Source: http://www2.kyeb.uscourts.gov/opin/leeopin/Minix,%20Stephen%2090-7244%204-6-94.html
Timestamp: 2019-04-26 12:38:20+00:00

Document:
WILLIAM G. FRANCIS, WILLIAM S.
MITCHELL D. KINNER, JOHN T.
This matter is before the court on cross-motions for partial summary judgment on the question of whether certain defenses asserted by the defendants in the above-styled adversary proceeding should be stricken. Also before the court is a motion of the law firm of Francis, Kazee and Francis in the above-styled bankruptcy case to annul the automatic stay.
The debtor alleges in this adversary proceeding that the defendants, the debtor's former spouse, her attorney and the law partners of her attorney, violated the automatic stay, 11 U.S.C. § 362, by continuing with a marriage dissolution proceeding between the debtor and his former spouse in Johnson Circuit Court after bankruptcy intervened. The defendants have asserted as defenses that the allegations in the complaint are barred by the doctrines of estoppel, waiver and laches, and that the actions taken by the defendants in state court after the intervention of bankruptcy were "induced by Plaintiff's actions himself and/or the actions of his counsel of record and/or done pursuant to lawful Order of the Johnson Circuit Court." Plaintiff has filed a motion for partial summary judgment striking these defenses. Defendants have filed in this adversary proceeding a cross-motion for summary judgment and in the main bankruptcy case a motion to annul the automatic stay. It is in this context that we review the records of the marriage dissolution action in Johnson Circuit Court, the bankruptcy case of the debtor and adversary proceedings related thereto.
M. Stephen Minix and Sherry Minix were married in January of 1982 and separated in May of 1987. The Johnson Circuit Court entered a decree of dissolution on February 1, 1988 terminating the marriage, but reserved ruling on issues of property division, child custody and visitation, child support, and maintenance, referring those matters to the domestic relations commissioner.
M. Stephen Minix filed a petition for relief under chapter 7, title 11 United States Code, on May 4, 1988.
On or about July 15, 1988, debtor, the petitioner in the Johnson Circuit Court marriage dissolution proceeding, filed a motion in the Johnson Circuit Court which stated: "Comes the Petitioner, by Counsel, and moves the Court to submit the above-styled case for final trial and judgment on all issues." On or about July 25, 1988, Sherry Minix, the respondent in the Johnson Circuit Court marriage dissolution proceeding, filed an objection to the motion to submit, arguing the bankruptcy of the petitioner stays the state court action with respect to any division of marital property or allocation of marital debts, and suggesting the state court proceed only with a determination of child custody, child support and maintenance.
On August 23, 1988, the Johnson Circuit Court entered an order which established custody and visitation rights of the parties and provided: "All other issues as to property disposition and child support should be reserved pending the disposition of the bankruptcy action filed by the Petitioner."
On November 11, 1988, the Johnson Circuit Court entered an order which provided respondent shall receive $1,100 per month as child support and shall continue to receive $600 per month as maintenance.
At the Status Conference held by the Honorable S.N. Frazier, Circuit Judge, at 11:00 a.m. on Friday, January 27, 1989 the Court ordered that the parties submit Memorandums [sic] of authority to the Court by February 2, 1989 with reference to the question of whether or not the Court can go ahead and decide this case on the financial as well as the other issues, (the one of temporary and permanent custody), irrespective of the fact that the Petitioner is in bankruptcy.
This is an attempt to do this although the writer of this instrument wants to make it known to the Court that he is not the Attorney for the Petitioner in the bankruptcy proceedings nor does he consider himself a bankruptcy lawyer. However, he is reliably informed that the bankruptcy is for all practical purposes almost complete with the exception of one (1) question to be determined by the bankruptcy Judge, and that is whether or not a second mortgage on the Davis Branch residence of Mr. Minix was and is a preferential treatment of creditors. . . . This was property that Mr. Minix owned long before his marriage and is not by any stretch of the imagination marital property. Whether the bankruptcy Court will make a determination that that was a preferential matter with reference to Citizens National Bank or not I do not know. It would appear that that is the only question for the bankruptcy Court to make and would have nothing to do with a determination of property rights in the domestic relations case, because 1) the Davis Branch property is not marital property; and 2) the indebtedness is still indebtedness against the bankruptcy estate including the equipment that was already mortgaged to the Citizens Bank, Paintsville; 3) there was no mortgages [sic] on the house when they married; 4) the wife signed a statement waiving any interest in the house.
