Court Opinion

ID: 9689455
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:33:30.681238+00
Date Added: 2024-06-11T18:18:48.360467
License: Public Domain

HUGHES, Bankruptcy Judge,
dissenting:
I dissent.
My principal quarrel with the majority opinion concerns what I perceive to be its futility. In purporting to determine that Mrs. Wymer has no claim against Mr. Wymer it (1) ignores the reality of the state court judgment in her favor and (2) fails to reach the dischargeability question raised by this appeal. In failing to decide the dischargeability question, it has decided nothing.
As I see it, we can meet the needs of the parties only if we assume for purposes of reaching the dischargeability issue that Mrs. Wymer has a claim. Whether Mrs. Wymer in fact has a claim that is enforceable by the state court judgment must be left to the state court.
I
The order appealed was in three parts. The first part decreed “the debt ... in the amount of $8,146.05 ... to be nondis-chargeable.” The second part ordered that Mrs. Wymer have judgment for $8,146.05 against Mr. Wymer. The third part ordered “the automatic stay granted by 11 U.S.C. 362 dissolved as to the debt owed Rhonda B., Wymer resulting from action number EAD 34766 in the Superior Court of Los Angeles County, California.”
Appellant stated in his notice of appeal that he appealed “from the judgment ... finding the debt owed to plaintiff to be nondischargeable. ”
*507Appellant prayed in his opening brief on appeal for this panel to reverse and to “find that the proof of the assignment of the obligation owed to Rhonda B. Wymer was sufficient to make the claim dischargeable under Section 523(a)(5)(A)...”
Granting judgment for a debt that was already the subject of a state court judgment was unnecessary and unwarranted. In re Leek, 427 P.Supp. 1 (E.D.Mo.1975). Although the part of the order was not specifically appealed, it should be vacated.
Nevertheless, it is apparent that the true import of the trial court order was its (1) determination that the child support debt evidenced by the state court judgment was nondischargeable and its (2) dissolution of the automatic stay of enforcement of the state court judgment, particularly the latter.
The thrust of the appeal is to overcome the trial court holding of nondischargeability and to replace it with a dischargeability determination, relying on a reading of 11 U.S.C. § 523(a)(5)(A). I therefore see the question presented by this appeal as follows:
Does an otherwise nondischargeable judgment for child support become dis-chargeable as to the child or the custodial parent if, through assignment, the state has acquired rights in the judgment?
The majority avoids answering this question by finding there is no debt owing by Mr. Wymer to Mrs. Wymer.
It holds that “Since ... we have determined that the appellee has no claim against the appellant for any sums due for child support prior to October 31, 1979, the judgment will be reversed on those grounds and we need not discuss the issue of dis-chargeability under § 523(a)(5)(A).”
I agree there is no need to determine the dischargeability of a debt that does not exist. I disagree that the question presented by the parties can, or should be, avoided. In my view, even if the majority decision is correct as a matter of law it is without legal effect because it cannot be imposed on the California superior court. Further, as I read the record, the state court has already decided the question contrary to the majority-
II
The state court has already ruled on the question addressed by the majority, holding that in spite of the assignment Mrs. Wymer could enforce the judgment. This occurred when, shortly before bankruptcy, appellant moved the state court to quash its writ of execution. Presented with the same argument the majority finds persuasive, the state court denied the motion.
The majority declines to consider the effect of that ruling, however, on grounds that the “res judicata issue was never properly raised” in the trial court. (Conceding that the issue was raised in appellee’s original complaint, the majority observes that áppellee “subsequently filed an Amendment to Complaint which superseded the original complaint on file. It was this amended complaint which was answered and which formed the basis of the trial in this matter.” In fact, the original complaint to determine dischargeability was the basis of the trial. If the original complaint to determine dis-chargeability were superseded, the appeal would be confined to whether the levy of the writ of execution constituted a preference under 11 U.S.C. § 547. That is the only issue addressed in the Amendment to Complaint).
In itself, the majority’s reluctance to consider the effect of the state court’s ruling is harmless. What is far from harmless is its reluctance to consider the effect of the underlying state court judgment.
III
The state court child support judgment was entered in 1974 and, so far as the record on appeal shows, remains unmodified today except to the extent it is affected by appellant’s bankruptcy. Neither the appellant or the majority suggest that the judgment is deficient for lack or excess of jurisdiction, or on due process grounds. Indeed, the majority suggests no grounds whatever *508for purporting to define the extent of Mrs. Wymer’s rights under the California judgment.
The bankruptcy court, as other federal courts, is bound to give full faith and credit to state court judgments. 28 U.S.C. § 1738. Scott Publishing Co. v. Rodgers, 229 F.2d 956 (9th Cir. 1956). It is not free to modify or ignore such judgments except as authorized by statute. There is only one such statutory basis for the bankruptcy court to affect a state court judgment that I am aware of.
That authorization flows from the order of discharge, 11 U.S.C. § 727, and the power to enforce the order of discharge, 11 U.S.C. § 524. The bankruptcy court may declare a state court judgment void, if it is discharged. 11 U.S.C. § 524(a)(1). It may enjoin enforcement of a state court judgment, if it is discharged. 11 U.S.C. § 524(a)(2), There is no authority for a bankruptcy court to void or enjoin a state court judgment on other grounds, such as those relied on by the majority.
If the bankruptcy court is to have any power to affect enforcement of the state court judgment by appellee it must first find the debt discharged. In order to determine whether or not it is discharged, it must at least be assumed that appellee has a claim against appellant.
IV
I do not know what will occur in this case on remand. The majority directs the trial judge to enter judgment for appellant “in conformity with this opinion.” I take it this could be a judgment holding that nothing is due, but it might take other forms. It could not, however, conform to the majority opinion and also give appellant the relief he sought in his appeal, namely a determination that “the obligation owed to Rhonda B. Wymer” is discharged.
Once appellant’s discharge has been granted, appellee will no longer be constrained by the automatic stay from enforcing her state court judgment. 11 U.S.C. § 362(c)(1)(C). Inasmuch as the discharge voids and enjoins enforcement only of discharged judgments, appellant will need a judicial determination that the judgment is discharged if he is to invoke 11 U.S.C. § 524(a)(1) and (2).
It .is therefore possible, perhaps likely, that the parties will obtain an answer to their federal dischargeability question from the state court the next time Mr. Wymer moves the Superior Court of Los Angeles County to quash Mrs. Wymer’s writ of execution.
I would think that the interests of the parties and of judicial administration are better served by accepting the fact of the state court judgment in Mrs. Wymer’s favor, leaving to the state court the question decided by the majority and disposing of the dischargeability question in the bankruptcy court.