Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almb-1_04-ap-01033/USCOURTS-almb-1_04-ap-01033-0/pdf.json

Parties Involved:
Joy Rodgers
Plaintiff
Michael Murry Rodgers
Defendant

Document Text:

1

 Michael Murry Rodgers filed a petition for relief under chapter 7 on January 5, 2004.

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF ALABAMA

In re Case No. 04-10004-DHW

 Chapter 7

MICHAEL MURRY RODGERS,

 Debtor.

JOY RODGERS,

Plaintiff,

v. Adv. Proc. No. 04-01033-DHW

MICHAEL MURRY RODGERS,

Defendant.

MEMORANDUM OPINION

Before the court is Joy Rodgers’s (hereinafter “Joy”) complaint to

determine the dischargeability of her claim against Michael Murry Rodgers

(hereinafter “Michael”).1 Trial was held in Dothan, Alabama on December 15,

2004. C. Matthew Brunson represented the plaintiff, and Michael D. Brock

represented the defendant. 

Jurisdiction

The court’s jurisdiction in this adversary proceeding derives from 28

U.S.C. § 1334 and from the United States District Court for this district’s

general order of reference of title 11 matters to this court. Further, because an

action to determine the dischargeability of a particular debt is a core proceeding

under 28 U.S.C. § 157(b)(2)(I), this court’s jurisdiction extends to the entry of

a final judgment. 

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2

Findings of Fact

Joy and Michael Rodgers were married on June 1, 1989 and lived

together as husband and wife until their separation on January 1, 2002. On that

day Joy left the marital residence, and thereafter, filed a complaint for divorce

in the Circuit Court of Covington County, Alabama. Michael continued to

reside in the couple’s home.

OnMay 3, 2002, the Circuit Court of Covington County, Alabama entered

a Final Judgment of Divorce (Plaintiff’s Exh. 1). The provisions of the divorce

decree that are relevant to this proceeding are summarized as follows:

1. Michael was to pay Joy $536 each month for the support of their two

minor children and to pay one-half of the childrens’ uninsured medical

expenses;

2. Joy was to have possession of the marital home until its sale;

3. The marital home was to be sold. First, Michael was given the right

to purchase the residence by paying Joy for her one-half interest. Michael was

given 10 weeks from the date of the divorce decree to accomplish the purchase

(6 weeks to have the property appraised and four weeks thereafter to close the

sale). However, if Michael did not purchase the residence, the property was to

be offered for sale through a licensed realtor. If sold, the parties were to equally

divide the net proceeds. Finally, if after eight months from the date of the

divorce the property had not been sold, either party could request that the house

be sold by the clerk of the court with the sales proceeds equally divided between

them. Regarding the clerk’s sale the divorce decree provides that such sale 

shall vest all interest either party may hold in the above described

realty in the purchaser thereof, and with respect to said realty, shall

thus serve to convey any reversions, remainders, joint rights,

survivorship rights or other rights of the parties hereto over to the

buyer.

Further, the decree specifically provided that either Joy or Michael could bid on

the property at the clerk’s sale;

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2

 Until just prior to the couple’s separation, Joy was unaware that joint credit card

balances were in excess of $100,000. Joy had charged less than $15,000 of the overall

balances. Michael was able to negotiate with the various credit card lenders to compromise

the indebtedness to $55,000. Joy borrowed $15,000 from her mother to pay toward this debt.

Michael paid the remaining $40,000 compromised balance. 

3

 The Circuit Court’s order was amended on April 16, 2003 (Plaintiff’s Exh. 3). The

amendment, however, merely added the legal description of the marital home. 

3

4. Michael was to pay Joy one-half of his tax refund and was to be solely

responsible for any fines, penalties or interest associated with any taxes owed;

5. Joy was to have possession of a 1997 Chevrolet Blazer, and Michael

was to pay the indebtedness which was secured by that vehicle; and 

6. Joy was given a $15,000 judgment against Michael. This sum

represented monies paid by Joy toward certain credit card indebtedness.2

Following the divorce, although he did not exercise his right under the

divorce decree to purchase Joy’s interest in the house, Michael continued to

reside in the marital home. Michael did not make the payments on Joy’s 1997

Chevrolet Blazer as he was obligated to do under the divorce decree, and the car

was repossessed. Michael did not make the required child support payments;

nor did he pay any money to Joy toward the satisfaction of her $15,000

judgment associated with the credit card indebtedness.

