Wisconsin v. Schauer (In Re Schauer)

391 B.R. 430, 60 Collier Bankr. Cas. 2d 99, 2008 Bankr. LEXIS 1869, 2008 WL 2437530
CourtUnited States Bankruptcy Court, E.D. Wisconsin
DecidedJune 13, 2008
Docket19-21573
StatusPublished
Cited by6 cases

This text of 391 B.R. 430 (Wisconsin v. Schauer (In Re Schauer)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wisconsin v. Schauer (In Re Schauer), 391 B.R. 430, 60 Collier Bankr. Cas. 2d 99, 2008 Bankr. LEXIS 1869, 2008 WL 2437530 (Wis. 2008).

Opinion

MEMORANDUM DECISION ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

MARGARET DEE McGARITY, Chief Judge.

The plaintiff, State of Wisconsin, filed an adversary proceeding under 11 U.S.C. § 523(a)(5) seeking a determination that an obligation owed by the defendant, Stephanie Schauer, is excepted from the debt- or’s discharge. The plaintiff moved for summary judgment on the grounds that, as a matter of law, child care overpay-ments are domestic support obligations within the meaning of 11 U.S.C. § 101(14A) and thus nondischargeable pursuant to 11 U.S.C. § 523(a)(5). The pro se defendant filed an answer to the complaint; however, she has not filed a response to the motion for summary judgment.

This is a core proceeding under 28 U.S.C. § 157(b)(2)(I), and the court has jurisdiction under 28 U.S.C. § 1334. The following constitutes the court’s findings of facts and conclusions of law pursuant to Fed. R. Bankr.P. 7052. For the reasons stated below, the plaintiffs motion is granted.

BACKGROUND

The State of Wisconsin, through its Wisconsin Department of Workforce Development, contracts with the County Human Services’ Departments to administer the Wisconsin Works (W2) Child Care Subsidy program. , See Wis. Stat. § 49.155. The child care program provides a subsidy to low-income families who require child care to obtain or retain employment. When the debtor applied for child care assistance, and in subsequent reviews, she was advised orally and in writing, that she had to report any changes in income within 10 days.

According to the plaintiff, the defendant failed to report all of her income which, when considered, made her ineligible for the state’s child care program. Under section 49.195(3), Wis. Stat., the state is entitled to recover the overpayment upon notice to the program participant, and this notice was provided to the defendant.

Through the Outagamie County Department of Health and Human Services, the plaintiff calculated the overpayments. 1 The gross income limit for child care benefits for a household of two during the relevant period, July 2006 through December 2006, was $2,200.00 per month. (Laura Schroeder, Outagamie County Health and Human Services, Economic Support Specialist, Affidavit ¶¶ 3, 4). The plaintiff determined the debtor was not eligible for *432 child care payments during the months of July, August, September and December 2006 because her total gross monthly income exceeded the gross monthly income limit for eligibility of $2,200.00 (Schroeder Affidavit ¶ 5). During those months, the county had paid the debtor $535.00 in July 2006, $321.00 in August 2006, $428.00 in September 2006, and $485.00 in December 2006. (Schroeder Affidavit ¶ 6). The plaintiff additionally determined that the debtor was only partially eligible for child care benefits during the months of October and November 2006 because her gross monthly income was less than $2,200.00, but greater than the amount originally budgeted for child care benefits. (Schroeder Affidavit ¶ 7). Because of this, the debtor was paid $535.00 in October 2006 and $428.00 in November 2006, when she was eligible to receive only $490.00 and $392.00, respectively. The debtor received child care overpayments totaling $1,850.00 from July 2006 through December 2006. The debtor has not challenged these calculations.

ARGUMENTS

The plaintiff contends the Code’s definition of “domestic support obligation” is clear and includes the debtor’s obligation to repay the state for her child’s care. This is a debt owed to or recoverable by a governmental unit; in the nature of support of her child provided by a governmental unit; established in accordance with applicable non-bankruptcy law by a governmental unit; and is not assigned to a non-governmental entity. See 11 U.S.C. § 101(14A). Thus, it meets the definition of a “domestic support obligation,” which in turn is excepted from discharge under 11 U.S.C. § 523(a)(5). While the obligation may not have been excepted from discharge under the Code previous to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, see, e.g., In re Platter, 140 F.3d 676, 677 (7th Cir.1998), the BAPCPA explicitly included, in the definition of a domestic support obligation, debts in the nature of support, owed directly to or recoverable by a governmental unit.

In the defendant’s answer to the complaint, she stated she was unaware holiday bonuses were considered an increase in salary. She also noted that $60.00 per week was deducted from her paycheck for health care costs. According to her tax return, the debtor’s adjusted gross income for tax year 2006 was $23,958, which is less than the gross income limit for the child care assistance program.

DISCUSSION

Summary judgment is appropriate if “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “All facts and reasonable inferences must be construed in the light most favorable to ... the non-moving party.” Mannoia v. Farrow, 476 F.3d 453, 457 (7th Cir.2007).

A party may succeed on summary judgment by showing that the undisputed facts entitle the movant to judgment as a matter of law, see Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970), or by showing that there is an absence of evidence to support the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

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Bluebook (online)
391 B.R. 430, 60 Collier Bankr. Cas. 2d 99, 2008 Bankr. LEXIS 1869, 2008 WL 2437530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wisconsin-v-schauer-in-re-schauer-wieb-2008.