In Re SS

271 B.R. 240, 2002 Bankr. LEXIS 24, 38 Bankr. Ct. Dec. (CRR) 243
CourtUnited States Bankruptcy Court, D. New Jersey
DecidedJanuary 9, 2002
Docket19-12042
StatusPublished

This text of 271 B.R. 240 (In Re SS) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re SS, 271 B.R. 240, 2002 Bankr. LEXIS 24, 38 Bankr. Ct. Dec. (CRR) 243 (N.J. 2002).

Opinion

271 B.R. 240 (2002)

In re S.S.,[1] Debtor.
V.M., Plaintiff,
v.
S.S., Defendant.

Bankruptcy No. 98-28977(RG). Adversary No. 98-2862(RG).

United States Bankruptcy Court, D. New Jersey.

January 9, 2002.

*241 *242 Caryl Wolfson Leightman, Springfield, NJ, for Plaintiff.

Elaine Harris, South Orange, NJ, for Debtor/Defendant.

OPINION

RAYMOND T. LYONS, Bankruptcy Judge.

This matter requires the court to determine whether a New Jersey statute which allows for an award of attorney's fees in a paternity suit may form the basis for an award of counsel fees in a nondischargeability action brought under 11 U.S.C. § 523. Because the American Rule in federal litigation prohibits the award of counsel fees except in certain narrow circumstances, the court concludes that the New Jersey statute does not allow the award of counsel fees in a nondischargeability action. The court in its discretion under Fed. R. Bankr.P. 7054(b) orders the debtor to pay the plaintiff's costs in the adversary proceeding in the amount of $503.26.

This court has jurisdiction under 28 U.S.C. § 1334(b)[2], 28 U.S.C. § 157(a) and (b)(1), and the Standing Order of Reference from the United States District Court for the District of New Jersey dated July 23, 1984 referring all proceedings arising under Title 11 of the United States Code to the bankruptcy court. This is a core proceeding that can be heard and determined by a bankruptcy judge under 28 U.S.C. § 157(b)(2)(I).

FACTS

The facts of the underlying case are set forth in the October 8, 1997 decision of the Superior Court of New Jersey, Appellate Division ("Appellate Division"). V.M. ("Vincent") and S.S. ("debtor" or "Sara") had an intimate relationship but never married. Sara advised Vincent that she was pregnant with his child. On October 15, 1987 Sara, then receiving Aid to Families with Dependent Children, filed a form affidavit with the Ocean County Board of Social Services. In the affidavit Sara declared that she had not had sexual intercourse with any male except Vincent for 45 days before and 45 days after the probable date of conception. An order for paternity and child support was entered against Vincent on or about February 2, 1988.

After having paid child support for several years, Vincent filed an action to reopen the issue of filiation. The court ordered a Human Leukocyte Antigen ("HLA") test which statistically eliminated Vincent as the father of the child. Nevertheless, the Chancery Division ordered that Vincent's child support obligation continue. He appealed. In an unpublished opinion the Appellate Division ruled that Sara had committed fraud on the court *243 when she swore that she had not had sexual intercourse with any male except Vincent for 45 days before and after the probable date of the child's conception:

We agree that this sworn statement, which is obviously false, is a fraud on the court. Sara could reasonably have been mistaken or in doubt about who her daughter's father was. But it is not credible that she was unaware of the falsity of her statement that she did not have sexual relations with anyone other than Vincent for forty-five days before and forty-five days after [the child's] conception.

S.S. v. V.M., No. A-901-96T3, slip op. at 9 (App.Div., October 8, 1997). The Appellate Division vacated the orders for paternity and child support. Pursuant to N.J. Stat. Ann. § 9:17-54 ("The Parentage Act") and N.J.R. 4:42-9(a)(1), Vincent was awarded counsel fees and costs of $12,759.19 incurred in overturning orders for paternity and child support obtained by fraud.

When Vincent filed an application for wage garnishment to collect his judgment, the debtor filed a petition in bankruptcy under Chapter 7. Vincent filed an adversary complaint to determine that the judgment is nondischargeable under 11 U.S.C. § 523(a)(2), § 523(a)(4), § 523(a)(5) and § 523(a)(6).

During trial, the debtor's counsel conceded that the determination by the Appellate Division that the debtor had committed fraud on the court binds the bankruptcy court. This court found, consistently with Cohen v. de la Cruz, 523 U.S. 213, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998), that the Superior Court judgment against the debtor for counsel fees and costs in the amount of $12,759.19 was a debt obtained by fraud and, therefore, nondischargeable under 11 U.S.C. § 523(a)(2)(A).

Plaintiff first requested counsel fees and costs for pursuing the nondischargeability action in the Proposed Findings of Fact and Conclusions of Law filed three days before trial. He did not request them in the adversary complaint. At trial the plaintiff reiterated his request for counsel fees in the nondischargeability action citing In re Scannell, 60 B.R. 562 (Bankr.W.D.Wis.1986). The court allowed the plaintiff to submit a memorandum on the issue and gave the debtor the opportunity to respond. The plaintiff requested counsel fees of $7,258.00 and costs of $503.26 for prosecuting the nondischargeability action. The plaintiff argued that these expenses also constitute a debt that arose from the debtor's fraud under Cohen v. de la Cruz, 523 U.S. 213, 218 and 222, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998), and that In re MacDonald, 69 B.R. 259, 278 (Bankr.D.N.J.1986) authorizes the court to award counsel fees in any action brought to enforce a child support order. The debtor filed a letter of objection based only on her asserted inability to pay.

DISCUSSION

The creditor failed to comply with the procedural requirements of Fed. R. Bankr.P. 7008(b) for applying for counsel fees.

Fed. R. Bankr.P. 7008(b) compels a party who requests counsel fees in an adversary proceeding to plead the request:

Rule 7008. General Rules of Pleading.
. . .
(b) Attorney's Fees. A request for an award of attorneys' fees shall be pleaded as a claim in a complaint, cross-claim, third-party complaint, answer, or reply as may be appropriate.

Fed.R.Civ.P. 9(g), which is incorporated into the bankruptcy rules through *244 Fed. R. Bankr.P. 7009, treats attorney's fees as an item of special damage that must be "specifically stated" when claimed.

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Bluebook (online)
271 B.R. 240, 2002 Bankr. LEXIS 24, 38 Bankr. Ct. Dec. (CRR) 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ss-njb-2002.