Summerlin v. Summerlin (In Re Summerlin)

26 B.R. 875, 1983 Bankr. LEXIS 6997
CourtUnited States Bankruptcy Court, E.D. North Carolina
DecidedJanuary 20, 1983
Docket19-00912
StatusPublished
Cited by5 cases

This text of 26 B.R. 875 (Summerlin v. Summerlin (In Re Summerlin)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Summerlin v. Summerlin (In Re Summerlin), 26 B.R. 875, 1983 Bankr. LEXIS 6997 (N.C. 1983).

Opinion

MEMORANDUM OPINION

A. THOMAS SMALL, Bankruptcy Judge.

In this case the Plaintiff seeks to recover alimony from her estranged husband, who is a debtor under chapter 11 of the Bankruptcy Code.

The debtor’s spouse filed a Complaint on December 16, 1982, asking for relief from the automatic stay of 11 U.S.C. § 362(a) to proceed in State Court to enforce a pre-bankruptcy State Court Order awarding her alimony pendente lite. The debtor’s spouse also seeks to require the chapter 11 debtor to “specify and enumerate” his exempt property and to impose an equitable lien on the assets of the debtor’s estate.

The debtor contends that the State Court Order was in essence a property settlement rather than alimony and that, in any event, to permit his spouse to pursue his exempt assets would jeopardize his prospects of formulating a successful chapter 11 plan. The trial was held on January 10, 1983.

The facts relevant to the alimony controversy are as follows:

On November 12,1981, the District Court for Edgecombe County, North Carolina entered an Order against the debtor in favor of his wife for alimony pendente lite. The State Court found that the Debtor had treated his spouse of 10 years in a cruel manner and that he had without just cause abandoned her on May 16,1981. The State Court found that the debtor’s income and prospects for future income exceeded that of his wife and that she was dependent upon him for support. The Order provided that the debtor:

1) pay to his wife the sum of $125.00 per week;

2) maintain hospitalization and medical insurance for the benefit of his wife;

3) pay uninsured medical and dental bills of his wife;

4) discharge the monthly mortgage payments, hazard premiums and ad valorem *877 taxes on the home of which the wife is to have sole use and possession;

5) maintain in a safe, sound and insured condition a 1977 Cadillac of which the wife is to have sole use and possession; and

6) pay his wife’s attorney’s fees in the sum of $2,600.00.

The $125.00 weekly payments were to be made to the office of the Clerk of Superior Court of Edgecombe County, North Carolina, but the debtor has made no weekly payments since September, 1982. The debt- or has made the mortgage payments on the home but has allowed his hospitalization and medical insurance to lapse. Before the Plaintiff could commence contempt proceedings in the State Court against her husband, the debtor, on October 18, 1982, filed a petition for relief under chapter 11.

While not bound to follow the State Court’s determination that the State Court’s Order represents an award for alimony, the Court finds the relief required by the State Court Order does in fact represent alimony. The State Court specifically considered the relative earnings of each spouse and found that the wife was dependent upon her husband for support. The payments which are enforceable by contempt proceedings (North Carolina General Statute 50-16.7(j)) represent the wife’s immediate living expenses and needs. Although the Plaintiff is to have sole use and possession of the marital home, the joint ownership as tenants by the entirety of the home is not affected by the State Court Order. The award is clearly alimony. (See In re Vickers, 24 B.R. 112 (M.D.Tenn.1982)).

Having decided that the State Court Order is in the nature of alimony, we must now confront a more difficult issue. Against what property may the Plaintiff enforce her alimony claims?

Although unsecured claims for alimony do not have priority in distribution over other unsecured claims (11 U.S.C. § 507(a)), the Bankruptcy Code affords superior rights for the collection of alimony. Claims for alimony are non-dischargeable (11 U.S.C. § 523(a)(5)), are enforceable against the debtor’s exempt property (11 U.S.C. § 522(c)(1)) and are excepted from the automatic stay with respect to property which is “not property of the estate” (11 U.S.C. § 362(b)(2)).

The needs and rights of the alimony claimant, however, must be balanced against the needs and rights of the debtor to seek rehabilitation under the Bankruptcy Code. This balancing of rights and needs has been considered by several courts in chapter 13 cases, but the issue is infrequently raised in cases under chapter 11. (See In re Sak, 21 B.R. 305 (E.D.N.Y.1982); In re Garrison, 5 B.R. 256 (E.D.Mich.1980); In re Adams, 12 B.R. 540 (D.Utah 1981); and In re Lanham, 7 B.C.D. 1358, 13 B.R. 45 (C.D.Ill.1981)).

The automatic stay of 11 U.S.C. § 362 does not prohibit the collection of alimony from property that is “not property of the estate” (11 U.S.C. § 362(b)(2)). Property acquired by the debtor after the filing of the bankruptcy petition is “not property of the estate” unless it is property which: the trustee recovers under 11 U.S.C. §§ 543, 550, 553, or 723 (11 U.S.C. § 541(a)(3)); is preserved for the benefit of or ordered transferred to the estate under 11 U.S.C. § 510(c) or 551 (11 U.S.C. § 541(a)(4)); is acquired by the debtor within 180 days after the bankruptcy petition a) by bequest, devise or inheritance, b) as a result of a property settlement with the debtor’s spouse or of an interlocutory or final divorce decree, or c) as a beneficiary of a life insurance policy or of a death benefit plan (11 U.S.C. § 541(a)(5)); is proceeds, product, offspring, rents, and profits of or from property of the estate (11 U.S.C. § 541(a)(6)); or is an interest in property that the estate acquired after the commencement of the case (11 U.S.C. § 541(a)(7)).

The most promising source of post-petition property in the present ease is the debtor’s future earnings. Unlike post-petition earnings in a chapter 13 case (11 U.S.C. § 1306

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Cite This Page — Counsel Stack

Bluebook (online)
26 B.R. 875, 1983 Bankr. LEXIS 6997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/summerlin-v-summerlin-in-re-summerlin-nceb-1983.