It would appear to the undersigned that the Respondent is simply a common creditor for anything the Court might award her, and have [sic] to share with the other creditors in the estate.
It would therefore appear that the Court should make findings of fact with reference to the financial issue for the reasons aforementioned, at this time.
Pursuant to the Status Conference held Friday, January 27, 1989 by the Hon. Stephen N. Frazier, Johnson Circuit Judge, the parties are to submit Memoranda of Authority to the Court by February 2, 1989 with reference to the question of whether the Court can decide the disposition of property irrespective of the fact that the Petitioner is in bankruptcy. . . .
Because the economic circumstances of each party is not known at this time, it would be unfair to make a division [of property] as is clearly indicated by (d) [of KRS 403.190].
[In] Brandenburg v. Brandenburg, Ky. App., 617 S.W.2d 871 (1981), . . . a case clearly applicable to the case at bar, the Court adopted a formula to determine the equity of each party in the marriage between marital and non-marital property. . . . Using this Brandenburg formula, which is the current state of law in Kentucky, it would appear that the Respondent does have an interest in the marital home pending the outcome of the Bankruptcy disposition of assets.
Therefore, a disposition of property at this time would be improper.
Response (filed by respondent), February 20, 1989.
On July 21, 1989, the Johnson Circuit Court entered an order requiring all proof in the case to be completed and filed with the court by August 11, 1989.
On September 12, 1989, petitioner filed what is styled on the docket as "Motion to finally submit the case and motion to hold the respondent in contempt and motion for full custody."
The Respondent agrees that the marital residence is a matter which has been dealt with by the bankruptcy court and, in fact, has attempted to take that same position before the circuit court. However, the Court has ordered that everything be completed and submitted for final decision by a certain date and in order to do that a property disposition must be made. The Respondent is in agreement that the issue as to the property can be reserved until sold by the bankruptcy court, at which time the fair market value of the property would have been determined. However, the Petitioner is incorrect that the Respondent has conducted herself as a creditor and, in fact, was not identified as a creditor in the bankruptcy court and therefore cannot be discharged by that court.
It is nonsense for both attorneys for the Petitioner to keep contending that the home is a non-marital asset. Clearly, it has been established that substantial improvement were made on the home since the date of the marriage.
The Respondent would submit that the Court can continue with a division of marital property, which would include requiring an appraisal of the business of Minix Optical which has previously been attempted and denied by the Petitioner and now having receiving [sic] a Court Order requiring him to do so again file [sic] a motion asking that that Order be set aside. . . .
Response to Petitioner's Motion, September 28, 1989.
On December 15, 1989, the Johnson Circuit Court overruled petitioner's motion to reconsider the September 7 order.
On February 15, 1990, the Johnson Circuit Court Domestic Relations Commissioner rendered recommended findings of fact and conclusions of law and decree which were adopted by the Johnson Circuit Court by order entered May 18, 1990. Following is a summary of pertinent provisions of the Johnson Circuit Court's findings of fact and conclusions of law.
Minix owned real property and improvements thereon located on Davis Branch in Johnson County at the time of his marriage to Sherry Minix. The property is adjacent to the Paintsville Country Club and Golf Course. After the marriage and before the separation the parties constructed an addition to the home and made other improvements to the house. In addition, a garage-type structure was constructed for the purpose of renting storage spaces for golf carts.
During the marriage the parties executed two notes at different times in favor of Family Federal Savings and Loan secured by two mortgages totaling $85,000. At the time of the hearing before the Johnson Circuit Court Domestic Relations Commissioner the unpaid balance of the first mortgage was $45,304.54 and the unpaid balance of the second mortgage was $28,337.98. The amount of marital equity in the home arising from reduction of the indebtedness on the property during the marriage was found to be $11,357.48. After the parties separated the petitioner executed a note payable to Citizens National Bank secured by a third mortgage on the residence.
The fair market value of the real property and improvements thereon, excluding the golf cart storage garage, was $115,000 at the time of the marriage. The real estate was found to be non-marital property of the petitioner. The fair market value of the property at the time of the separation was $150,000. The value of the golf cart storage garage (not including the land) was $20,000. The marital equity arising from improvements to the property was determined to be $55,000. The Johnson Circuit Court fixed the total marital equity at $66,357.48.
