In re Larson-Asplund

519 B.R. 682, 2014 WL 5017833
CourtUnited States Bankruptcy Court, E.D. Michigan
DecidedOctober 8, 2014
DocketNo. 14-44240
StatusPublished
Cited by3 cases

This text of 519 B.R. 682 (In re Larson-Asplund) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Larson-Asplund, 519 B.R. 682, 2014 WL 5017833 (Mich. 2014).

Opinion

Opinion Denying Confirmation Of Chapter 13 Plan

PHILLIP J. SHEFFERLY, Bankruptcy Judge.

Introduction

This matter is before the Court upon the Debtor’s request for confirmation of his Chapter 13 plan and on the objections to the plan filed by his former spouse, Shelley B. Soleimani (“Soleimani”).

Soleimani objects to the Debtor’s plan on four grounds. First, Soleimani argues that she is the holder of a domestic support obligation, which is required to be paid in full during the life of the Debtor’s plan as a priority claim pursuant to § 1322(a)(2) of the Bankruptcy Code. Sec- • ond, Soleimani argues that the Debtor’s plan is not proposed in good faith as required by § 1325(a)(3). Third, Soleimani argues that the Debtor’s plan is not feasible as required by § 1325(a)(6). Fourth, Soleimani argues that the Debtor’s bankruptcy case was not filed in good faith as required by § 1325(a)(7).

On September 17, 2014, the Court held an evidentiary hearing. Four witnesses testified: the Debtor, the Debtor’s wife, Aidee Bonilla Ocampo, Soleimani, and one of the daughters of the Debtor and Soleim-ani. The Court received into evidence by stipulation exhibits 1, 3-10, and A-D. After carefully reviewing the parties’ briefs and the evidence adduced at trial, the Court overrules Soleimani’s first objection but sustains Soleimani’s second objection, and finds that the Debtor’s plan is not proposed in good faith, as required by § 1325(a)(3). Because the Debtor’s plan is not proposed in good faith, the Court denies the Debtor’s request for confirmation, and does not reach Soleimani’s other objections to confirmation.

[685]*685 Jurisdiction

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 157(b)(2), 28 U.S.C. § 1334, and E.D. Mich. LR 83.50(a). This a core proceeding under 28 U.S.C. § 157(b)(2)(B) and (L).

Facts

The Court finds the following facts.

The Debtor and Soleimani were married in 1992 and divorced in 2006. They had two children during their marriage (hereafter referred to as “Oldest Child” and “Youngest Child”). Their divorce was memorialized in a consent judgment of divorce (“Consent Judgment”) (Ex. 3) entered by the State of Michigan Oakland County Circuit Court, Family Court Division, on March 6, 2006. The Consent Judgment was signed by both the Debtor and Soleimani, and by an attorney, Barry Fayne, who is identified on it as Soleima-nf s attorney. The Consent Judgment contains a section titled “Child Support” that requires the Debtor to pay specific amounts for child support for each of the two children. Separate from the Child Support section, the Consent Judgment also contains a section titled “College Education Expenses.” This section states that the Debtor and Soleimani agree to each pay 50% of their two children’s college expenses of tuition, books, fees, room and board-for four years following their 18th birthday.

At the time of the Consent Judgment, the Debtor was working as a substitute teacher and collecting unemployment. So-leimani was a faculty member at Oakland Community College, with an income significantly greater 'than the Debtor’s income. Since the Consent Judgment was entered, the Debtor has had a variety of jobs, none of them with a particularly high income. The Debtor has not taught school since the Consent Judgment was entered, and has made little effort to return to the classroom, even allowing his teaching certification to lapse. Presently, the Debtor is doing landscape work on an hourly basis for Premier Landscaping. In 2008, the Debtor married his present wife, Ocampo. Ocampo has her own business cleaning homes. Ocampo contributes on a monthly basis to the Debtor’s household expenses. Although the Debtor has struggled financially since he and Soleimani divorced, he has managed to make his monthly child support payments under the Consent Judgment.

On March 31, 2011, the Debtor filed his first bankruptcy case, Chapter 7 case no. 11-49258. The Debtor obtained a discharge in this ease on July 12, 2011.

After the Debtor’s Chapter 7 case was over, the Debtor and Soleimani became involved in a dispute in the Oakland County Circuit Court over the meaning of the College Education Expenses provision in the Consent Judgment. By this time, the Oldest Child had turned 18 and was attending the University of Michigan, so the provision was now operative. Alleging that the Debtor failed to comply with his obligation under this provision, Soleimani filed a motion in the Oakland County Circuit Court to enforce it. The Debtor opposed the motion. In the Debtor’s brief (Ex. 1) filed in opposition to the motion, the Debtor took the position that the College Education Expenses provision constitutes child support, and therefore can be modified by the Oakland County Circuit Court. The Debtor’s brief then framed three specific issues for the Oakland County Circuit Court to consider. The first issue pertained to whether the College Education Expenses provision is ambiguous. The second issue pertained to whether the College Education Expenses provision constitutes child support. And the third issue was whether the Oakland County Circuit Court could order child support in an [686]*686amount that deviates from the child support guidelines enacted in Michigan.

On March 4, 2013, the Oakland County Circuit Court entered an Order Regarding the Debtor’s Motion (“State Court Ruling”) (Ex. D). In a question and answer format, the State Court Ruling responded to the three issues precisely as presented by the Debtor in his brief. Regarding the first issue, the State Court Ruling held that the College Education Expenses provision unambiguously requires both the Debtor and Soleimani to pay 50% of the college expenses, including tuition, books, fees, room and board. On the second issue, the State Court Ruling held that the College Education Expenses provision does not constitute child support. The State Court Ruling explained that the College Education Expenses provision is separate and distinct from the child support requirements of the Consent Judgment. The State Court Ruling found that, rather than child support, the obligation created by the College Education Expenses provision is an enforceable contract between the Debtor and Soleimani, which could be enforced by their adult children as third party beneficiaries of the contract. Finally, regarding the third issue, the State Court Ruling found that the Oakland County Circuit Court does have the authority to deviate from the child support guidelines in Michigan, but since the College Education Expenses provision is not child support, it did not implicate the child support guidelines.

Following the State Court Ruling, the Oakland County Circuit Court entered a money judgment on April 1, 2013 in favor of Soleimani and against the Debtor for $14,916.00 for a part of the college expenses for the Oldest Child. Soon after the entry of this judgment, the Debtor filed his second bankruptcy case, Chapter 13 case no. 13-48654, on April 29, 2013.

Because of the filing of the Chapter 13 case, further proceedings by Soleimani against the Debtor in the Oakland County Circuit Court were stayed. However, the Debtor did not confirm a plan in this Chapter 13 ease.

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Related

In re Curtis
596 B.R. 624 (W.D. Michigan, 2019)
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590 B.R. 362 (E.D. Michigan, 2018)
In re Cummings
523 B.R. 93 (W.D. Michigan, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
519 B.R. 682, 2014 WL 5017833, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-larson-asplund-mieb-2014.