In Re Fluke

305 B.R. 635, 51 Collier Bankr. Cas. 2d 1042, 2004 Bankr. LEXIS 115, 2004 WL 257249
CourtUnited States Bankruptcy Court, D. Delaware
DecidedFebruary 10, 2004
Docket19-10222
StatusPublished
Cited by7 cases

This text of 305 B.R. 635 (In Re Fluke) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Fluke, 305 B.R. 635, 51 Collier Bankr. Cas. 2d 1042, 2004 Bankr. LEXIS 115, 2004 WL 257249 (Del. 2004).

Opinion

MEMORANDUM OPINION

PETER J. WALSH, Bankruptcy Judge.

This opinion is with respect to Debtor’s motion to reopen (Doc. 14). 1 Debtor has requested that the Court: (1) reopen her Chapter 7 case; (2) find her ex-husband in contempt of both the Court’s June 16, 2000 order discharging Debtor and the 11 U.S.C. § 524 discharge injunction; 2 and (3) sanction the ex-husband or his attorney for their conduct in obtaining a modification, in the Court of Common Pleas for Adams County, Pennsylvania, of a divorce property settlement. For the reasons set forth below, I find that the ex-husband’s post-discharge conduct in obtaining a modification of the divorce property settlement agreement violated the discharge injunction.

BACKGROUND

Terry L. Fluke and Charles K. Fluke, Jr. were divorced on February 17, 2000. The decree, entered in the Court of Common Pleas for Adams County, Pennsylvania (the “Divorce Court”), incorporated a Marriage Settlement Agreement (“MSA”). The MSA sought to equitably distribute the marital estate, including accumulated joint debt and Mr. Fluke’s United States Coast Guard retirement benefits (“Retirement Benefits”). Pursuant to the MSA, Mr. Fluke agreed to assume sole responsi *637 bility for certain debts and Debtor assumed responsibility for $9,415.15 in credit card and installment debt. Also, the MSA provides that Debtor is to receive thirty percent (30%) of the Retirement Benefits, if and when received by Mr. Fluke.

Debtor filed a voluntary petition under chapter 7 of the Bankruptcy Code on March 8, 2000. On June 9, 2000, Mr. Fluke instituted an adversary proceeding challenging the dischargeability of the Debt. The Court conducted an evidentiary hearing on March 13, 2001, to determine whether that obligation was dischargeable under § 523(a)(15). 3 By an April 19, 2001 Judgment Order, the Court determined that Debtor satisfied both subparts of § 523(a)(15) so that the $9,415.15 debt was discharged. See Adv. Doc. 13. The debt thus remained the obligation of Mr. Fluke.

On November 26, 2001, Mr. Fluke, through his divorce attorney, filed a Petition for Special Relief in the Divorce Court. The petition alleged that because of Debtor’s “bad faith in discharging her assumed debts to bankruptcy” she should be disqualified from receiving the 30% of the Retirement Benefits. See Doc. 15, Ex. A, ¶ 10. The Divorce Court held a hearing on December 31, 2001 and issued an opinion and order on March 15, 2002 (the “March 15th Order”). The Divorce Court did not grant the relief requested by Mr. Fluke and did not address the allegation of bad faith. Instead, the Divorce Court found as follows:

In order to give plaintiff the benefits that were bargained for, the Court will direct that the defendant be responsible for the following: (a) Discover card: $2,830.00 and (b) MBNA (mitigated): $6,585.15 for a total of $9,415.15.

See Doc. 15, Ex. C.

The Divorce Court directed Debtor to pay the $9,415.15 to Mr. Fluke in thirty-six monthly installments of $261.53, starting May 1, 2002. See Doc. 15, Ex. C.

Debtor failed to pay the required May and June 2002 monthly payments. As a result, Mr. Fluke returned to the Divorce Court and filed a Petition for Sanctions. Thereafter, Debtor petitioned this Court to reopen her bankruptcy case. Debtor alleges that both Mr. Fluke’s initial Petition for Special Relief and his follow-up Petition for Sanctions violated the discharge injunction of § 524(a)(2). See Doc. 14 at ¶ 6. In response, Mr. Fluke argues that no violations occurred because: (1) the Divorce Court properly determined that Pennsylvania case law permitted modification of the MSA; and (2) the Divorce Court granted a form of relief that was not requested. See Doc. 19 at 3-4. I find Mr. Fluke’s arguments to be unpersuasive and conclude that the conduct in seeking and *638 obtaining the modification of the MSA was improper.

DISCUSSION

Resolution of the issues presented in Debtor’s motion to reopen rests on determining whether Mr. Fluke may petition the Divorce Court for a modification of the MSA due to Debtor’s discharge in bankruptcy. The focus is not on what type of relief Mr. Fluke sought from the Divorce Court (here, the elimination of Debtor’s allocation of the Retirement Benefits), but whether he is entitled to seek any relief in the Divorce Court. After a hearing on August 8, 2002, the Court ruled from the bench that it would reopen Debtor’s bankruptcy case and would take the other issues presented in Debtor’s motion under advisement after further written submissions from the parties. The issue addressed here is whether Mr. Fluke’s and/or his divorce attorney’s conduct in obtaining a modification of the MSA violated § 524(a)(2)’s discharge injunction. 4

Section 524(a)(2) is a broad injunction which bars pursuit of any relief in another forum for a claim that has been discharged by the bankruptcy court. The injunction ensures that a debtor will receive the benefit of the Bankruptcy Code’s “fresh start”.

Mr. Fluke argues that two Pennsylvania cases, Romeo v. Romeo, 417 Pa.Super. 180, 611 A.2d 1325 (1992) and Lowenschuss v. Lowenschuss, 453 Pa.Super. 340, 683 A.2d 1214 (1996), justify the Divorce Court’s exercise of jurisdiction to entertain Mr. Fluke’s motion and allowed it to modify the MSA post-discharge. See Doc. 19, p. 2. The March 15th Order also relied on those two cases. However, I find that significant factual differences exist between the matter before me and the two cited cases.

In Romeo, the Pennsylvania Superior Court held that courts retain continuing jurisdiction to modify divorce distribution orders because of the powers granted to the court under Pennsylvania statute 23 Pa. Cons.Stat. Ann. § 3104(a)(1) (2003), even though the Pennsylvania divorce code does not have a specific provision addressing the modification of a final decree of property distribution. Id. at 1327-28. In Romeo, Ms. Romeo sought modification of the divorce decree due to the increased health care costs of her children and Mr. Romeo’s unwillingness to list the marital home at a reasonable price. Id. at 1327. Ms. Romeo asked the court to order Mr. Romeo to share in the costs of the health care, mortgage and insurance and to execute a reasonable listing agreement for the marital home. Id. The court granted the petition, but ordered different relief. Id. at 1328. Specifically, Mr. Romeo was given title to another property jointly owned by the couple in return for paying all of the children’s health care bills.

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Bluebook (online)
305 B.R. 635, 51 Collier Bankr. Cas. 2d 1042, 2004 Bankr. LEXIS 115, 2004 WL 257249, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-fluke-deb-2004.