The furniture was divided by and between the parties.
The parties purchased certain items of musical equipment during the marriage which remained in the possession of the petitioner after the marriage was dissolved including a baby grand piano which was purchased for $8,900.
The marital equity in the business of petitioner was found to be $30,000.
Before makding [sic] a just proporition [sic] division of the property, the Court must make a determination on the two issues resulting from the bankruptcy. The first is whether or not the bankruptcy discharges Respondent's marital interest therein. The Court does not believe that it does. There is some confusion in the record whether Respondent participated as a creditor in that litigation. At the hearing in front of Judge Frazier, her lawyers imply that that was her intention. However, in the hearing held before the Commissioner which becan [sic] January 18, 1990, any participation was denied. Regardless, the Court believes that a marital interest upon divorce is not the same as being a creditor. Even though Respondent's name is not on the deed or bill of sale, any sale thereof would still necessarily be subject to her rights under any pending litigation. Respondent's dower rights may have terminated with entry of the decree on February 1, 1988, but her interests in the property, if any, were specifically reserved and not subject to dismissal by bankruptcy litigation, unless she was made a party to an adversary proceeding.
The second issue for determination is whether this Court might hold a marital division in abeyance pending a decision on the bankruptcy litigation. There has been no evidence introduced by Petitioner as to what actually will take place, if anything, in that bankruptcy action. Accordingly, the Court should enter its award herein.
Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 16-17.
Petitioner was ordered to pay as child support the sum of $550 per child per month until each child reaches the age of 18. In addition, Petitioner was to be responsible for all medical and dental bills of the children, to be paid either by maintaining health insurance, making direct payments, or a combination thereof.
All furniture and vehicles were either divided by the parties or repossessed and no longer in the possession of the parties.
The respondent was awarded the baby grand piano and petitioner was awarded all other musical equipment.
However, at the exclusive option of Petitioner, he may pay Respondent $5,000.00 in lieu of transferring the Grand Piano to Respondent. He must pay that $5,000.00 or surrender that Baby Grand Piano to Respondent within 30 days of the date of the Final Decree. If he does not elect to pay that $5,000.00 within 30 days of the Decree and does not surrender the Grand Piano as Ordered herein, the Johnson County Sheriff is Ordered to assist Respondent in the recovery of that piano. If the piano is surrendered, voluntarily or involuntarily, Respondent shall arrange for the pick up of the piano at Petitioner's residence.
Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 20.
In regard to the marital equity in the real estate and the marital equity in Minix Optical, the Court under the Findings has determined that amount to be $96,357.48. It is Ordered and Adjudged that Petitioner and Respondent should each be entitled to one-half (1/2) of the value of that equity. As Petitioner's non-marital interest in the real property and business is so extensive, it would not be equitable to force a sale in order to allocate the marital interest.
It is Ordered and Adjudged that Petitioner is entitled to an offset and credit of $3,903.00 by reason of a deficiency caused when Respondent allowed a Ford Taurus automobile to be repossessed, causing the above debt to be owed by Petitioner.
Accordingly, all interest in the marital home on Davis Branch and all interest in Minix Optical or related businesses is awarded to Petitioner herein. Petitioner shall pay to Respondent, as her interest in the marital equity, the sum of $44,275.74 ($48,178.74 minus $3,903.00), to be paid in ten (10) yearly installments of $4,427.57 each, beginning June 1, 1990.
This money shall be paid without interest. However, the amount owed is otherwise reduced to Judgment herein and Respondent shall have a lien on the real property on Davis Branch and the equipment of Minix Optical to secure payment thereof. Respondent may file a Notice of Judgment Lien, such as permitted by law, in the County Court Clerk's Office of both Johnson and Floyd Counties.
Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 20-21.
has been adjusted in anticipation of Respondent receiving her marital interest in accordance with the maintenance statute. However, if Respondent does not receive all her marital interest apportioned to her, as Ordered above, either because Petitioner does not pay it, because of the bankruptcy, or because the amounts to be paid are subsequently reduced on appeal, the amount of maintenance ordered herein is inadequate.
In such event, Respondent may move the Court for a maintenance increase in amount and duration, which award will take into account the fact that her economic situation had worsened by virtue of her diminished marital estate.
Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 21-22.
Petitioner was ordered to "pay all marital debts to the extent any exists [sic] following their discharge in bankruptcy." Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 24.
Petitioner was awarded "all monies owned by the Parties at the time of separation, whether held in cash; checking; savings; or business checking, savings, or investment accounts." Recommended Supplemental Findings of Fact, Conclusions of Law, and Decree of the Johnson Circuit Court Domestic Relations Commissioner, February 15, 1990, at 24.
By order dated May 18, 1990 the Johnson Circuit Court adopted the recommended findings of fact, conclusions of law and decree of the domestic relations commissioner.
The petitioner, MARCUS MINIX, shall have fifteen (15) days from the date of this Order to file appropriate motions before the Bankruptcy Court to stay further action against him by the Circuit Court and determine all issues, including those set forth above, relative to the awards made by the Court unto the respondent. Failure by the petitioner to so proceed shall be deemed by this Court sufficient reason for respondent to proceed with her motion of contempt.
Counsel for petitioner and respondent shall, in writing, report to the Court the status of the motion seeking resolution of the questions by September 7, 1990, which shall be filed of record in this case.
Opinion, Findings of Fact and Order of the Johnson Circuit Court, August 7, 1990.
On September 14, 1990, Sherry Minix filed in the office of the Johnson County Court Clerk a notice of judgment lien in the amount of $44,275.74.
Thereafter the battle between the parties over child custody, visitation and support continued, as reflected in the docket of the Johnson Circuit Court action.
The debtor filed his bankruptcy petition on May 4, 1988. Sherry Minix was not scheduled as a creditor. C. V. Reynolds c/o Francis, Kazee and Francis was scheduled as an unsecured creditor with a liquidated and undisputed debt of $1,000.
On August 17, 1988, an order was entered in the bankruptcy case authorizing the debtor to reject an unexpired lease of a 1987 Mercedes-Benz 260E and to surrender the vehicle to Mercedes-Benz Credit Corporation. On August 26, 1988, Sherry Minix filed a motion asking this court to set aside the order on the grounds the Johnson Circuit Court had awarded use of the Mercedes-Benz to her and required the debtor to maintain payments on the vehicle. The court overruled the motion of Sherry Minix.
The debtor was granted a discharge on March 2, 1989.
On August 7, 1990 Sherry Minix filed a proof of claim asserting a secured claim in the amount of $44,275.74. C. V. Reynolds on behalf of the law firm Francis, Kazee and Francis filed a proof of claim on September 24, 1990 asserting an unsecured claim in the amount of $3,172.75 and a proof of claim on June 27, 1991 asserting an unsecured claim in the amount of $2,976.00.
On September 4, 1990, J. James Rogan, the bankruptcy trustee, sent a letter to C. V. Reynolds, counsel for Sherry Minix, in which he stated: "At this point I am going to let the Circuit Court Decree stand as the Circuit Judge in essence made a determination of percent of equity."
On October 12, 1990, Sherry Minix filed in this court a motion for relief from the automatic stay to enforce the judgment of the Johnson Circuit Court in her favor with respect to maintenance, possession of the baby grand piano, and the property settlement issues adjudicated by the state court. On December 24, 1990, Family Federal Savings and Loan Association, which held a valid first mortgage lien on the residential real estate of the debtor, filed a motion requesting the court to direct the trustee to sell the residence of the debtor or in the alternative to grant Family Federal relief from stay to enforce its mortgage. By order entered February 4, 1991, the motions of Sherry Minix and Family Federal were overruled, and the bankruptcy trustee was ordered to sell the residence of the debtor within 60 days with net sales proceeds to be distributed to Family Federal, and with any excess proceeds to be held in escrow pending further orders of the court in adversary proceeding number 89-0012.
On April 8, 1991, the trustee reported that the property was sold to Family Federal for $91,000.
On March 13, 1991, the debtor filed an amendment to his schedules to include in addition to household furnishings previously scheduled in the amount of $1,300 a Kawai Baby Grand Piano valued by the debtor at $3,000. Sherry Minix objected to the amendment on the grounds the piano was awarded to her in the divorce action. The trustee objected to any exemption claimed by the debtor in musical instruments and the piano. After hearing the objections, the court entered an order on August 7, 1991 which provided that orders of the Johnson Circuit Court respecting a division of marital property which were entered after the intervention of bankruptcy while the automatic stay remained in effect are void. The court ruled Sherry Minix does not have a claim to the piano based on state court orders.
