Court Opinion

ID: 9746559
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:22:58.018712+00
Date Added: 2024-06-11T07:25:14.661965
License: Public Domain

ZAPPALA, Justice,
concurring.
Although I agree with the result reached by the majority, I do so for different reasons. Contrary to the majority’s analysis, I do not believe it is necessary to address whether the parties’ marriage constitutes a single transaction or occurrence for purposes of determining whether recoupment is warranted since I do not believe the common law doctrine of recoupment is applicable or available in the context of an equitable distribution proceeding. Clearly, the majority’s analysis is in response to the Superior Court’s opinion concluding that the parties’ marriage does constitute a single transaction or occurrence; however, I believe the Superior Court committed a fundamental error by applying the very narrow concept of recoupment outside the context of bankruptcy proceedings. Simply put, the way in which Superior Court applied recoupment was erroneous, but this error is overshadowed by the fact that the court should not have applied recoupment at all.
As noted by the majority, Cohen filed a voluntary petition pursuant to Chapter 7 of the United States Bankruptcy Code. He listed Goldberg as an unsecured non-priority creditor and Goldberg filed a proof of claim for the amounts owed to her *208pursuant to their loan agreements. Goldberg’s proof of claim was permitted, but she received no distribution when Cohen’s bankruptcy was discharged. Goldberg failed to object, before, during or after the discharge of Cohen’s debts. Thus, Cohen’s liability for these debts was extinguished by the bankruptcy court.
Although the common law doctrine of recoupment has been recognized within the context of bankruptcy proceedings, the doctrine is to be narrowly construed. See In re B & L Oil Co., 782 F.2d 155, 159 (10th Cir.1986); Electronic Metal Prod., Inc. v. Honeywell, Inc., 95 B.R. 768 (D.Colo.1989) (recoupment is an equitable doctrine, which one might expect to be broad; however, it should be narrowly construed.) Thus, the Superi- or Court’s application of this doctrine to equitable distribution proceedings, which arose after the bankruptcy proceedings were finalized, was an improper attempt to frustrate the discharge in bankruptcy. See In re Edwards, 91 B.R. 95, 96 (Bankr.C.D.Cal.1988) (the bankruptcy court refused to permit the state court to circumvent the effects of husband’s bankruptcy discharge by ordering husband to pay as support to wife debts that were previously discharged; courts cannot find a way to make a discharged debt in effect nondischargeable).
Based on the foregoing, I would reverse the Superior Court’s decision and order.
CASTILLE, J., joins this concurring opinion.