Court Opinion

ID: 9847028
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:52:28.242102+00
Date Added: 2024-06-11T09:16:59.222187
License: Public Domain

Judge John
dissenting.
I respectfully dissent and vote to affirm the trial court in all respects.
Perlow, relied upon by the majority, has been criticized, see Daniel R. Cowans, Bankruptcy Law and Practice § 7.4, at 109 (6th ed. 1994) (“question of common ownership of what was not answered”), and see generally Elisabeth S. Petersen, Krista F. Norstog Leonard, Robert A. Ponton, Jr., L. Diane Tindall, & Christopher C. Fox, Bankruptcy and Equitable Distribution § VII, 65-96 (manuscript presented at Intensive Seminar: Advanced Problems in Equitable Distribution, 2-4 December 1993, N.C. Bar CLE), and is in any event distinguishable.
Assuming arguendo that an equitable distribution claim is dis-chargeable in bankruptcy, see Cowans and Petersen et al., supra, I find the case of Hoffman v. Hoffman, 157 B.R. 580 (E.D.N.C. 1992), more persuasive. In Hoffman, wife was served with a copy of husband’s Notice of Chapter 11 bankruptcy filing, the meeting of creditors under 11 U.S.C. § 341, as well as the bankruptcy court’s order setting a bar date for proofs of claim. Id. at 582. Husband listed the parties’ pending divorce action as a “chose in action” upon his declaration of assets schedule, although no value was assigned, and, while not listing wife as a creditor, “place [d] her name and address on the original mailing matrix.” Id. Husband appealed the bankruptcy court’s determination that wife’s equitable distribution claim, filed subsequent to the bankruptcy court’s confirmation of husband’s Chapter 11 plan, had not been discharged.
The District Court affirmed the ruling of the bankruptcy court, noting that
*743[husband] failed to list [wife] as a creditor or to otherwise alert her to the fact that her equitable distribution rights were pending in the bankruptcy.
Id. at 583. Later, the Court reiterated,
[although [wife] had actual notice of the bankruptcy proceeding, she had no notice that her marital claims against the [husband] were at issue.
Id. at 584. The Court observed that wife’s presence “was necessary as a co-owner in the properties being sold to pay the claims,” id., and that
[husband] could have elected to invoke the jurisdiction of the Bankruptcy court to determine the marital property rights of [wife], but he elected not to do so.

Id.

In addition, the Court approved the bankruptcy court’s determination that Perlow was distinguishable
in that the debtor in Perlow specifically listed Ms. Perlow as an unsecured creditor with priority, noting that the claim was “contingent, disputed, unliquidated, Division of Marital Property.” In addition, the Perlow debtor filed a notice with the Bankruptcy Court with service upon Ms. Perlow stating “all matters of equitable distribution will be requested to be completed by the Bankruptcy Court” and that “it is the contention of the plaintiff that upon the determination of equitable distribution by the Bankruptcy Court that all matters concerning distribution of property in this action should be dismissed.”
Id. at 583.
Similarly, in the case sub judice, while plaintiff “had actual notice of the bankruptcy proceeding,” id. at 584, he was listed on defendant’s petition as a general unsecured creditor only regarding “disputed claims for marital debts” in the amount of $4,000. This listing, referring solely to “marital debts,” in no way gave plaintiff “notice that [his] marital claims against the [defendant] were at issue.” Id. at 584. Plaintiff, like the wife in Hoffman, “was not aware that [his] marital rights were being extinguished.” Id. Accordingly, the trial court properly proceeded to hear his equitable distribution claim.