On July 15, 1991, the trustee filed a notice of intent to sell the piano to Sherry Minix for $1,000. The debtor objected, after which the trustee was ordered to sell the piano upon receipt of the highest bid from Mary Minix, the debtor's current spouse, or from Sherry Minix. On May 11, 1992, the court approved the sale of the piano to Mary Minix for $2,000. Paul Brown, the purchaser of the former residence of the debtor, had possession of the piano and refused to relinquish possession until such time as storage and moving costs were paid. The trustee commenced an adversary proceeding, number 92-7018, by filing a complaint against Paul Brown requesting a turnover of the piano, and against Sherry Minix and the Internal Revenue Service requesting that they assert their interests in the piano. Sherry Minix did not file an answer to the complaint. Paul Brown was ordered to turn over possession of the piano to the trustee, and the adversary proceeding was dismissed.
On November 15, 1991, The First National Bank of Paintsville filed a complaint, adversary no. 91-7173, objecting to the discharge of the debtor. The bank alleged that in 1986 the debtor executed a mortgage in favor of the bank encumbering certain real property and improvements thereon in which debtor conducted his optometry business. When the debtor filed his bankruptcy petition the bank discovered title to the mortgaged property was in the name of Marcus Minix Land Development Corporation, a corporation of which the debtor was the sole shareholder. The dispute was resolved when the bank purchased for the sum of $3,000 the estate's interest in the business real estate on which the bank held a mortgage and the common stock of Marcus Minix Land Development Corporation. The court approved the sale on February 21, 1992.
On January 27, 1992, the trustee filed a notice of abandonment of property of the estate evidencing the trustee's intention to relinquish the estate's interest in optical inventory, optical equipment, office equipment, and a computer as being overencumbered, and in other property which the trustee determined was valueless to the estate or was claimed exempt by the debtor.
On September 17, 1992, the debtor amended his schedules to list various items of personal property having a stated value of $27,174.00 that are in the possession of Sherry Minix. The trustee abandoned the estate's interest in these items of personal property.
This adversary proceeding was commenced by the trustee on January 17, 1989 to avoid as preferential the mortgage of Citizens National Bank of Pikeville, Kentucky in the amount of $48,087.23 on the residence of the debtor and to obtain an order authorizing the trustee to sell the property free and clear of the mortgage liens of Family Federal Savings and Loan Association and the interests of the defendant debtor in the property. Sherry Minix initially was not named as a defendant in this adversary proceeding. The debtor listed the residential property in his schedules as having a value of $90,000 and maintained in pleadings that the property was worth that amount. By its answer Family Federal asserted a first mortgage on which there was a balance due of $48,265.75, plus interest, and a second mortgage on which there was a balance due of $30,944.20, plus interest.
On August 24, 1990, judgment was entered which determined that: (1) the mortgage dated November 16, 1987, given by the debtor in favor of Citizens National Bank should be avoided as a preference and preserved for the benefit of the estate; and (2) Family Federal Savings and Loan Association held valid first and second mortgages against the property. The trustee was directed to join in the action Sherry Minix in order that she may assert any claim she may have against the proceeds of the sale of the property. The trustee was directed to sell the property and upon such sale to apply to the court for an order allowing him to pay the mortgage liens of Family Federal. Any funds remaining after payment of the mortgage to Family Federal were to be held in escrow pending further orders of the court.
On September 5, 1990, the trustee filed an amended complaint naming Sherry Minix as a defendant. By answer filed September 14, 1990, Sherry Minix asserted an interest in one-half of any equity in the property. Family Federal bid the amount of its liens against the property and paid to the trustee an amount sufficient to cover the costs of sale and certain administrative expenses. There were no funds remaining after the sale to which Sherry Minix' interest could attach.
The debtor is seeking to assert a claim against Family Federal for recovery of monies paid postpetition by the debtor to Family Federal. The debtor has taken an appeal from the court's orders of April 3, 1992 and July 31, 1992 which effectively barred him from asserting such a claim.