In early 2003, Joy filed a petition for contempt against Michael in the

Circuit Court of Covington County, Alabama. On March 17, 2003, the Circuit

Court entered an order (Plaintiff’s Exh. 2) holding Michael in contempt of court

for violating the divorce decree.3

 The Circuit Court found, inter alia, that

Michael had willfully failed to pay child support, had denied Joy access to the

home, had failed to pay the debt secured by Joy’s vehicle resulting in the

vehicle’s repossession, had failed to pay taxes, had failed to pay to Joy half of

a tax refund, and had failed to pay Joy’s attorney’s fees and court costs. The

Circuit Court determined that Michael’s obligation to Joy under the divorce

decree was $29,345.76 and gave Joy a lien against Michael’s equity in the home

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4

 The $29,345.76 obligation was comprised of the following:

$ 4,773.61 for child support;

 2,400.00 for rent as a result of Michael’s denying Joy access to the home;

 15,000.00 for the judgment associated with the credit card indebtedness;

 804.04 for unpaid joint tax obligations;

 468.11 for tax refund not split with Joy;

 5,000.00 for the value of the vehicle that was repossessed when payments were not

 made;

 900.00 for Joy’s attorney’s fees and court costs.

5

 Among other things, the photos depict rodent-infested furnishings, a dead cow on the

lawn, bathroom fixtures covered with excrement, and appliances packed with spoiled food.

4

to secure the obligation.4

 Further, the Circuit Court ordered the clerk of court

to sell the home. 

After advertising the sale for three consecutive weeks in The Andalusia

Star News, the clerk of court sold the house to the highest bidder on May 21,

2003. Joy Rodgers was the only bidder and purchased the home for $1,000.00.

See Plaintiff’s Exhs. 4A and 4B. The clerk’s sale was ratified and confirmed by

the Circuit Court by order dated July 10, 2003.

Michael moved from the house in June 2003 leaving the property in an

indescribably horrid condition. Photographs depicting the condition of the

house and yard at the time of Michael’s departure make up Joy’s composite

Exhibit 10.5 The court agrees with Joy’s characterization that Michael

“trashed” the place before he left. In addition, Michael removed a metal storage

building from the property prior to his departure.

In August 2003 Michael found himself again facing contempt of court

proceedings in the Circuit Court. He was jailed on August 19, 2003 for failing

to pay child support. See Plaintiff’s Exh. 5. 

Finally, on December 10, 2003, the Circuit Court entered a third order

relating to Joy’s petition to hold Michael in contempt of court. See Plaintiff’s

Exh. 6. The court determined that Michael owed Joy $30,388.73. The total

amount consists of the following items:

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5

$ 4,616.58 for child support;

 15,000.00 for the judgment relating to the credit card debts;

 5,000.00 for the repossessed vehicle;

 1,272.15 for unpaid taxes and unsplit refunds;

 2,400.00 for rent;

 900.00 for attorney’s fees and costs; and

 1,200.00 for the removed metal storage building.

At all prior Circuit Court hearings, Michael had either not appeared or appeared

without legal counsel. Michael was, however, represented by an attorney at the

hearing that preceded the December 10 order. Further, the December 10 order

was a consensual one. The Circuit Court order specifically states that the parties

agree that Michael owes Joy the amounts stated therein.

Michael was scheduled to appear before the Circuit Court on January 6,

2004 for another hearing on Joy’s petition to have him held in contempt of court.

Michael filed his bankruptcy petition on January 5, 2004 the day before the

scheduled hearing. 

In August 2004 Joy, using a realtor, sold the former marital home for

$87,000 and netted $79,000 after deducting the costs of sale. She used $30,000

of these funds to purchase certificates of deposits for her two daughters’ future

educations. She used approximately $16,000 of the sales proceeds to pay off an

encumbrance on her mobile home. She repaid her mother approximately

$12,000 that she had borrowed during her divorce difficulties. Joy gave $7,000

of this money to her church as a tithe, and she bought a 2004 Toyota Camry

automobile.

