesting the dis-chargeability of the debt listed in the Debt- or’s schedules.

The Debtor-Defendant opposes all the relief requested and contends that several material facts remain to be tried precluding summary judgment.

Edwin J. Grasmann, the Debtor, was divorced from Patricia Grasmann in New York State Supreme Court, County of Suffolk, on April 19, 1991. Justice Donald Kitson presided over the action. On February 28, 1991, at the conclusion of the divorce trial, Justice Kitson rendered a lengthy decision from the bench (“Decision”), incorporating Findings of Fact. Subsequently, he issued a Judgment of Divorce and Money Judgment (“Judgment”) which reflected his Decision.

Justice Kitson’s Decision set forth the following facts:

On July 23, 1982 Edwin J. Grasmann married Patricia Grasmann who had a son, born September 10, 1976, by an earlier marriage. In February, 1985 the Defendant adopted her son. On March 27, 1988 the plaintiff and defendant had a child together.

At the time of their marriage, Edwin J. Grasmann was about to commence his second year of medical school at the New York School for Osteopathic Medicine. During the next seven years of marriage he completed medical school, received a medical license, completed an internship and his residency at Stony Brook University Hospital. In July, 1988 the defendant commenced full-time employment at the offices of Dr. Alfred Ekstrom.

Prior to and throughout the marriage, Patricia Grasmann was employed as a respiration therapist at St. Charles Hospital in Port Jefferson, New York. She has an Associate Degree from Nassau Community College in Therapy received in or about 1972. Her income supported the family and enabled her husband to pursue and complete his medical studies. For the first three years of the marriage she was the sole wage earner in the family. In 1988, Patricia Grasmann earned $35,000. Prior to 1988, she earned between $20,000 and $25,000. In 1989, after she gave up full-time employment, it dropped to $7,715.

Dr. Grasmann had no income until 1985 when he graduated from medical school and earned $11,734. The following year his income went up to $28,242; in 1987 as a resident he earned $31,259. The following year, in 1988, his total income was $65,193 and it nearly doubled in 1989 to $121,429. That year he left the marital residence. Dr. Grasmann’s potential income at the time of the divorce trial was between $200,-000 and $250,000 annually.

The parties to the divorce stipulated that the value of Dr. Grasmann’s enhanced earning power due to his medical degree was $450,000 in 1989.

Patricia Grasmann has a history of medical problems but she put in no evidence during the divorce proceeding that she is incapable of working full-time. If she works full-time she earns from $25,000 to $35,000 per year. She intends to work full- *906 time when her youngest child reaches school age, provided her health improves. Her potential earning power nowhere approximates what her husband can earn.

In November, 1986 the Debtor and his wife bought a house for $102,000, in which there was an approximate equity of $30,000 at the time of the divorce. The Court directed that the house be sold and the proceeds divided giving the wife, however, the option of buying out her husband for $15,000 through an offset against her first year’s distributive award.

In light of the contribution, both economic and noneconomic, which Patricia Gras-mann made to the enhancement of the earnings of her husband during the marriage, Justice Kitson awarded her 35 percent of such enhanced earning capacity. Since the parties had stipulated that such enhanced capacity had a value of $450,000, she was entitled to $157,500, to be paid with 5V2 percent interest over seven years, beginning July 1, 1991. Dr. Grasmann was given the option of paying off the full amount earlier.

Judge Kitson’s opinion is divided into several sections. Various sections are headed “Maintenance,” “Custody,” “Visitation” and “Child Support.” Mrs. Gras-mann was awarded $50 per week for two years for maintenance “[b]ased primarily on the tender age of the infant issue and testimony of plaintiffs weakened medical conditions.” She was given custody of the two sons and Dr. Grasmann was directed to pay $240 per week per child, or $25,000 per year until their demise or emancipation.

Counsel fees of $15,000 were awarded the wife’s attorney to be paid directly to the attorney. The Court said that in deciding the issue who should pay the legal fees it was required to take into consideration the respective financial circumstances of the parties. In making this award, the Court said:

At the time of the commencement of this action, on or about May, 1990 plaintiff’s employment was sporadic. Even when employed full-time plaintiff’s earning potential is in the range of $25,000 to $35,-000. In addition, plaintiff takes care of the parties two children. Plaintiff has used up her own savings and in addition has borrowed from members of her own family. The defendant, in contrast to plaintiff, earned $122,241 gross income in his 1989 federal tax returns and continues to practice medicine. The testimony at the trial indicated that in addition to defendant’s present salary he is reimbursed or has paid for him directly, personal and business expenses including the cost of his health insurance, medical practice insurance, gasoline, car telephone, magazines, professional memberships and associations, hospital fees and other expenses.

Decision, p. 21.

At the time of the trial, Dr. Grasmann was 34, his wife was 38.

Three months after the final judgment of divorce was signed, Dr. Grasmann filed a voluntary petition with this Court under Chapter 7 of the United States Bankruptcy Code and a trustee was duly appointed to administer the estate in bankruptcy.

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Bluebook (online)
156 B.R. 903, 28 Collier Bankr. Cas. 2d 105, 1992 Bankr. LEXIS 1937, 1992 WL 367472, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grasmann-v-grasmann-in-re-grasmann-nyeb-1992.