Opinion ID: 1938746
Heading Depth: 3
Heading Rank: 1

Heading: jurisdiction

Text: Under ordinary circumstances, confirmation of a plan of arrangement by the bankruptcy court in a chapter 11 case discharges the debtor from any debt that arose before the date of such confirmation. Id. § 1141(d)(1)(A). In addition, it discharges the debtor from a claim arising from rejection, ... of an executory contract or unexpired lease of the debtor that has not been assumed.... Id. §§ 1141(d)(1)(A), 502(g). Despite the broad sweep of a discharge in bankruptcy, eight classes of debts are excluded from its operation. See 11 U.S.C. § 35(a) (1976), [33] currently codified as amended at 11 U.S.C. § 523(a) (1988); George Washington Univ. v. Galdi, 475 A.2d 1130, 1133 (D.C.1984). Prior to 1970, once the bankruptcy court determined that the debtor was entitled to a discharge, issues of nondischargeability arising under § 35(a) typically were decided by state courts in the context of a creditor's action to enforce a prior judgment. Brown v. Felsen, 442 U.S. 127, 130, 99 S.Ct. 2205, 2208, 60 L.Ed.2d 767 (1979). In 1970, Congress amended the Act to add section 35(c), which vests exclusive jurisdiction in United States bankruptcy courts to determine whether a debt fell within three of those eight categories: liabilities for obtaining money by false pretenses or false representations, § 35(a)(2); claims arising from fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity, § 35(a)(4); and liabilities for willful and malicious injuries to the person or property of another, § 35(a)(8). Pub.L. No. 91-467, § 7, 84 Stat. 992, codified at 11 U.S.C. § 35(e) (1976), currently codified as amended at 11 U.S.C. § 523(c) (1988). Section 35(c) reflects a congressional determination that the bankruptcy court have exclusive jurisdiction over certain types of nondischargeability questions and concurrent jurisdiction with nonbankruptcy courts over others. In re Borbridge, 81 B.R. 332, 334 (Bankr.E.D.Pa.1988). Here, Holle invokes § 35(a)(3), which provides: (a) A discharge in bankruptcy shall release a bankrupt from all his provable debts, whether allowable in full or in part, except such as (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy[.] In contrast to the types of debts described above, the determination of dischargeability under this section is of the type over which the bankruptcy court has concurrent but not exclusive jurisdiction. In re McNeil, 13 B.R. 743, 747 (Bankr.S.D.N.Y. 1981) (emphasis added). The cases WMC cites are not to the contrary. [34] We conclude that a state court may determine dischargeability in a creditor's action on the debt when the nondischargeability claim rests on the debtor's failure to disclose a debt under 11 U.S.C. § 35(a)(3), and that the trial court therefore erred in concluding that Holle's claim was foreclosed by the discharge in bankruptcy. In re Coppi, 75 B.R. 81, 82 (Bankr.S.D.Iowa 1987). See also George Washington Univ. v. Galdi, supra, 475 A.2d at 1133; In re Barber Indus., 30 B.R. 382, 384 (Bankr.M.D.Fla. 1983).