In re Cascone

572 B.R. 379, 2017 Bankr. LEXIS 1547
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedMay 18, 2017
DocketCase No. 3:16-bk-3431-PMG
StatusPublished

This text of 572 B.R. 379 (In re Cascone) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Cascone, 572 B.R. 379, 2017 Bankr. LEXIS 1547 (Fla. 2017).

Opinion

ORDER ON DEBTOR’S MOTION FOR PRELIMINARY INJUNCTIVE RELIEF, AND BARBARA ANZILOT-TI’S MOTION FOR SUMMARY JUDGMENT ON DEBTOR’S MOTION

PAUL M. GLENN, United States Bankruptcy Judge

THIS CASE came before the Court for an evidentiary hearing to consider the Debtor’s Motion for Preliminary Injunctive Relief (Doc. 51), and Barbara Anzilotti's Motion for Summary Judgment on the Debtor’s Motion for Preliminary Injunctive Relief (Doc. 77).

After the Debtor filed his bankruptcy case, a State Court in Georgia entered an Income Deduction Order (IDO) to enforce a child support obligation owed by the Debtor. In the current Motion, the Debtor asks the Court to prohibit the deduction of money from his salary under the IDO.

Section 362(b)(2)(C) of the Bankruptcy Code permits the court-ordered withholding of a Chapter 11 debtor’s income for the payment of a domestic support obligation. Additionally, the Order that established the Debtor’s child support arrearage in this case is not void as a violation of the automatic stay, because the collection action was excepted from the. stay under § 362(b)(2)(B). Accordingly, the deduction from the Debtor’s income under the IDO should not be prohibited, and the Debtor’s Motion for Preliminary Injunctive Relief should be denied.

Background

The Debtor, John Joseph Cascone, is a surgeon at Florida Hospital, and had gross taxable income in 2016 in the approximate amount of $536,112.00. (Docs. 9, 49).

On March 20, 2006, the State Court in Georgia entered a Final Consent Order which (1) determined that the Debtor is the father of Barbara Anzilotti’s three children, and (2) ordered the Debtor to pay child support to Anzilotti commencing on April 1, 2006. Beginning on April 1, 2008, the amount of the child support was $4,000.00 per month. (Debtor’s Exhibit 1).

On June 6, 2016, Anzilotti filed a Motion for Contempt against the Debtor in the Georgia State Court. (Debtor’s Exhibit 2).

On September 9, 2016, the Debtor filed a petition under Chapter 7 of the Bankruptcy Code.

On September 21, 2016, the Georgia State Court entered an Order on Anzilot-ti’s Motion for Contempt. (Debtor’s Exhibit 4). Paragraph 2 of the Order states:

The parties’ Final Consent Order provided that the respondent (Father) was to pay “$4,000.00 per month, or $1,333.00 per child.” The Father now [381]*381argues that when the parties’ oldest child “aged out” of child support, his support obligation automatically reduced by $1,333.00. This is not the case—the law does not allow the Father to modify the Court’s award in such a fashion. Such a modification would require him to come to court with a modification petition and provide evidence that the new amount is warranted by the child support guidelines. (Citations omitted). Thus, the Father’s child support obligation continued at $4,000.00 monthly even when the oldest child “aged out” and continues at that rate to the present. The Court finds the Father to be in arrears in the amount of $42,300.00. Due to the misleading language in the Decree, the Court DECLINES to hold him in willful contempt.

(Debtor’s Exhibit 4)(Emphasis supplied).

On October 31, 2016, Anzilotti filed a Motion for Income Deduction Order in the Georgia State Court. (Exhibit to Doc. 77).

On November 21, 2016, the Georgia State Court entered an Income Deduction Order for Respondent to Pay. (Exhibit to Doc. 77). The IDO directed the Debtor’s employer to deduct the sum of $7,000.00 per month from the salary due to the Debtor. The IDO further provided that the deduction consisted of $4,000.00 per month in “current support,” and the sum of $3,000.00 per month to pay the “past due support” in the amount of $42,300.00 as determined by the September 21 Order.

The Debtor subsequently filed a Motion to Convert his bankruptcy case, and the Chapter 7 case was converted to a case under Chapter 11 of the Bankruptcy Code on January 10, 2017. (Docs. 41, 43, 46).

On January 26, 2017, the Debtor filed a Motion for Preliminary Injunctive Relief in the converted case. (Doc. 51). In the Motion, the Debtor asserts that Anzilotti violated the automatic stay by prosecuting the contempt motion in September of 2016, and also by seeking the IDO in October and November of 2016. Consequently, the Debtor asks the Court to order Anzilotti “to immediately cease garnishment of Debtor’s wages, and release all property of the bankruptcy estate.”

Discussion

Section 362(b)(2)(C) of the Bankruptcy Code permits the court-ordered withholding of a Chapter 11 debtor’s income for the payment of a domestic support obligation. Additionally, the order that established the Debtor’s child support arrearage in this case is not void as a violation of the automatic stay, because the collection action was excepted from the stay under § 362(b)(2)(B) of the Bankruptcy Code. Accordingly, the deduction from the Debt- or’s income under the IDO should not be prohibited at this time.

The term “domestic support obligation” is defined in § 101(14A) of the Bankruptcy Code to include a debt that accrues before, on, or after the bankruptcy petition date, and that is (1) owed to a child of the debtor or the child’s parent, (2) in the nature of support, (3) established before, on, or after the petition date by a court order, and (4) not assigned to a nongovernmental entity. 11 U.S.C. § 101(14A). The section was intended to strengthen the rights of a spouse or child of the debtor by defining a “domestic support obligation” as a debt that is “established or subject to establishment before, on, or after” the filing of a bankruptcy petition. In re Peterson, 410 B.R. 133, 135 (Bankr. D. Conn. 2009).

This case involves a domestic support obligation within the meaning of § 101(14A). The debt was originally established pursuant to the Final Consent Order dated March 20, 2006, which determined the support owed by the Debtor as [382]*382the father of Anzilotti’s three children. (Debtor’s Exhibit 1).

A. Section 362(b)(2)(C)

Generally, § 362(b)(2)(C) of the Bankruptcy Code permits the court-ordered withholding of a debtor’s post-petition income for the payment of a domestic support obligation. Section 362(b)(2)(C) provides:

11USC § 362. Automatic stpy

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(b) The filing of a petition under section 301, 302, or 303 of this title, ... does not operate as a stay—
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(2) under subsection (a)—
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(C) with respect to the withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation under a judicial or administrative order or a statute.

11 U.S.C. § 362(b)(2)(C)(Emphasis supplied). By enacting § 362(b)(2)(C), “Congress sought to enable a DSO creditor to reach assets of the estate post-petition without having to seek relief from the stay.” In re Gonzalez, 832 F.3d 1251, 1255 (11th Cir.

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Cite This Page — Counsel Stack

Bluebook (online)
572 B.R. 379, 2017 Bankr. LEXIS 1547, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-cascone-flmb-2017.