Michael is employed as the manager of the Farmers Coop in Opp,

Alabama, where he has worked for 17 years. His net earnings from this

employment total $1,801.70 each month. See Defendant’s Exh. 9 and 10. The

Farmers Coop job is a full-time, forty-hour per week job. 

In years past Michael has done custom farm work and welding for others

and by so doing earned extra money. However, he has not done this sort of work

for a number of years and no longer has the equipment to allow him to engage

in these endeavors. 

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6

 Michael’s girlfriend is a part-time beautician whose earnings are meager (less than

$100 per week). 

7

 As these findings show, however, Michael has been far from diligent in making

regular child support payments. 

8

 The § 523(a)(5) claim is composed of $4,616.58 for child support arrearage and the

childrens’ uninsuredmedical costs, $5,000 for the value of the repossessed vehicle, and $2,400

for rent.

9

 The § 523(a)(15) claim is composed of $15,000 for the credit card related judgment,

$1,272.15 for the tax associated matters, $900 for attorney fees, and $1,200 for the removed

storage building. 

6

Michael owns a 1/4 interest in a limited liability company with his

brothers. While he acknowledges that the company has assets worth about

$10,000, he contends that the business is no longer operating and is not a source

of additional income. Michael testified that even when the business was

operating, he never made money from it.

Michael’s average monthly expenses total $1,916 each month. See

Defendant’s Exh. 13. He shares an apartment with his girlfriend, who helps with

the monthly expenses.6

 The court is satisfied that the monthly expenses are

reasonable, if not bare-boned, noting that child support constitutes $536 of the

monthly expenses.

Joy currently works as a nurse at Mizell Memorial Hospital in Opp,

Alabama. In the past she has also worked for a private physician. Joy’s gross

earnings in 2001 were over $30,000. In 2002 she made approximately $28,000.

She earned over $29,000 in 2003, and through October 2004, she has earned

more than $26,000 this calendar year. In addition to earnings from her

employment, Joy should be receiving $536 per month from Michael.7

Contentions of the Parties

Joy contends that her $30,388.73 claim against the defendant is

nondischargeable under 11 U.S.C. § 523(a)(5) and (15). Joy asserts that

$12,016.58 is nondischargeable under § 523(a)(5)

8

 and that the balance of

$18,372.15 is nondischargeable under § 523(a)(15).9

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10 The exact text of the statute provides:

(a) A discharge under section 727, 1141, 1228(a), 1328(b) of this title does not

discharge an individual debtor from any debt— . . . 

(5) to a spouse, former spouse, or child of the debtor, for alimony to,

maintenance for, or support of such spouse or child, in connection with a

separation agreement, divorce decree or other order of a court of record,

determination made in accordance with State or territorial law by a

governmental unit, or property settlement agreement, but not to the extent

that—

(A) such debt is assigned to another entity, voluntarily, by operation of

law, or otherwise (other than debts assigned pursuant to section

408(a)(3) of the Social Security Act, or any such debt which has been

assigned to the Federal Government or to a State or any political

subdivision of such State); or

(B) such debt includes a liability designated as alimony,

maintenance or support unless such liability is actually in the

7

Michael first contends that he owes nothing to Joy. According to

Michael, the clerk’s sale is voidable because the price was below fair market

value. Therefore, he was entitled to 1⁄2 of the equity ($39,500) when Joy netted

$79,000 on the resale of the property. That equity, which Joy kept, is more than

his indebtedness to her; hence she has no lawful claim against him. 

Second, Michael contends that the claim, excepting child support, is in the

nature of a property settlement. Because he lacks the ability to repay this claim,

Michael contends that it is dischargeable under § 523(a)(15)(A).

