McGrath v. McGrath (In re McGrath)

298 B.R. 56, 2003 Bankr. LEXIS 1055
CourtUnited States Bankruptcy Court, W.D. Pennsylvania
DecidedSeptember 4, 2003
DocketBankruptcy No. 01-20642 JKF; Motion No. RLG-2; Related to Docket Nos. 63, 96
StatusPublished
Cited by3 cases

This text of 298 B.R. 56 (McGrath v. McGrath (In re McGrath)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McGrath v. McGrath (In re McGrath), 298 B.R. 56, 2003 Bankr. LEXIS 1055 (Pa. 2003).

Opinion

MEMORANDUM OPINION3

JUDITH K. FITZGERALD, Chief Judge.

Before the court is a Motion for Sanctions against Debtor by his nondebtor [57]*57spouse, Donnalyn McGrath.4 Movant asks that Debtor be held in contempt for failure to comply with orders of this court requiring him to respond to discovery requests in state court actions (seeking divorce, support, alimony, equitable distribution of marital assets and liabilities and child custody). Movant also requests that this court order the immediate incarceration of Debtor5 during which time he must provide full details of his business and include methods of verifying the same relative to his self-employment. Further, Movant requests imposition of counsel fees and costs in addition to expenses of $2,000 but has filed nothing to substantiate the request.6 Nonetheless, given the number of hearings and counsel’s time involved just appearing before this court, $2,000 is a reasonable sum and will be approved. Movant was permitted to supplement her Motion for Sanctions and Debtor to respond. Both have done so.7

The gravamen of the instant motion is that Debtor has failed to comply with orders of this court and the Court of Common Pleas of Allegheny County, Pennsylvania, and has thereby caused Movant to incur substantially greater attorney fees as she seeks to enforce child custody, child support and other obligations through the state court system. This court voided a bench warrant issued by a Hearing Officer of the Court of Common Pleas after the automatic stay took effect and ordered Debtor to respond to all discovery requests made in the state court action and to provide the bankruptcy trustee and this court with answers to interrogatories and requests for admissions for the years 1999, 2000, and 2001. Debtor was also ordered to timely file his tax returns for the year 2000. Debtor timely filed with this court the answers to interrogatories and responses to a request for production of documents on April 30, 2001. Thereafter Movant filed the first motion for sanctions alleging that Debtor did not produce

documentation which verifies his tax return entries, nor Debtor’s earnings, car and truck expenses, materials, invoices, jobs, fees, income, nor any means whatsoever of objectively verifying and calculating Debtors’ gross income or cost of goods in calculating Debtor’s earnings.

Dkt. No. 42 at ¶ 3. By order dated October 22, 2001, this court granted Movant relief from stay to pursue only custody matters in state court and reserved enforcement of all financial components of the issues to itself. Dkt. No. 87. At a hearing held October 12, 2001, this court also entered an oral order requiring that

(1) operating reports be brought current by Debtor by November 20, 2001, and kept current thereafter or the case would be dismissed;

[58]*58(2) all of Debtor’s jobs (Debtor is a carpenter) were to have a written contract, estimate, receipts and invoices for materials, documentation of each job including customer name or location, bids, payments, advances, profit or loss from each job, etc. He was also to deposit all cash receipts into a single checking account noting the source of the cash and listing the name, address, and telephone number of the customer or other entity from which the check was received. Any checks written to cash by Debtor were to include a notation of the purpose (notations such as “supplies” were unacceptable by the terms of the; order)8 and any job associated with the withdrawal;

(3) counsel for Debtor was to produce all documents in her office for inspection and copying at Movant’s expense and that such inspection was to be completed by December 7, 2001;

(4) the motion for sanctions was to be supplemented and a response by Debtor was voluntary. The oral order was later memorialized in a written order dated November 1, 2001, which was submitted by Movant’s counsel and modified by the court.

The supplement to the motion for sanctions alleges that Debtor continues in his noncompliance with orders of the Court of Common Pleas and this court. Debtor’s response states that he has complied with the Bankruptcy Court’s orders to the “best of his ability” and that repeated allegations of lack of compliance are “unfounded” and attempts at obtaining sanctions were “harassing”.

It appears from the Statements of Operations filed by Debtor subsequent to the November 1, 2001, order that Debtor has not complied with that order. Invoices merely state a last name of a customer, no address or other information as required by the November 1 order, and insufficient detail regarding costs of materials, payments to Debtor, expenses Debtor incurred, etc.

With respect to the initial motion for sanctions, Movant argues that numerous jobs were conspicuously unreported by Debtor, based on her comparison of Debt- or’s records with his testimony before the Hearing Officer in the Family Division of the Court of Common Pleas. She also contended that Debtor “unilaterally retrieved all of the documents” from his attorney’s office before Movant was finished reviewing them. Motion for Sanctions, Dkt. No. 42, at ¶ 14. Debtor argued that Movant had had enough time to review the documents. Nonetheless, the order of November 1, 2001, required Debt- or’s counsel to produce all documents through April 30, 2001, for inspection and copying at Movant’s expense no later than November 15, 2001. Movant was ordered to complete her inspection by December 7.

The supplement to the motion for sanctions was filed in January of 2002 and referred to deficiencies in Debtor’s testimony to the Court of Common Pleas Hearing Officer in October of 2001 before this court entered the November 1 order. It is apparent that Debtor’s record keeping leaves much to be desired. For example, his testimony before the Hearing Officer on October 18, 2001, indicates that on a particular job after April 1, 2001, he earned $500 per week and that he worked 10 to 12 weeks at that particular location. Exhibit L, Family Division Transcript of October 18, 2001, at 8, 15-16. He also testified that he deposited payments in his [59]*59account at Iron and Glass Bank. Id. at 16. However, his bank statement from that month does not reflect any $500 deposits. There are only 3 deposits and they are in the amounts of $618.35, $250.00, and $576.98. There is no explanation or accounting for the rest of the income he testified that he had. The Statement of Operations provides no detail. This single example is representative of the information Debtor has supplied to this court. However, he testified that the people for whom he is working keep track of his hours when he is paid on an hourly basis. Dkt. No. 96, Exhibit L, Family Division Transcript of October 18, 2001, at 9. He also testified that he has no subcontractors or crew working for him but calls on people he knows in different trades. Id. at 17. Movant points out that Debtor submitted receipts during a time period when he was out of the country but his answer to the supplement to the motion for sanctions states that “co-workers hired for the jobs he was employed with occasionally purchased material for [him] when it was the co-worker’s turn ... and ... the receipt would still be attributed to” Debtor. Answer to Supplement, Dkt. No. 98, at ¶ 5(i). The answer also states that he produced cash receipts for the period when he was in Sweden as material was purchased “on his behalf’.

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298 B.R. 56, 2003 Bankr. LEXIS 1055, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcgrath-v-mcgrath-in-re-mcgrath-pawb-2003.