State of Illinois, Department of Mental Health & Developmental Disabilities v. Pritchett (In Re Pritchett)

8 B.R. 647, 1981 Bankr. LEXIS 4969
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedFebruary 4, 1981
Docket19-03734
StatusPublished

This text of 8 B.R. 647 (State of Illinois, Department of Mental Health & Developmental Disabilities v. Pritchett (In Re Pritchett)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State of Illinois, Department of Mental Health & Developmental Disabilities v. Pritchett (In Re Pritchett), 8 B.R. 647, 1981 Bankr. LEXIS 4969 (Ill. 1981).

Opinion

OPINION AND ORDER

RICHARD L. MERRICK, Bankruptcy Judge.

This cause came on to be heard on the Defendant’s Motion to Dismiss the Plaintiff’s Complaint to Determine Discharge-ability of Debt. The debt arises out of an obligation to make payment for health care provided to the mother of the defendant-debtor, Herbert Pritchett (hereinafter “Pritchett”), by the Illinois Department of Mental Health and Developmental Disabilities (hereinafter “the Department”).

The facts as pleaded in the Complaint show that Pritchett’s late mother, Ella Pritchett, received services from the department at its Elgin Mental Health Center, and that Mrs. Pritchett was required to pay for those services. Illinois Mental Health Code, Ill.Rev.Stat. ch. 911/2 § 5-105. Pritch-ett was certified as the representative payee of his mother’s Social Security benefits and received the benefits for her as a fiduciary. Although he was obliged to use the funds to pay any liabilities incurred by his mother for health care or maintenance, 26 C.F.R. § 404.1603, 04, 06 (1980), Pritchett refused to pay the Department for the services given her and kept the Social Security payments for his own use.

On December 12,1979, Pritchett and his wife filed a petition in bankruptcy under Chapter 7 of the Bankruptcy Code and scheduled the debt to the department. It was listed as a $6,000.00 unsecured claim, the consideration for which was “care of mother of petitioner, Herbert Pritchett.” Pritchett and his wife were discharged on March 6, 1980, and the estate was closed. On July 29, 1980, the Court reopened the estate on motion of the department in order to allow the department to file its com *649 plaint to determine dischargeability of debt. The complaint was filed on August 28,1980, and Pritchett responded with his motion to dismiss on September 16. He cites two grounds to support his motion:

(1) The department does not have standing to raise the issues contained in its complaint; and
(2) The only party that would have standing to raise the issue of alleged misappropriation of funds due Ella Pritchett would be Ella Pritchett’s estate.

The facts presented in the complaint will be taken as correct because for the purposes of this decision, the motion to dismiss admits all facts properly pleaded but does not admit conclusions of law. 2A Moore’s Federal Practice ¶ 12.08 at 2267 (2d ed. 1980). But the Court should point out that Pritch-ett has raised the defenses in his motion improperly. Rule 12(b) of the Federal Rules of Civil Procedure (incorporated by reference in Rule 712(b) of the Rules of Bankruptcy Procedure) provides the “[e]very defense, in law or in fact, to a claim for relief in any pleading . . . shall be asserted in the responsive pleading thereto .... ” Seven specific defenses may be made by a pre-answer motion. The defenses supporting Pritchett’s motion to dismiss are not included. Thus these defenses should have been raised in an answer rather than in a motion to dismiss. Nevertheless, the Court will waive the error and deal with the issues raised by Pritchett’s motion.

The Court can only guess whether there are legal authorities supporting Pritchett’s position. Pritchett’s attorney did not submit a brief or memorandum of law in support of the motion to dismiss and he failed to appear for two hearings on his motion. But the law on the issue of standing is fairly clear, and after consideration of the relevant case law and statutes this Court holds that Pritchett’s motion to dismiss should be denied for the following reasons.

The United States Supreme Court has considered the issue of standing on a number of occasions and its decisions show that a plaintiff must meet several requirements. The plaintiff must have “such a personal stake in the outcome of the controversy as to insure the concrete adverseness which sharpens the presentation of issues.” Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962). More recent cases have established the requirement of an “injury on fact” to the plaintiff. Schlesinger v. Reservists, 418 U.S. 208, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974); U. S. v. Richardson, 418 U.S. 166, 94 S.Ct. 2940, 41 L.Ed.2d 678 (1974). The plaintiff must also show that his grievance will be redressed by a favorable decision. Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976); Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).

Here the Department has provided services for which Pritchett is liable in his capacity as representative payee of his mother’s Social Security benefits. Pritchett admitted the debt to the Department in his schedules and does not dispute it. The Department will be injured by the discharge of Pritchett’s debt; there is no question that the inability to collect a liquidated, non-contingent, non-disputed debt is a real and actual injury of the kind required by the Supreme Court. A determination by this Court that Pritchett’s debt is nondis-chargeable would eliminate the Department’s grievance, thus meeting the Supreme Court’s other test for standing.

Although the Department meets the constitutional tests for standing, the Court would also point out that the Department qualifies to bring its complaint under the relevant Bankruptcy statutes. Rule 409(a)(1) of the Rules of Bankruptcy Procedure provides that “(a) bankrupt or any creditor may file a complaint with the court to obtain a determination of the discharge-ability of any debt.” The Bankruptcy Code defines “creditor” to be an “entity that has a claim against the debtor that arose at or before the order for relief concerning the debtor.” 11 U.S.C. § 101(9)(A) (Supp. II 1978). The Department qualifies as an entity with a claim against the debtor. In *650 deed, it is difficult to imagine who would have standing to request a determination of dischargeability of a debt if the party to whom the debt is owed does not have such standing.

Turning to Pritchett’s contention that only Ella Pritchett’s estate can raise the issue of alleged misappropriation of funds due her, the issue may be simplified by visualizing the circumstances where the recipient of the Social Security payments does not have a conservator, attorney-in-fact, or other judiciary acting for her. Under those circumstances nobody would question the right of the Department to sue her for reimbursement of its expenses in providing care for her. The interposition of a fiduciary does not change the basic structure.

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Related

Baker v. Carr
369 U.S. 186 (Supreme Court, 1962)
United States v. Richardson
418 U.S. 166 (Supreme Court, 1974)
Schlesinger v. Reservists Committee to Stop the War
418 U.S. 208 (Supreme Court, 1974)
Warth v. Seldin
422 U.S. 490 (Supreme Court, 1975)

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Bluebook (online)
8 B.R. 647, 1981 Bankr. LEXIS 4969, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-illinois-department-of-mental-health-developmental-disabilities-ilnb-1981.