Conclusions of Law

Debts arising out of a divorce decree and owed to a former spouse are

generally nondischargeable in bankruptcy. Such debts fall into one of two

categories. Those that are in the nature of alimony for the maintenance and

support of the former spouse or dependent child and which have not been

assigned to a third party are nondischargeable without exception. The second

category, those that are in the nature of a property division, are also

nondischargeable, but two exceptions apply. First, if the debtor lacks the ability

to repay the debt, the debt is dischargeable. Secondly, if the debtor can repay

the debt, it may nevertheless be dischargeable if the equities favor the debtor.10

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nature of alimony, maintenance, or support.

. . . 

(15) not of the kind described in paragraph (5) that is incurred by the debtor in the

course of a divorce or separation or in connection with a separation agreement, divorce

decree or other order of a court of record, a determination made in accordance with

State or territorial law by a governmental unit unless—

(A) the debtor does not have the ability to pay such debt from

income or property of the debtor not reasonably necessary to be

expended for the maintenance or support of the debtor or a

dependent of the debtor and, if the debtor is engaged in a

business, for the payment of expenditures necessary for the

continuation, preservation, and operation of such business; or

(B) discharging such debt would result in a benefit to the debtor

that outweighs the detrimental consequences to a spouse,

former spouse, or child of the debtor. 

11 Michael cites to cases supporting his argument that a sale may be set aside if the

purchase price shocks the conscience of the court. However, the issue is not whether Michael

could have set the sale aside in state court had he acted in a timely fashion utilizing the proper

state court procedures. 

8

Michael first contends that he owes no debt to Joy because she kept his

portion of the equity from the $79,000 sale. Michael contends that he is entitled

to one-half of the equity because the clerk’s sale was invalid.11

However, the argument constitutes a collateral attack on the state court

order confirming the clerk’s sale. Michael declined to exercise his right to

purchase Joy’s interest in the property, declined to sell the property through a

realtor, declined to bid on the property at the clerk’s sale, declined to object to

the clerk’s report of sale, and declined to appeal the order confirming the sale.

Michael cannot now set aside the state court order in this court. See Powell v.

Powell, 80 F.3d 464 (11th Cir. 1996). 

The Supreme Court of Alabama has refused to disturb a sale consummated

and ratified by a lower court where the objection raised on appeal was not first

asserted to the lower court. See Steele v. Bibb, 519 So.2d 1334 (Ala. 1988)

(appellant asserted that the lower court confirmed the sale without giving him

adequate notice and opportunity to present evidence that the sale prices of the

two lots were below fair market value). In the case at bar, Michael neither

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objected to the clerk’s report of sale nor appealed the order confirming the sale.

In addition, Michael has not asserted any grounds under the Bankruptcy

Code which would allow Michael to set aside the order confirming the sale.

Michael secondly contends that he is unable to repay the $18,372.15

portion of the indebtedness representing the division of property. The court

agrees. Michael’s average monthly expenses exceed his average monthly

income. Subtracting the monthly $536 child support expense, Michael’s

monthly expenses total only $1,380. The court finds that this amount is

reasonably necessary for his own maintenance and support. Even if Michael

were able to squeeze $100 per month from his already dry finances, it would

take him over 15 years to repay the amount owed. The court concludes that

Michael does not have the ability to repay the property settlement obligation,

and the obligation is dischargeable under 11 U.S.C. § 523(a)(15)(A).

However, the obligation for past due support is not dischargeable under

11 U.S.C. § 523(a)(5). Joy classifies the following components of the state court

judgment as support: $4,616.58 for child support arrearage and the childrens’

uninsured medical costs, $5,000 for the value of the repossessed vehicle, and

$2,400 for rent. The court agrees.

All three components are actually in the “nature of support.” See 11

U.S.C. § 523(a)(5). The rent cost was incurred by Joy because Michael

excluded her from rightful possession of the former marital residence. Because

Michael failed to make the payments on the 1997 Chevrolet Blazer, the vehicle

was repossessed, depriving Joy of rightful transportation. The child support

arrearage and medical claims are clearly in the nature of support. Therefore, the

debt for these three items is not dischargeable.

An order conforming to this memorandum opinion will enter separately.

Done this 25 day of January, 2005.

/s/ Dwight H. Williams, Jr.

United States Bankruptcy Judge

c: Charles Matthew Brunson, Attorney for Plaintiff

 Michael D. Brock, Attorney for Defendant/Debtor

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