On July 19, 1990, plaintiff, by counsel, commenced this adversary proceeding by filing a complaint which named as defendants Stephen N. Frazier, Johnson Circuit Court Judge; C. V. Reynolds, counsel representing Sherry Minix in the Johnson Circuit Court action; and Sherry Minix.
On August 2, 1990, before a responsive pleading was served, plaintiff, as a matter of course pursuant to Federal Rule of Bankruptcy Procedure 7015, amended his complaint to dismiss Judge Frazier as a defendant and to dismiss Count III of the complaint. The first amended complaint in all other respects is virtually identical to the complaint filed on July 19, 1990.
Count one of the first amended complaint seeks a determination that the defendants are barred from collecting debts owed to them by the debtor. Count two of the complaint alleges the defendants have violated the automatic stay by "conduct[ing] proceedings for the purpose of forcing Debtor to pay money to the Defendant, Sherry Minix. . . ." The complaint requests that the defendants be ordered to appear and show cause why they should not be held in contempt for violating the automatic stay and other orders of the bankruptcy court; that defendants C. V. Reynolds and Sherry Minix "be ordered to submit to the jurisdiction of this Court pertaining any question which relates to them and the Debtor herein, concerning common debts, or debts arising out of sources other than maintenance or child support"; that the defendants be enjoined from taking further action to enforce provisions of the Decree of the Johnson Circuit Court other than with respect to child support or maintenance issues; and that plaintiff be awarded attorneys' fees, costs and damages against defendants C. V. Reynolds and Sherry Minix.
On September 3, 1991 an order was entered permitting C. V. Reynolds and the law firm of Francis, Kazee and Francis to withdraw as counsel for Sherry Minix.
After obtaining the requisite court approval, plaintiff filed, on October 16, 1991, a second amended complaint to add as a party the employer of defendant C. V. Reynolds, the law firm of Francis, Kazee and Francis, and to assert against the firm the allegation that the firm as employer is vicariously liable for the actions and omissions of defendant Reynolds. By agreed order dated December 18, 1991, the complaint and the caption were amended to identify as defendants the individual partners of the law firm of Francis, Kazee and Francis ["the Francis, Kazee and Francis defendants"].
The answer filed by the Francis, Kazee and Francis defendants includes as defenses that the claims asserted in the complaint are barred by the doctrines of estoppel, waiver and laches; that the actions taken by the defendants in the state court action after bankruptcy intervened were "induced by Plaintiff's actions himself and/or the actions of his counsel of record and/or done pursuant to lawful Order of the Johnson Circuit Court"; that the actions of the defendants caused no damages to plaintiff and were not "willful" as required by 11 U.S.C. § 362(h); that any injury or damages suffered by plaintiff were caused by and resulted from his own actions or inaction or the actions or inaction of his counsel; and that no actions taken by defendants after the date on which debtor received his discharge relating to custody, child support and maintenance violated the automatic stay.
On August 31, 1992, plaintiff filed a motion for partial summary judgment striking the third and fourth defenses set forth in the answer of the Francis, Kazee and Francis defendants, to wit: that the claims asserted in the complaint are barred by the doctrines of estoppel, waiver and laches, and that the actions taken by the defendants in the state court action after the intervention of bankruptcy were "induced by Plaintiff's actions himself and/or the actions of his counsel of record and/or done pursuant to lawful Order of the Johnson Circuit Court."
1. To validate a certain decree entered in a dissolution of marriage action between the Debtor and Sherry Minix, styled Minix v. Minix, Civil Action No. 86-CI-010, in the Johnson Circuit Court. The action was commenced by the Debtor in January, 1986, prior to the filing of the bankruptcy petition herein on May 4, 1988. The final decree was entered in the Johnson Circuit Court on May 18, 1990.
2. To allow the parties to litigate, as necessary, all issues which may arise regarding issues of maintenance, child support and custody, presuming the validity of the final decree on May 18, 1990, which decree was affirmed (on those issues) by the Kentucky Court of Appeals and is now final.
3. To allow the findings in the decree as to Sherry Minix's interests in the parties' marital property establish her claim to the Debtor's estate, subject to all further Orders of this Court.
The cross-motions for summary judgment and the motion to annul the stay were heard September 16, 1992.
In support of its motions the Francis, Kazee and Francis defendants rely in part on the deposition testimony of the plaintiff debtor.
