Van Wert Co. Hospital v. French (In re Cummings)

266 B.R. 138
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedJanuary 8, 2001
DocketNos. 00-3111, 99-33500
StatusPublished
Cited by1 cases

This text of 266 B.R. 138 (Van Wert Co. Hospital v. French (In re Cummings)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Van Wert Co. Hospital v. French (In re Cummings), 266 B.R. 138 (Ohio 2001).

Opinion

MEMORANDUM OPINION AND DECISION

RICHARD L. SPEER, Chief Judge..

This cause comes before the Court upon Trustee’s Motion for Summary Judgment, and Memorandum in Support; and the Plaintiffs Motion for Summary Judgment, Memorandum in Support, and Response to the Trustee’s Motion for Summary Judgment. In addition, Robert K. Holmes, Clerk of Courts for the Municipal Court of Lima, as a third-party defendant, submitted a Response to the Trustee’s Motion for Summary Judgment. This Court has now had the opportunity to review the arguments of Counsel, the exhibits, as well as the entire record of the case. Based upon that review, and for the following reasons, the Court finds that the Trustee’s Motion for Summary Judgment should be Denied; and that the Plaintiffs Motion for Summary Judgment should be Granted.

FACTS

The relevant facts of this case, which are not in dispute, are very straightforward. In 1998 the Debtors, Charles Cummings and Tammy Cummings (hereinafter referred to collectively as the “Debtors”) were sued by two separate creditors for unpaid debts. These creditors were the Plaintiff, Van Wert County Hospital, and Anesthesia Associates of Lima, Inc. Attorney Hearn served as legal counsel for both of these creditors.

In July of 1998, the Van Wert County Hospital obtained a default judgment in the amount of Six Hundred Forty-seven and °9ioo dollars ($647.08) against the Debtors after they failed to appear in the state court proceeding. In order to enforce this judgment, Attorney Hearn, obtained on August 21, 1998, an order of garnishment against the Debtor, Charles Cummings (hereinafter referred to individually as the “Debtor”) which was then served on the garnishee (the Debtor’s employer) on August 24, 1998. On August 5, 1999, almost one (1) year after service of the Plaintiffs garnishment order was perfected on the garnishee, it appears that in accordance with the garnishment order, the garnishee paid to the Lima Municipal Clerk of Courts an amount of slightly less than Three Hundred dollars ($300.00). However, before these funds were disbursed, the Debtors, on August 23, 1999, filed a petition in this Court for relief under Chapter 7 of the United States Bankruptcy Code.

On August 25, 1999, the Lima Municipal Court received notice of the Debtors’ bankruptcy petition. In addition, on that same day, the Debtors, by and through their attorney, filed a Motion to release the garnished funds to the Trustee. This motion was then granted by an order entered on September 1, 1999, by the Honorable Rickard Workman. However, just before this order was entered, the Lima Municipal Clerk of Courts, on August 29, 1999, processed and mailed the approximately Three Hundred dollars ($300.00) in garnished funds to Attorney Hearn, who has since refused to turnover the funds to the Trustee. The reason given by the Clerk of Courts for issuing the garnished funds to Attorney Hearn, in opposition to Judge Workman’s order, was that the release of the garnished funds, in addition to being done in accordance with state law, was done before the turnover order was received.

On October 20, 1999, the Trustee filed a Motion, which was subsequently granted, to intervene in the state court proceedings, the purpose of which was to allow the [141]*141Trustee to protect those funds which Judge Workman had ordered be turned over. The Trustee then, after the occurrence of some interim events which included the consolidation of the Creditors’ cases, filed a Notice of Removal to this Court in accordance with 28 U.S.C. § 1452 and Bankruptcy Rule 9027. Thereafter, pursuant to Bankruptcy Rule 7056, the Trustee filed a Motion for Summary Judgment in which he asked' for the following relief:

—An Order directing the turnover of the garnished funds to the Trustee; and
—an Order finding that the garnished funds are property of the estate subject to any exemptions which the Trustee may assert.
—In the alternative, the Trustee seeks an Order directing that the state court turnover any moneys that it may have had in its possession at the time that the Debtors filed their bankruptcy petition.

In support of his requests for relief, the Trustee asserts that the garnished wages turned over by the Debtor’s employer to the Lima Municipal Clerk of Courts constituted property of the Debtors’ bankruptcy estate under 11 U.S.C. § 541(a). On this issue, the Trustee also asserts that the turnover of funds by the Clerk of Courts to Attorney Hearn violated the automatic stay as contained in 11 U.S.C. § 362(a). In addition, the Trustee contends that the funds transferred by the Clerk of Courts was a preference, and thus is avoidable pursuant to 11 U.S.C. § 547(b). On these issues, Attorney Hearn, on behalf of the Van Wert County Hospital, filed a Summary Judgment Motion, asking that it be determined that the garnished funds at issue in this case are solely the property of the Creditor, Van Wert County Hospital, and not property of the Debtors’ bankruptcy estate.

LAW

Section 541 of the Bankruptcy Code provides in pertinent part:

(a) The commencement of a case .. creates an estate. Such an estate is comprised of all the following property, wherever located and by whomever held:
(1) ... [A]ll legal or equitable interests of the debtor in property as of the commencement of the case.

DISCUSSION

Determinations concerning the administration of the debtor’s estate, orders to turn over property of the estate, and other proceedings affecting the liquidation of the assets of the estate are core proceedings pursuant to 28 U.S.C. § 157. Thus, this case is a core proceeding.

The instant case has been brought before the Court upon the Parties’ cross-motions for summary judgment. Under the Federal Rules of Civil Procedure, which are made applicable to this proceeding by Bankruptcy Rule 7056, a party will prevail on a motion for summary judgment when, “[t]he pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56(c). In order to prevail, the movant must demonstrate all elements of the cause of action, but once that burden is established, the opposing party must set forth specific facts showing that there is a genuine issue for trial.R.E Cruise, Inc. v. Bruggeman, 508 F.2d 415, 416 (6th Cir.1975); Anderson v.

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Cite This Page — Counsel Stack

Bluebook (online)
266 B.R. 138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/van-wert-co-hospital-v-french-in-re-cummings-ohnb-2001.