2007 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-27-2007

In Re: Gary Fox

Precedential or Non-Precedential: Non-Precedential

Docket No. 06-4075

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Recommended Citation

"In Re: Gary Fox " (2007). 2007 Decisions. Paper 190.

http://digitalcommons.law.villanova.edu/thirdcircuit_2007/190
 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 06-4075

 

IN RE: GARY J. FOX

 Appellant

GARY J. FOX

 v.

LAURA A. FOX

 

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(D. C. No. 05-cv-02391)

District Judge: Hon. James M. Munley

 

Argued on September 27, 2007

Before: AMBRO, JORDAN and ROTH, Circuit Judges

(Opinion filed : November 27, 2007)

John J. Martin, Esquire

1022 Court Street

Honesdale, PA 18431

Counsel for Appellant

Marshall E. Anders, Esquire
2

Nicholas J. Masington, III, Esquire

Anders & Masington, LLC

18 North Eighth Street

Stroudsburg, PA 18360

Counsel for Appellee

 

O P I N I O N

 

ROTH, Circuit Judge:

This is an appeal from the order of the United States District Court for the Middle

District of Pennsylvania, denying the appeal of Gary Fox (Husband) from the Order of the

United States Bankruptcy Court for the Middle District of Pennsylvania, entering judgement

in favor of Laura A. Fox (Wife) on Husband’s complaint for intentional and willful violation

of the discharge provision of 11 U.S.C. § 524. For the reasons stated below, we will affirm

the order of the District Court. 

I. BACKGROUND

As the facts are well known to the parties, we give only a brief description of the

relevant issues and procedural posture of the case. 

Husband filed for relief under Chapter 7 of the United States Bankruptcy Code on

January 6, 2003. When the bankruptcy petition was filed, a divorce petition was pending in

the Court of Common Pleas. As a part of the divorce proceeding, Wife had moved for

equitable distribution of the marital property. However, a hearing had not yet been held by
3

the state court on the distribution motion. On April 28, 2003, Wife filed a motion for relief

from the automatic stay in bankruptcy in order to allow the divorce action to proceed. On

June 2, 2003, Husband and Wife entered into a stipulation to enable Wife to proceed to

litigate the divorce case. The stipulation was made an order of the District Court on June 3,

2003. 

On June 27, 2003, Husband received his discharge from bankruptcy under 11 U.S.C.

§ 727, discharging him from all debts that arose before the bankruptcy. After this discharge,

Wife continued to assert a claim against Husband in the divorce proceeding for equitable

distribution of the marital property. On August 5, 2004, Husband filed a complaint for

intentional and willful violation of the section 524 discharge provision due to Wife’s

continued efforts to obtain equitable distribution. On October 13, 2005, the Bankruptcy

Court concluded that Wife did not violate the discharge injunction by continuing to pursue

equitable distribution in the state court. Husband appealed. The District Court denied the

appeal on the basis that Wife did not violate the discharge provision of 11 U.S.C. § 524 by

continuing to seek equitable distribution of the marital estate. Husband again appealed. 

II. JURISDICTION & STANDARD OF REVIEW

The District Court had jurisdiction over the bankruptcy appeal pursuant to 28 U.S.C.

§ 158(a)(1). We have jurisdiction under 28 U.S.C. § 1291. 

Bankruptcy Rule 8013 controls our standard of review, and provides that “findings

of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly

erroneous, and due regard shall be given to the opportunity of the Bankruptcy Court, to judge
 1

The enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of

2005 (Pub. L. 109-8, 119 Stat. 54) has resolved this issue for future cases. BAPCPA

amended, inter alia, section 523(a) of the Bankruptcy Code to make non-dischargeable any

debt “to a spouse . . . [or] former spouse . . . 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 . . ..

4

the credibility of the witnesses.” Landon v. Hunt, 877 F.2d 829 (3d Cir. 1992) (citations

omitted). Our standard of review is plenary over any conclusions of law by the bankruptcy

or district courts. Id.

III. DISCUSSION

There is a split of authority within this Circuit’s bankruptcy courts on the issue of

dischargeability in bankruptcy of claims for equitable distribution of marital property.

Compare In re Schorr, 299 B.R. 97 (Bankr. W.D. Pa. 2003) (holding wife’s claim for

equitable distribution was a “debt” discharged in bankruptcy); with In re Scholl, 234 B.R.

636 (Bankr. E.D. Pa. 1999) (holding request for equitable distribution pending at time of

bankruptcy is not a “debt” dischargeable under the Bankruptcy Code). We decline, however,

to resolve this conflict in the instant appeal because we find that the stipulation entered into

by the parties during the bankruptcy proceedings controls the outcome.1

 The stipulation

expressly and specifically gave the parties the right to proceed with the divorce action

pending before the state court, of which the Wife’s claim for equitable distribution was a

part. The stipulation placed no limitation or restriction upon Wife’s right to pursue any part

of the divorce action. We, therefore, conclude that her pursuit of her equitable distribution

claim is covered by the stipulation. Because the parties stipulated to Wife’s ability to pursue
5

the divorce action – of which the claim for equitable distribution was a part – that claim was

not discharged in bankruptcy. As a consequence, Wife did not violate the discharge

provision in pursuing that claim. 

IV. CONCLUSION

For the above reasons, we will affirm the District Court’s order.