In re Stouder

164 B.R. 59, 1994 U.S. Dist. LEXIS 833
CourtDistrict Court, E.D. Louisiana
DecidedJanuary 20, 1994
DocketCiv. A. No. 93-2978; Bankruptcy No. 90-10874-JAB
StatusPublished
Cited by1 cases

This text of 164 B.R. 59 (In re Stouder) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Stouder, 164 B.R. 59, 1994 U.S. Dist. LEXIS 833 (E.D. La. 1994).

Opinion

OPINION

PATRICK E. CARR, District Judge.

The debtor/appellant in this Chapter 7 Bankruptcy matter appeals the Bankruptcy Court’s Order which granted in part debtor’s motion to expunge a claim filed by the debt- or’s former spouse against the bankruptcy estate, and modified the claim to allow one [61]*61half of the contested claim. After examination of the briefs, the whole record, and the law, this Court has determined that oral argument is unnecessary. The Court now AFFIRMS the Bankruptcy Court’s ruling in part, and MODIFIES it in part.

I.

This Court has appellate jurisdiction by virtue of 28 U.S.C. § 158(a). The Bankruptcy Court’s findings of fact are set aside only if they are clearly erroneous. Bankruptcy Rule 8013. Conclusions of law are reviewed de novo. Matter of Killebrew, 888 F.2d 1516, 1519 (5th Cir.1989).

II.

This matter evolved from what has apparently been a hotly contested divorce and post-divorce proceeding now in the seventh year of litigation. Janine Ziegler (Janine), and Michael Barbot (Michael), were married in 1978. In September of 1986, Janine filed suit for separation. Her petition for separation was granted in the latter part of 1987, along with a divorce. (Janine has since remarried.) The termination of the community regime was retroactive to the date the petition was filed in 1986.

On November 30, 1989, a consent judgment was rendered in the 24th Judicial District Court in Jefferson Parish, Docket No. 333-402, styled Michael D. Barbot versus Janine Ziegler Barbot Stouder, Divorced Wife of Michael D. Barbot.1 That judgment reads, in part, as follows:

This cause came on to be heard this 27th day of November, 1989 on motion of Michael D. Barbot and this judgment being rendered itnth concurrence of defendants, Janine Ziegler Barbot Stouder, Morris Kirschmann & Company, and Riverside Financial Corporation, ...
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IT IS ORDERED that the said Rule be made absolute and accordingly that the immovable property belonging to the community existing between Michael D. Bar-bot and Janine Ziegler Barbot Stouder located at 717 Mary Lane, River Ridge, Louisiana, be sold at private sale at the terms and conditions set forth in the purchase agreement and addendums annexed to the Petition for Partition filed in these proceedings and marked as Exhibit A.
IT IS FURTHER ORDERED that by consent the following creditors of defendant, Janine Ziegler Barbot Stouder, are to receive a portion of her one-half share of the proceeds of the sale of the above described immovable property....
IT IS FURTHER ORDERED that the remaining portion of the proceeds of the sale of the above described immovable property belonging to defendant, Janine Ziegler Barbot Stouder, be deposited into the registry of the court pending further proceedings.
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IT IS FURTHER ORDERED that Michael D. Barbot be and he is hereby recognized as the owner of an undivided one-half interest in the above described immovable property and he is thereby entitled to receive one-half of the sale proceeds at the act of sale pending a final partition of the community.

Barbot Ex. 2 (emphasis supplied).

The sale was to satisfy three judgment liens which had been recorded against Janine. The encumbrances recorded against the property were cancelled under the terms of the judgment. The sum of $13,165.99 remained after satisfaction of the liens, $1000.00 of which was what was left of Janine’s one-half share, and $12,156.99 that was Michael’s one-half share.2 The notary’s settlement statement was dated December 15, 1989, and the funds disbursed to the three judgment creditors on December 18.3 Michael’s remaining one-half share was not disbursed to him for reasons not apparent from the record before the court. By order of the court on January 30, 1990, that entire $13,-165.99 was paid to Michael’s attorney with [62]*62instructions that the funds be held in a trust account.

On March 20,1990, Janine filed for personal bankruptcy. She listed as her personal property an undivided one-half interest in the proceeds from the sale of the property of the former community, to wit, the $13,156.99 remaining from the sale of the former community residence.4 Those funds were ordered paid into her bankruptcy estate, and are the only asset of the estate.

Michael filed a proof of claim for the entire amount to recover what he believed to be his separate property from the partition of the former community property. On April 1, 1993, the Bankruptcy Court denied Michael’s request that his claim be ranked ahead of the other unsecured creditors of the bankruptcy estate. The Janine subsequently filed a motion to expunge Michael’s claim.

III.

After a lengthy hearing, the Bankruptcy Court found that there had been no final partition of the former community property between Michael and Janine. Relying on 11 U.S.C. 541(a)(2)5 and In re Hendrick, 45 B.R. 976 (M.D.La.1985),6 the judge held that the property of the unpartitioned former community was properly included in the bankruptcy estate of the debtor/former spouse. He then held that Michael had a valid claim against the bankruptcy estate, but only to the extent of an undivided one-half interest in the residual funds from the sale of the former community property. The Bankruptcy Court expunged one-half of Michael’s claim, reducing it to $6,583.00.

Janine brought this appeal asserting several alleged errors in the Bankruptcy Court’s decision. The essence of the debtor’s assignment of errors is that this matter involves only an unresolved community property dispute, and the proper resolution is for the Bankruptcy Court to return whatever excess funds of the former community remain in the bankruptcy estate, onerhalf to each former spouse, after all creditors of the estate are paid.

Michael did not cross-appeal, but filed a brief in support of the Bankruptcy Court’s decision. His brief continues to assert that the community had been settled as between the two parties and their attorneys even though a judicial settlement had not been entered.

IV.

Like In re Hendrick, this case involves the interrelationship of Louisiana community property law and federal bankruptcy law. State substantive ]¡aw determines the validity of a creditor’s underlying claim and obligations, but whether a creditor is allowed to enforce a claim is a matter of federal law and the bankruptcy court’s exercise of its equitable powers. Matter of Ford, 967 F.2d 1047, 1049-50 (5th Cir.1992) (citations omitted), r’h’g denied, 974 F.2d 1337. Louisiana law determines the property rights and liabilities of the former community property regime. In re Hendrick, 45 B.R. at 982.

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Cite This Page — Counsel Stack

Bluebook (online)
164 B.R. 59, 1994 U.S. Dist. LEXIS 833, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-stouder-laed-1994.