Q.162	Did you or Mr. Perry ever take the position that Judge Knight or any of his successors could not address custody and visitation of the children because of the bankruptcy?
Q.163	Never did? And you don't today, either, do you?
A.	Not stayed by the bankruptcy court.
Q.164	It's your position that custody and visitation is not stayed by the bankruptcy court?
Q.165	And you litigated that issue in the Johnson Circuit Court and so did Sherry, right?
A.	We tried to bring the proceeding to an end by a motion in July of 1988 because all of the discovery had been completed and entered into the record, there were 20 depositions of 16 witnesses, there were tax returns stipulated, and evidence was completed, so we asked the case be ended at that time.
Q.166	So the answer to my question, that is, you litigated that issue and so did Sherry is yes, isn't it?
MR. ROSENBAUM: To custody and visitation?
Q.167	Now, you referred to a July 15, 1988 motion. Is that the motion of your lawyer to submit for trial on all issues?
A.	That's correct, because discovery had been completed and entered into the record.
Q.171	Okay. Was it your position in the case, you and your lawyer's position, the case was ready for trial on the merits, for a decision?
A.	I believe it was our position it was ready for a summary final judgment. No facts were disputed.
Q.172	Since there are no summary judgments in divorce cases that I know of, you mean, it was ready for a decision, don't you?
A.	It was ready for a decision.
Deposition of M. Stephen Minix, June 8, 1992, filed July 23, 1992, at 36-38.
Q.318	So it is your testimony you did not file the bankruptcy proceeding to attempt to harm your wife in the divorce proceeding in any way?
A.	No, it was to help all of us sustain ourselves and to -- if they would have lifted the stay and awarded her all kinds of property, that would have been fine. But it didn't happen that way. There never was property and there still isn't property.
Q.319	Mr. Minix, are you telling us under oath that if Sherry Minix or her lawyers had filed a motion to lift the stay after May 4, 1988, that you would have been agreeable to that?
A.	Why not? It would have stopped all this.
Q.320	Would you have been agreeable to that?
A.	Yes, but they failed to do that.
Q.321	But had they done that, you would have not objected?
A.	I would have no standing.
Q.322	Just answer my question. You would not have objected?
A.	I did. I would have no standing to object.
Q.323	All right. You would have no standing to object, and you would not have objected?
A.	No. How could I?
Q.324 And the reason you would not have objected, if I understand it, is that you would have been very happy for the divorce proceeding to continue on and you be relieved of your other debts?
A.	I was just trying to be relieved of my other debts. I had no idea it would affect property, wasn't of the concern.
Q.325	And you were not using the divorce proceeding to try to deny your wife her marital assets whatever they were?
A.	How could I have even known that until it developed, because if they had lifted the stay, she would have gotten a property settlement?
Q.326	My question is your motivation. You did not, in any way, file this bankruptcy in part to attempt to deny your wife, your ex-wife at that time, her property settlement or her property rights or whatever rights she had in that property?
Q.327	And so if she had procedurally filed the motion, you would have gone along with it?
Deposition of M. Stephen Minix, June 8, 1992, filed July 23, 1992, at 82-84.
MR. BARKER: And he's also testified that had Sherry Minix filed a motion for relief from the stay, he wouldn't have opposed it. In fact, would have welcomed it, if I understand.
MR. ROSENBAUM: I think he also testified he wouldn't have had standing to object.
MR. ROSENBAUM: Well we may be not sure, but that's what he testified to.
MR. BARKER: But the fact is, I think his testimony is he would have welcomed such a motion, is that right, Mr. Minix?
A.	I would rather her had the property than any of the creditors.
Deposition of M. Stephen Minix, June 8, 1992, filed July 23, 1992, at 87-88.
Title 11 U.S.C. § 362(b)(2) provides that the filing of a petition for relief under the Bankruptcy Code does not operate as a stay of the collection of alimony, maintenance, or support from property that is not property of the estate. The future earnings of the chapter 7 debtor from his profession as an optometrist are not property of the estate. 11 U.S.C. § 541(a)(6). Consequently it was and is perfectly proper for the Johnson Circuit Court to enter orders fixing maintenance and support payments to be made by the debtor out of his future earnings.
