In re Page

519 B.R. 908, 2014 Bankr. LEXIS 4294, 2014 WL 4988216
CourtUnited States Bankruptcy Court, M.D. North Carolina
DecidedOctober 7, 2014
DocketNo. 13-51224
StatusPublished
Cited by5 cases

This text of 519 B.R. 908 (In re Page) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Page, 519 B.R. 908, 2014 Bankr. LEXIS 4294, 2014 WL 4988216 (N.C. 2014).

Opinion

MEMORANDUM OPINION AND ORDER DISMISSING DEBTORS’ CASE

CATHARINE R. ARON, Bankruptcy Judge.

THIS MATTER came before the Court on August 20, 2014, upon Creditor Steven Diaz’s Objection to Confirmation of Second Proposed Chapter 13 Plan. Appearing before the Court were Steven Diaz and his attorney, John Meadows; Russell and Christina Page (collectively, the “Debtors”) and their attorney, Wes Sehollander; and Kathryn Bringle, on behalf of the Office of the Chapter 13 Trustee.' Based upon the pleadings and the arguments of counsel, the Court makes the following findings of fact and conclusions of law pursuant to Rules 9014 and 7052 of the Federal Rules of Bankruptcy Procedure.

JURISDICTION

This Court has jurisdiction over the parties and subject matter of this proceeding pursuant to 28 U.S.C. §§ 151, 157, and 1334 and Local Rule 83.11 entered by the United States District Court for the Middle District of North Carolina. This is a core proceeding, within the meaning of 28 U.S.C. § 157(b)(2), which this Court has jurisdiction to hear and determine.

FINDINGS OF FACT

Steven Diaz is the ex-husband of Christina Page. They have five biological children, ranging from ages 8 to 21. ■ Mrs. Page divorced Mr. Diaz in 2009 and married Russell Page the same year. Mr. Diaz and Mrs. Page executed a Separation and Property Settlement Agreement on October 16, 2008, in Forsyth County, North Carolina. The agreement became enforceable through an order of the For-syth County District Court entered on January 26, 2009 (“Separation Order”). The separation was not amicable and remained strained after the divorce. On June 1, 2009, Mr. Diaz filed a Motion in Forsyth County state court (“First Contempt Motion”) requesting that the state court find Mrs. Page in contempt of the Separation Order.

After a hearing on Mr. Diaz’s First Contempt Motion and by Order dated May 11, 2010, the Honorable George Bedsworth of the Forsyth County District Court found Mrs. Page in willful violation of the Separation Order and ordered her to pay a reasonable sum toward Mr. Diaz’s legal fees (“First Contempt Order”). Mrs. Page appealed the First Contempt Order to the North Carolina Court of Appeals on May 26, 2010. The Court of Appeals dismissed Mrs. Page’s appeal of the First Contempt Order, concluding in an opinion issued June 7, 2011, that the appeal was “clearly interlocutory.” Diaz v. Diaz, 212 N.C.App. 419, 713 S.E.2d 791 (2011).

On September 2, 2011, Judge Bedsworth ordered Mrs. Page to pay Mr. Diaz $17,000 before December 1, 2011, for attorney’s [911]*911fees he had incurred in relation to his First Contempt Motion (“First Fee Order”). Nearly two years later on June 27, 2013, the Honorable Lisa Menefee of the Forsyth County District Court entered a separate order requiring Mrs. Page to pay Mr. Diaz $13,691.16 within thirty days, on account of the appellate attorney’s fees Mr. Diaz incurred in defending against Mrs. Page’s appeal of the First Contempt Order (“Second Fee Order”). On October 2, 2013, Judge Menefee found Mrs. Page in willful contempt of the First Contempt Order and ordered her to either pay Mr. Diaz $17,000 before October 31, 2013, or spend thirty days in the custody of the Sherriff of Forsyth County (“Second Contempt Order”).

Two days after the entry of the Second Contempt Order, Mr. and Mrs. Page filed a petition for relief under Chapter 13 of the Bankruptcy Code. The Debtors listed $177,400 in secured debt, comprised of a first and a second mortgage on the Debtors’ residence that is titled in the name of the female debtor only and has in excess of $20,000.00 in equity; $13,220 in unsecured priority debt that includes four tax claims and $12,000 in child support arrears owed by Mr. Page to his ex-wife; and $140,115 in general unsecured debt. The Debtors claimed eight dependents, including all five of Mrs. Page’s biological children with Mr. Diaz (step-children to Mr. Page), two biological children of Mr. and Mrs. Page, and one biological child of Mr. Page (step-child to Mrs. Page). At the time of filing, the Debtors’ sole income was from food stamps, and they had a net monthly income of negative $5,028 per month, partly on account of a monthly obligation of $1,319 for dependents living outside the home. Their only other sources of income in 2013 had been from Mr. Page’s unemployment income and Mrs. Page’s child support income. They both had employment income in 2011 and 2012. The Debtors listed $13,695 owed to Mr. Diaz pursuant to the Second Fee Order and classified it as a general unsecured claim. The Debtors did not list any debt from the First Fee Order.

The Debtors’ first Proposed Plan was filed November 27, 2013. The plan provided for a plan payment of $150 per month over 36 months, with an estimated dividend to general unsecured creditors of 0%. Mr. Diaz filed two proofs of claim on December 4, 2013: one for a $17,000 unsecured priority claim on account of the First Fee Order and Second Contempt Order, and one for a $13,691.16 unsecured priority claim on account of the Second Fee Order. Mr. Diaz listed both claims as being entitled to priority as Domestic Support Obligations, pursuant to 11 U.S.C. § 501(a)(1)(A) or (B).

Mr. Diaz filed an Objection to Confirmation on'December 5, 2013, on the grounds that it did not account for his two priority claims. In a brief submitted February 17, 2014, Mr. Diaz additionally argued that the plan was not proposed in good faith. At the hearing on that matter on January 15, 2014, Mrs. Page testified, without objection, that the reason the Debtors filed for relief under Chapter 13 as- opposed to Chapter 7 was because she was advised by counsel that only Chapter 13 would enable the Debtors to discharge debts for attorney’s fees incurred by herself and Mr. Page. Compare 11 U.S.C. § 1328(a)(2) with 11 U.S.C. § 523(a)(15).

This Court denied confirmation on February 28, 2014, finding that the Debtors’ proposed monthly payments of $150 were insufficient for the required “full payment, in deferred cash payments, of all claims entitled to priority,” namely Mr. Page’s $12,000 child support arrearage. 11 U.S.C. § 1322(a)(2); see also 11 U.S.C. § 1325(a)(6). Moreover, this Court found [912]*912that the Debtors had not made the required showing that they were current on post-petition domestic support obligations. See 11 U.S.C. § 1325(a)(8).

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Cite This Page — Counsel Stack

Bluebook (online)
519 B.R. 908, 2014 Bankr. LEXIS 4294, 2014 WL 4988216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-page-ncmb-2014.