Jacqueline Allen, Creditor/plaintiff in Bankruptcy Court v. Christopher Lynn Allen, Debtor/defendant in Bankruptcy Court

275 F.3d 1160, 2002 Daily Journal DAR 403, 2002 Cal. Daily Op. Serv. 288, 2002 U.S. App. LEXIS 452, 2002 WL 27605
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 11, 2002
Docket00-35528
StatusPublished
Cited by11 cases

This text of 275 F.3d 1160 (Jacqueline Allen, Creditor/plaintiff in Bankruptcy Court v. Christopher Lynn Allen, Debtor/defendant in Bankruptcy Court) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jacqueline Allen, Creditor/plaintiff in Bankruptcy Court v. Christopher Lynn Allen, Debtor/defendant in Bankruptcy Court, 275 F.3d 1160, 2002 Daily Journal DAR 403, 2002 Cal. Daily Op. Serv. 288, 2002 U.S. App. LEXIS 452, 2002 WL 27605 (9th Cir. 2002).

Opinion

McKEOWN, Circuit Judge:

Jacqueline Allen sought relief from the automatic stay imposed by her former husband’s bankruptcy filing so that she could pursue in California state court a modification of spousal support and an appeal of a dissolution judgment. The bankruptcy court denied relief on the ground that Jacqueline failed to show adequate cause pursuant to 11 U.S.C. § 362(d)(1). The district court affirmed. The question we now consider is whether Jacqueline’s efforts with respect to her dissolution proceedings should have been excepted from the automatic stay under 11 U.S.C. § 362(b)(2)(A)(ii), which exempts “the commencement or continuation of an action or proceeding for ... the establishment or modification of an order for alimony, maintenance, or support.” We hold that, to the extent they relate to spousal support, the dissolution proceedings fall within this exemption. Consequently, we reverse the order denying relief from the automatic stay and remand for further proceedings.

Background

Underlying this bankruptcy appeal is a marriage gone awry. Jacqueline and Christopher Allen were married for seventeen years before their divorce in December 1998. Christopher worked as an emergency room physician in California until he moved to Billings, Montana in April 1998. Prior to his move, Christopher practiced medicine through a professional corporation. Jacqueline was employed as Christopher’s bookkeeper and office manager. Following his move, Christopher secured employment at a hospital in Billings. Under the marriage dissolution judgment filed on December 23,1998, Jacqueline was awarded spousal support of $4500 per month plus 35% of Christopher’s earnings over $156,000 per year. Jacqueline also received certain marital assets that are not at issue here. On January 21, 1999, Jacqueline filed a notice of appeal from this judgment.

Concurrent with the dissolution proceeding, Jacqueline pursued personal injury claims against Christopher. He allegedly attacked Jacqueline in April 1996 when she refused his demands for Valium and the keys to their car. The attack occurred immediately after Christopher’s release from jail following an arrest for driving under the influence. He allegedly choked and repeatedly punched Jacqueline in the face and head. Jacqueline filed her personal injury action against Christopher in California state court in 1997. She filed *1162 extensive photographic and testimonial evidence regarding the attack. According to her filings, the attack left Jacqueline with severe neck, back, and jaw injuries, and with continuing and escalating medical expenses.

Jacqueline was proceeding with both the personal injury case and the dissolution appeal when, on February 24, 1999, Christopher filed a Chapter 13 petition for bankruptcy in Montana. Pursuant to 11 U.S.C. § 362(a), Christopher received the benefit of an automatic stay of all claims by creditors, including Jacqueline. At Jacqueline’s request, the bankruptcy court modified the bankruptcy stay pursuant to 28 U.S.C. § 157(b)(5), to authorize Jacqueline to pursue her personal injury tort claims in federal district court in California. 1

Subsequently, Jacqueline sought further relief from the automatic stay so that she could continue the dissolution appeal that had been commenced before Christopher filed for bankruptcy. She also sought relief from the stay so that she could pursue a modification of spousal support to cover the costs of “uninsured extraordinary health costs” stemming from Christopher’s alleged assault. 2

The bankruptcy court issued an order approving Christopher’s Chapter 13 Plan (“the Plan”). In that same order, the bankruptcy court refused to grant Jacqueline further relief from the automatic stay so that she could pursue modification of support and her appeal of the dissolution judgment.

The district court affirmed the order approving the Plan and denial of relief from the automatic stay. Jacqueline now appeals, raising multiple challenges to the order. Here, we address only those claims pertaining to the bankruptcy court’s refusal to grant relief from the automatic stay. The remaining issues are addressed in a separately filed memorandum disposition.

DisCussion

Two bankruptcy provisions relating to stays are at issue. Section 362(d) requires the court to grant relief from an automatic stay “for cause.” 11 U.S.C. § 362(d). Section 362(b)(2)(A) exempts certain proceedings from the stay, including the commencement or continuation of a spousal support action. 11 U.S.C. § 362(b)(2)(A)(ii). The bankruptcy court concluded that Jacqueline failed to show cause under § 362(d) because she did not demonstrate why her dissolution appeal was important to her livelihood, and because she had already been granted relief from the stay to pursue her personal injury claim against Christopher. The bankruptcy court characterized her effort to pursue relief through dissolution proceedings as a “second bite at the apple” and “pure harassment.”

The bankruptcy court did not, however, evaluate her request for relief from the stay under § 362(b)(2)(A)(ii). That section wholly / exempts certain types of *1163 actions from the automatic stay, namely, “the commencement or continuation of an action or proceeding for ... the establishment or modification of an order for alimony, maintenance, or support.” 3 Put differently, because the bankruptcy filing does not operate as a stay of these specific proceedings, good cause is not at issue under this section of the code.

The applicability of § 362(b)(2)(A)(ii) presents a question of first impression in this circuit. Indeed, there is little case law that interprets this provision. See, e.g., Vargason v. Porter (In re Vargason), 260 B.R. 488, 492 (Bankr.D.N.D.2001) (motion in state court for alimony and wage assignment covered by § 362(b)(2)(A)); In re Massengill, 227 B.R. 697, 699 (Bankr. S.D.Ind.1997) (complaint seeking state court determination as to dischargeability of divorce-related attorney’s fees covered by § 362(b)(2)(A)).

Section 362(b)(2)(A)(ii) was added to the bankruptcy code- in 1994. Bankruptcy Reform Act of 1994, Pub.L. No. 103-394 § 304 (1994). The 1994 reforms were designed to “provide greater protection for alimony, maintenance, and support obligations owing to a spouse, former spouse or child of a debtor in bankruptcy.” H.R. Rep. No. 103-835, at 54 (1994), reprinted in 1994 U.S.C.C.A.N. 3363. “[A] debtor should not use the protection of a bankruptcy filing in order to avoid legitimate marital and child support obligations.” Id.

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275 F.3d 1160, 2002 Daily Journal DAR 403, 2002 Cal. Daily Op. Serv. 288, 2002 U.S. App. LEXIS 452, 2002 WL 27605, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jacqueline-allen-creditorplaintiff-in-bankruptcy-court-v-christopher-ca9-2002.