When, as in this instance, a marriage dissolution proceeding is pending when bankruptcy intervenes, the automatic stay bars the nondebtor spouse from seeking an allocation or division of marital property or enforcement of a property settlement agreement affecting the debtor's interest in property that upon the filing of the bankruptcy petition became property of the estate. There is authority for the view that upon proper motion the bankruptcy court may grant relief from stay for the purpose of permitting a state court to determine the rights of the parties to a divorce action in property of the bankruptcy estate, provided the trustee in bankruptcy is permitted to intervene in the marital dissolution proceeding to protect the rights of creditors in the property. In re White, 851 F.2d 170, 174 (6th Cir. 1988). There was no such request for relief from stay in this case. Consequently, the decree of the Johnson Circuit Court to the extent that it purported to determine the interest of the defendant Sherry Minix in the debtor's interest in property of the estate is invalid. Easley v. Pettibone Michigan Corp., 990 F.2d 905 (6th Cir. 1993).
Since entry of that decree by the state court the bankruptcy estate's interest in the debtor's property has been liquidated. The debtor's interest in the residence of the parties, including the improvements thereon, the building in which the debtor conducted his business as an optometrist, and the equipment used in the business, were all found to be overencumbered. Events have demonstrated that the parties had built up no marital equity in these properties. Consequently, it would be inequitable to annul the automatic stay to permit to stand so much of the decree of the Johnson Circuit Court dated May 18, 1990 as determined the marital equity in real estate and Minix Optical to be $96,357.48 and awarded Sherry Minix the sum of $44,275.74 as her share of this alleged equity. The judgment lien which Sherry Minix filed to secure collection of this amount is likewise invalid.
The debtor has been granted a discharge in bankruptcy. The trustee in bankruptcy has disclaimed interest in the debtor's optical equipment and in the premises in which the debtor carries on his optometry practice. The trustee realized some recovery in this case from the sale of a piano and the shares of stock owned by the debtor in the Marcus Minix Land Development Corporation, which held disputed title to the building in which the debtor conducts his optometry practice. Nevertheless, no purpose would be served in terminating the automatic stay as to the estate to permit the state court to revisit the issue of division of marital property, an issue that is essentially moot.
That portion of the state court decree which orders the debtor to "pay all marital debts to the extent that any exists [sic] following their discharge in bankruptcy" is obviously not a determination as to which such debts, if any, are nondischargeable in bankruptcy. Nor can the dischargeability of any such debts be determined on the basis of the record before this court. The court has hereinabove determined that the debt of $44,275.74 to the defendant Sherry Minix does not exist. The court can only observe that as a debt arising from a division of property it is a type of debt that would be dischargeable in bankruptcy if it did exist.
The debtor protests too much with respect to alleged violations of the automatic stay by his former spouse, the defendant Sherry Minix, and her attorneys. The court agrees that the record in the proceedings in the state court substantiate the conclusion that such violations of the automatic stay as may have occurred were induced in large part by the conduct of the debtor and his attorneys. The court declines to find any of the defendants in contempt of this court. There is no evidence of willful violation of the automatic stay so as to entitle the debtor to damages under 11 U.S.C. § 362(h).
The motion of the plaintiff debtor for partial summary judgment striking the third and fourth defenses set forth in the answer of the Francis, Kazee and Francis defendants shall be overruled.
The cross-motion of the Francis, Kazee and Francis defendants for summary judgment dismissing the complaint as to them with prejudice shall be sustained.
Moreover, having granted to the plaintiff debtor the maximum relief available on the basis of the pleadings before the court, the court finds that the complaint insofar as it seeks a determination of the validity or dischargeability of debts other than the $44,275.74 debt, arising from the attempted division of marital property, shall be dismissed without prejudice to the right of the debtor to seek a determination of the dischargeability of any particular prepetition debt which a creditor may seek to collect from him.
Nothing in this opinion is intended to preclude the state court from considering as a factor in determining the amount of maintenance or support payments the debtor may be obligated to pay to Sherry Minix out of his future earnings the fact as events have demonstrated that there was no marital equity in the property of the debtor.
See also order of May 20, 1994 overruling motion of the plaintiff, pursuant to Rules 7052(b) and 9023 of the Federal Rules of Bankruptcy Procedure, requesting the court to alter or amend its order of april 6, 1994, and, following an evidentiary hearing, to make additional findngs of fact on the issue of whether the violations of the automataic stay by the defendants were willful.

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