In Re Ziets

79 B.R. 222, 17 Collier Bankr. Cas. 2d 1160, 1987 Bankr. LEXIS 1651
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedOctober 22, 1987
Docket19-10336
StatusPublished
Cited by18 cases

This text of 79 B.R. 222 (In Re Ziets) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Ziets, 79 B.R. 222, 17 Collier Bankr. Cas. 2d 1160, 1987 Bankr. LEXIS 1651 (Pa. 1987).

Opinion

OPINION

DAVID A. SCHOLL, Bankruptcy Judge.

The issue presented in the Motion before us in the instant case is whether we should allow relief from the Automatic Stay to permit the property distribution aspect of a divorce action between NELSON E. ZIETS, D.O., the Debtor, and his ex-wife, JANET ANN ZIETS (hereinafter referred to as “the Movant”) to proceed in the state court where it was pending before the Debtor filed his bankruptcy case. Our respect for the automatic stay and its function of requiring that disputes regarding property of the estate should generally be resolved by the bankruptcy court, so as to further the concept of equal distribution to all creditors, and our application of a balancing test between the interests of the Debtor and Movant, causes us to exercise our discretion to deny relief to the Movant.

The instant Chapter 11 proceeding was commenced by the Debtor, a practicing physician, on January 21, 1987. The instant Motion, pursuant to 11 U.S.C. § 362(d)(1), was filed by the Movant on August 13, 1987.

On August 18, 1987, the Debtor commenced an Adversary proceeding against the Movant and one Ellis Shore, an alleged co-habitant with the Movant in the premises owned by the parties prior to their divorce by the entireties and situated at 1458 Hagys Ford Road, Lower Merion Township. In that action, the Debtor sought to prevent the Defendants from dissipating jointly-owned personalty, and to obtain permission to sell the above-mentioned home pursuant to 11 U.S.C. § 363(h).

The hearing on the instant Motion was continued by agreement of the parties from September 10, 1987, to September 30,1987, *223 the trial date established on the Summons issued in the Adversary proceedings. On the latter date, Counsel for both parties came before us and stipulated to the following, all of which was incorporated into an Order of September 30, 1987:

1. The parties would prepare a Stipulation of Facts which would constitute the record in this case on or before October 7, 1987.

2. The parties would file Briefs in support of their respective positions, the Mov-ant, on or before October 7, 1987; and the Debtor, on or before October 14, 1987.

3. The Automatic Stay would remain in full force and effect pending the disposition of this Motion.

The parties also agreed that the Adversary Proceeding would be suspended pending our disposition. We note that a subsequent Motion to Compel Deposition was filed by Mr. Shore’s counsel in that proceeding, and is scheduled for a hearing on November 18, 1987. Our accompanying Order contemplates a conference to establish a schedule for resolution of that matter on that date.

On October 8, 1987, we filed an Opinion in another case, In re Ford, 78 B.R. 729, (Bankr.E.D.Pa.1987). The Ford Opinion addressed the proper approach of a bankruptcy court to domestic relations issues pending pre-petition in a state family court in denying a Motion of the Debtor to turn over certain funds held by the family court in connection with a partition action between a Debtor-Husband and his ex-wife. We forwarded same to the parties upon our filing same and allowed the Movant until October 14, 1987, to supplement its Brief by commenting upon that Opinion. On October 15, 1987, after granting the Movant permission for a day’s extension, we received a lengthy supplemental letter from the Movant’s counsel. The Debtor’s Brief was not received until October 16, 1987. The materials submitted by both counsel were well done despite the short time-period to prepare and greatly assisted the court in weighing the pertinent competing policies.

The parties’ Stipulation of Facts recites the commencement of a divorce action by the Movant against the Debtor in the Court of Common Pleas of Montgomery County, Pennsylvania, (herein referred to as “the state court”), at No. 84-12140, on August 1, 1984. Over two years later, on October 3, 1986, an “Equitable Distribution Conciliator” of the State Court filed a Report and Recommendations, containing only brief factual findings and recommending as follows:

1. The wife receive the parties’ jointly-owned realty, wherein she resides, subject to liens for 1981 and 1982 federal income taxes, and all other personal marital and non-marital property in her possession.

2. The Debtor receive sole right to his medical practice and all personal marital and non-marital property in his possession.

3. The Debtor pay the Movant weekly alimony of $860.00 for four years, $12,-500.00 in legal expenses, and all support arrears.

On October 14, 1986, the Debtor only filed Exceptions to the Report and Recommendations. The State Court has not acted on the Exceptions, although it did order the divorce bifurcated on March 30, 1987, and, on April 22, 1987, entered a Decree and Order in divorce, retaining jurisdiction of the property-distribution issues. The parties also stipulated that the Movant remains in sole possession of the parties’ former marital residence.

The Movant bases her Motion, on, alternatively, 11 U.S.C. § 362(d)(1) and 28 U.S.C. § 1334(c)(1). The former provides as follows:

(d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay—
(1) for cause, including the lack of adequate protection of an interest in property of such party in interest; ...

The latter provides as follows:

Nothing in this section prevents a district court in the interest of justice, or in the *224 interest of comity with State courts or respect for State law, from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.

The Movant, while apparently agreeing that the jointly-owned property is “property of the estate” of the Debtor, per 11 U.S.C. § 541(a), argues that a determination of even so much as the extent of the Debtor’s interest in the property requires a consideration of ten “relevant factors” for same set forth in the Pennsylania Divorce Code, 23 P.S. § 401(d). The State Court, per the Movant, has a particular expertise in resolving these family-law matters. Abstention is suggested due to “the obvious complexities involved in equitably distributing marital property” and this Court’s “dearth of experience in that specialized area.” Memorandum of Law in Support of Motion of Janet Ziets for Relief from Automatic Stay Proceedings Pursuant to 11 U.S.C. § 362(d)(1), at 9.

In her subsequent comment upon the Ford

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Bluebook (online)
79 B.R. 222, 17 Collier Bankr. Cas. 2d 1160, 1987 Bankr. LEXIS 1651, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ziets-paeb-1987.