Kleven v. Mrozinski (In re Mrozinski)

489 B.R. 818, 2013 WL 1200333, 2013 Bankr. LEXIS 1221
CourtUnited States Bankruptcy Court, N.D. Indiana
DecidedMarch 11, 2013
DocketBankruptcy No. 11-10608; Adversary No. 12-1020
StatusPublished
Cited by5 cases

This text of 489 B.R. 818 (Kleven v. Mrozinski (In re Mrozinski)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kleven v. Mrozinski (In re Mrozinski), 489 B.R. 818, 2013 WL 1200333, 2013 Bankr. LEXIS 1221 (Ind. 2013).

Opinion

DECISION ON MOTION TO SET ASIDE DEFAULT JUDGMENT

ROBERT E. GRANT, Chief Judge.

A default judgment was entered against the debtor in this adversary proceeding on June 12, 2012. That judgment did two things. It revoked the debtor’s discharge because he had refused to comply with a turnover order, see, 11 U.S.C. § 727(d)(3), (a)(6)(A), and it entered a money judgment against him in the sum of $2,839, the amount the turnover order required him to pay the trustee.1 The debtor has since [821]*821paid the trustee the amount required (and the trustee has filed a satisfaction of judgment) but the other component of the judgment&emdash;revocation of discharge&emdash;re-mains in place. As a result, the debtor filed the motion presently before the court, seeking relief from that aspect of the judgment. The debtor’s argument is relatively straight-forward: His discharge was revoked because he had failed to obey the court’s prior turnover order; since he has now paid that amount, the judgment revoking discharge should be set aside and his discharge restored. The motion was originally based upon Rules 60(b)(5) and (b)(6) of the Federal Rules of Civil Procedure, but, after the trustee’s brief in opposition and shortly before the hearing on the motion, the debtor seems to want to change the focus of his arguments to something more closely resembling Rule 60(b)(1). The matter is before the court following that hearing.

The court has wide discretion in deciding motions under Rule 60(b), see, Zuelzke Tool & Engineering Co. v. Anderson Die Castings, Inc., 925 F.2d 226, 228-29 (7th Cir.1991); Reinsurance Co. of America, Inc. v. Administratia Asigurarilor de Stat (Admin. of State Ins.), 902 F.2d 1275, 1277 (7th Cir.1990), Cincinnati Ins. Co. v. Flanders Elec. Motor Service, Inc., 131 F.3d 625, 628 (7th Cir.1997), and the movant bears the burden of proving that the court should grant relief. Matter of Canopy Financial Inc., 708 F.3d 934, 937 (7th Cir.2013); Peacock v. Board of School Commissioners of Indianapolis, 721 F.2d 210, 213 (7th Cir.1983).

Rule 60(b)(5) allows the court to grant relief from a judgment when it "has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable?' It is the first portion this rule that forms the basis for the debtor’s primary argument&emdash; that the judgment in question has been satisfied. This part of Rule 60(b) “has been relied upon very rarely,” 11 Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2863 (3d ed.), and so there are few reported decisions discussing it. Those that do, however, generally use it to prevent the plaintiff from obtaining a windfall by collecting more than the amount actually due on account of a particular judgment, such as when it may have been paid or satisfied by someone else or a single judgment has been entered against multiple defendants. See e.g., AIG Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 579 F.3d 1268, 1272 (11th Cir.2009); Landau & Cleary, Ltd. v. Hribar Trucking, Inc., 867 F.2d 996, 1001 (7th Cir.1989); Oliver v. City of Shattuck ex. rel. Versluis, 157 F.2d 150, 153 (10th Cir.1946); Heckling v. Allen, 15 F. 196, 198 (C.C.D.Colo.1882). See also, Lovejoy v. Murray, 70 U.S. 1, 7, 3 Wall. 1, 18 L.Ed. 129 (1865) (discussing the writ of audita querela). Consequently, this part of Rule 60(b)(5) appears to serve as a defendant’s remedy when the holder of the judgment refuses to acknowledge that it has been satisfied or to file a satisfaction of judgment. See e.g., Indiana Trial Rules 63.1(b), 67(B). Viewed in this way, the rule is inapplicable to a monetary judgment entered against a single defendant, which is later paid, unless the plaintiff would refuse to file a satisfaction or release of its judgment. That is not the situation here.

Debtor's argument that the judgment has been satisfied fails to fully appreciate that the judgment in question has two components. The first is a money judgment in the sum of $2,893; the second is the revocation of discharge. The argument based upon the satisfaction of the obligation that led to the revocation of [822]*822debtor’s discharge seems to implicate the third portion of Rule 60(b)(5), “applying it prospectively is no longer equitable,” more than it does the first. In re Jacobs, 2008 WL 4369273 *3, 2008 Bankr.LEXIS 3611 (Bankr.D.Kan.2008) (“as a practical matter, a judgment revoking a debtor’s discharge can never be satisfied.”). This portion of the rule is most appropriately addressed to injunctions, which compel a defendant to do or not to do something, when the circumstances which led the court to issue that command no longer exist. Nonetheless, it is not limited to them and can be applied to any judgment that has a prospective effect, 11Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2863 (3d ed.). We should recognize, however, nearly every judgment has some sort of prospective effect — even a money judgment will continue to have an impact upon the judgment defendant until it has been satisfied. Accordingly, the prospective effect needed to trigger this part of Rule 60(b)(5) requires the judgment to regulate the defendant’s actions in a way that would involve the court supervising the ongoing relations between the parties, changing conduct or conditions. See, Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138 (C.A.D.C.1988) (citing United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932); State of Pennsylvania v. Wheeling & Belmont Bridge Co., 59 U.S. 421, 18 How. 421, 15 L.Ed. 435 (1856)). The court’s judgment revoking the debtor’s discharge does not have that type of prospective effect. Jacobs, 2008 WL 4369273 *3, 2008 Bankr.LEXIS 3611 *11. Instead of compelling the debtor to act or to refrain from acting, or to do anything whatsoever, the court’s judgment was simply declaratory: it spelled out the rights of the debtor and his creditors as a result of this proceeding.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Bench
556 B.R. 500 (D. Utah, 2016)
Gould v. Salem
59 V.I. 813 (Supreme Court of The Virgin Islands, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
489 B.R. 818, 2013 WL 1200333, 2013 Bankr. LEXIS 1221, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kleven-v-mrozinski-in-re-mrozinski-innb-2013.