Opinion ID: 1140801
Heading Depth: 1
Heading Rank: 4

Heading: Brooks's Bankruptcy

Text: On August 6, 2004, Brooks filed in Massachusetts a petition in bankruptcy under Chapter 7 of the United States Bankruptcy Code, listing within the Statement of Financial Affairs section of his petition Group 8760's pending action against him. The filing of the petition effected a stay of the action. See 11 U.S.C. § 362(a)(1). Pursuant to 11 U.S.C. § 362(f), Group 8760 filed an emergency motion seeking relief from the stay. Thereafter Group 8760 and the trustee in bankruptcy, on behalf of Brooks as the debtor, entered into a stipulation, to be effective upon approval by the bankruptcy court, whereby the stay would be lifted for the purpose of allowing Group 8760 to prosecute the Alabama Litigation in Jefferson County through the trial, and any appellate proceedings that may be necessary or desirable, or to a settlement or other resolutions, so that Group 8760 may fully adjudicate its claims in such proceedings against Debtor, thereby liquidating its claims against Debtor and his estate. The parties also stipulated that Group 8760 would seek to collect on any monetary judgment it might recover against Brooks only through the bankruptcy court. On September 2, 2004, the bankruptcy court entered an order approving the stipulations and lifting the stay. On February 2, 2005, the bankruptcy court granted Brooks a discharge pursuant to 11 U.S.C. § 727. As noted, trial of the case underlying these appeals was then underway. On February 7, as his last procedural act before resting his side of the case, Brooks offered for admission into evidence a copy of the discharge order. The trial court denied the admission of the exhibit on the ground of relevance. Brooks made no offer of proof concerning what relevance the discharge order might have to the issues to be submitted to the jury. Further, at no time did Brooks move to amend his answer to assert as an affirmative defense his discharge in bankruptcy. Although Brooks moved for a judgment as a matter of law at the close of Group 8760's case and again at the close of all the evidence, he did not on either occasion state as a ground for the motion the fact of his discharge from bankruptcy. (After the trial court entered judgments on the jury verdicts, Brooks filed his Motion for Judgment Notwithstanding the Verdict, [2] reasserting previous grounds but also arguing for the first time that because of his discharge by the bankruptcy court, the entry of a judgment against him was not permitted). When the trial court subsequently denied that motion, it made no mention of the bankruptcy-discharge issue. On appeal Brooks states the issue as: Whether the trial court committed error by refusing to admit into evidence a copy of Brooks's discharge from bankruptcy and whether the trial court had authority to enter judgment against Brooks because Group 8760's claims against him had been discharged in bankruptcy, thereby necessitating a judgment for Brooks. (Brooks's principal brief, p. 1.) Brooks goes on to argue: The discharge, once granted, replaces the automatic stay, acting as a permanent injunction against pursuing claims that were discharged. See 11 U.S.C. § 524(a)(2); In re Shell, 312 B.R. 431 (M.D.Ala.2004). Said discharge, according to 11 U.S.C. § 524(a)(2): `Operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived.' (Brooks's principal brief, p. 30.) Brooks argues that, consequently, [t]he trial court's refusal to admit evidence of the discharge was reversible error, as was the trial court's refusal to grant Brooks' Motion for Judgment Notwithstanding the Verdict following trial. Accordingly, this Court should reverse and render judgment on Brooks' behalf on all claims because his discharge from bankruptcy is a complete defense to 8760's claims. (Brooks's principal brief, p. 32.) In his reply brief, Brooks asserts that he seeks a determination of whether a copy of the discharge order is admissible to provide a basis for the affirmative defense of discharge from bankruptcy, which was already granted, arguing that he was entitled to prove that discharge and the trial court's failure to allow him to do so was reversible error. (Brooks's reply brief, pp. 16, 19.) Rule 8(c), Ala. R. Civ. P., governing affirmative defenses, requires that a party set forth affirmatively . . . discharge in bankruptcy. . . . Subject to exceptions not shown to be here applicable, the affirmative defense of a bankruptcy discharge is waived if not affirmatively pleaded in accordance with Rule 8(c). Blase v. Blase, 419 So.2d 599, 601 (Ala.Civ. App.1982); State of Alabama ex rel. State of Ohio v. E.B.M., 718 So.2d 669, 670-71 (Ala.1998). There is no error in refusing to admit evidence relevant only to an unpleaded affirmative defense. Moreover, so far as the record reveals, Brooks did not attempt to enlighten the judge as to what relevance he thought the discharge order might have in the case. Where the relevancy of evidence is not self-evident, the proponent of it must make an offer of proof explaining its relevancy in order to preserve error. Kilcrease v. John Deere Indus. Equip. Co., 663 So.2d 900 (Ala. 1995); Burkett v. American Gen. Fin., Inc., 607 So.2d 138 (Ala.1992); and Harbert v. Harbert, 721 So.2d 224 (Ala.Civ. App.1998). Where the evidence may be admissible for one purpose but inadmissible for another, the offeror must so specify in his offer in order to put the trial court in error. Town of Eclectic v. Mays, 547 So.2d 96 (Ala.1989), and Ensor v. Wilson, 519 So.2d 1244 (Ala.1987). Thus, also because he did not make an offer of proof, Brooks cannot show error in the exclusion of the proffered exhibit. See Davis v. Davis, 474 So.2d 654, 656 (Ala.1985); Charles W. Gamble, McElroy's Alabama Evidence § 425.01(4) (5th ed.1996). As noted, Brooks's second argument relating to his discharge in bankruptcy is that the trial court erred to reversal in refusing to grant his motion for judgment as a matter of law filed on March 11, 2005. The portion of that motion relating to Brooks's discharge in bankruptcy relied on the argument that the order of discharge superseded the order lifting the stay and consequently operated pursuant to 12 U.S.C. § 524(a)(2) as an injunction against further prosecution of the claims against Brooks. In the motion, Brooks contended that a jury verdict against Brooks was all that Group 8760 was entitled to, and the subsequent entry of judgment against him therefore exceeded the relief authorized by the order lifting the stay, so that judgment cannot be entered. By the time Brooks's motion for a judgment as a matter of law was filed, however, judgment had in fact already been entered without prior objection by Brooks. He argued in his motion that violation of the injunction against further prosecution of the action following his discharge in bankruptcy could result in appropriate redress by Mr. Brooks before the Bankruptcy Court pursuant to the Bankruptcy Code. As noted, the bankruptcy court had approved the stipulation that Group 8760 could prosecute its action against Brooks through the trial, and any appellate proceeding that may be deemed necessary or desirable, and Brooks cites no specific authority in support of his contention that his discharge in bankruptcy, although presumably superseding the automatic stay, also vitiated entirely the order lifting the stay, including the court-approved stipulation. Consequently, Brooks has not shown error on the part of the trial court in denying that aspect of his motion for a judgment as a matter of law. The bankruptcy court is the proper forum for further consideration of the effect of Brooks's discharge in bankruptcy on any judgment entered against him.