In re Mooney

532 B.R. 313, 2015 Bankr. LEXIS 2054, 2015 WL 3897390
CourtUnited States Bankruptcy Court, D. Idaho
DecidedJune 23, 2015
DocketCase No. 12-01243-TLM
StatusPublished
Cited by3 cases

This text of 532 B.R. 313 (In re Mooney) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Idaho primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Mooney, 532 B.R. 313, 2015 Bankr. LEXIS 2054, 2015 WL 3897390 (Idaho 2015).

Opinion

MEMORANDUM OF DECISION

TERRY L. MYERS, CHIEF U. S. BANKRUPTCY JUDGE

Chapter 13 debtor Patrick Mooney filed a Motion Seeking Contempt Citation for Violation of the Discharge Injunction, Doc. No. 99 (“Motion”), against his ex-wife, Lynn Mooney.1 On May 11, 2015, the Motion was heard at an evidentiary hearing and taken under advisement following closing argument.2 This Decision constitutes the Court’s findings and conclusions on the contested matter. See Rules 7052, 9014.3

BACKGROUND AND FACTS

Patrick and Lynn were married on July 23, 2005, in Virginia Beach, Virginia. Their four children were born in 2004, 2005, 2008 and 2010. They resided at 19027 Hallbrook Ct., in Leesburg, Virginia (the “Residence”). Patrick testified at hearing that he left Virginia and relocated to Idaho in January 2012. He then filed a divorce action in Idaho state court in February 2012. Lynn’s divorce action was filed on March 2, 2012, in Virginia state court. The Idaho court entered a judgment of divorce on April 9, 2012.

The Virginia action sought not just a divorce, but also to resolve custody, spousal support and child support issues.4 Lynn also asked the Virginia court to determine the title, ownership and value of all real and personal property; determine marital property, separate property, and property that was a combination of the two; divide, transfer or partition marital property titled in the names of both parties; and “grant [Lynn] a monetary award, payable in either a lump sum or over a period of time in fixed amounts.” Ex. 202.

After the Idaho divorce judgment was entered, and after Patrick filed an answer in the Virginia action, he filed his May 23, 2012 petition commencing a chapter 13 case before this Court. Ex. 200.

[317]*317Patrick’s schedule A identified the Residence, as well as certain other real property interests. However, in regard to the Residence, the disclosure of the “nature of debtor’s interest in property” was left blank, and the disclosure of whether that property was owned by “husband, wife, joint, or community” was also not completed. See Ex. 200 at 8. However, in later submissions related to his attempts to sell the Residence (a topic discussed further below), Patrick indicated he acquired fee simple interest to the property, in his individual name alone, under a July 28, 2010 deed.. Doc. Nos. 41, 41-3.

Patrick did not list Lynn as a creditor on schedules D, E or F. He did list her as a “co-debtor” on schedule H.5 It is undisputed, though, that he put Lynn on the master mailing matrix (“MML”) and that notice of bankruptcy was sent to her at the Residence on May 26, 2012.6 The notice contained the September 20, 2012 bar date established for filing non-governmental proofs of claim.

Patrick scheduled the value of the Residence as $900,000 with two secured claims totaling $802,063: a mortgage to Bank of America ($712,063) and an IRS tax lien ($90,000). Patrick filed his chapter 13 plan with the petition. Doc. No. 3 (“Plan”). The Plan proposed 60 monthly payments of $4,000 to the trustee. That would provide for payment of the IRS lien with interest (at $1,616.44 per month) through the trustee, and Patrick proposed making direct payments to Bank of America on its secured claim. The Plan provided for vesting of property in the debtor upon confirmation.

On June 19, 2012, Patrick filed a pre-confirmation motion under §§ 363(b) and 1303 seeking approval to sell the Residence for $900,000 under an April 12, 2012 contract, estimating the estate would receive ab'out $43,500 net after costs of sale and satisfaction of both the IRS lien and the Bank of America security interest. Doc. No. 22. Patrick noted, though, that the Residence was subject to a pendente1 lite order of the Virginia court prohibiting transfer, disposition or sale absent that court’s approval.7 He asserted, in this regard, that a July 10, 2012 hearing in the Virginia court should resolve that issue. Id. This motion was served on all MML creditors, including Lynn. Id. at 6.

Lynn — appearing in this Court through counsel and characterizing herself as an “interested party” — objected to the motion on July 9, 2012. Doc. No. 29. She disputed thé nature of Patrick’s interest in the Residence, and relied on her own claim to an ownership interest in the Residence as “marital property” under Virginia law. She also argued she and the children would be required to move if it was sold and thus suffer hardship, and that the proposed purchase price was too low. Lynn also noted that she anticipated seeking relief from the § 362(a) stay in order to pursue issues of property division in the Virginia court. Id.8 Lynn scheduled her [318]*318objection for hearing on August 6, 2012, but Lynn and Patrick subsequently agreed to continue the hearing to August 27, 2012. Doc. Nos. 30, 36.

Patrick’s response to the objection indicated that Lynn’s interest in the Residence was equitable, not legal, in nature, because the property was titled in his name alone. He asserted that the Virginia court, under applicable statute, could not order the division or transfer of that property (since it was not jointly owned) nor give Lynn an interest in it, but that court could award her a money judgment. Doc. No. 41.9

At the August 27 hearing on the sale motion and objection, counsel for Lynn and Patrick agreed to a further continuance to October 16 in conjunction with the rescheduled plan confirmation hearing.

Lynn did not file a proof of claim by the September 20 bar date. The lack of any filed claim was duly noted in Patrick’s October 9 prehearing brief. See Doc. No. 58 at 3-6. Patrick argued that Lynn’s potential monetary award under Virginia statute was a pre-petition claim and that, by failing to file a proof of claim, Lynn lacked standing to object to confirmation of the plan, or to object to the sale based on an asserted inadequate sale’s price. Id.

At the October 16 hearing, Lynn’s counsel elected to withdraw all objections to the sale except for the allegation of an inadequate purchase price. Her counsel responded to Patrick’s contentions regarding standing by asserting Lynn’s interest in the Residence was “equitable” in nature and sufficient for her “interested party” standing. Admitting Lynn had not filed a proof of claim, Lynn’s counsel argued that, if and when she received a money judgment from the Virginia court, it would be a “post-petition claim.” For that reason, counsel stated, Lynn’s appearances in the bankruptcy court were expressly made as an “interested party” rather than as a “creditor.” Debtor’s counsel rejoined, arguing the equitable interest and related right to potential money judgment constituted, under the Code, a pre-petition claim because the Virginia divorce action in which Lynn asserted such a right to a money judgment had been filed by her before bankruptcy.

The Court declined to resolve the parties’ conflict as to the pre- or post-petition nature of the claim, or to address “standing” questions. The former issue was not properly before it' at that time.

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Cite This Page — Counsel Stack

Bluebook (online)
532 B.R. 313, 2015 Bankr. LEXIS 2054, 2015 WL 3897390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-mooney-idb-2015.