Court Opinion

ID: 3037255
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:56:01.946535+00
Date Added: 2024-06-11T11:40:56.206477
License: Public Domain

United States Bankruptcy Appellate Panel
                             FOR THE EIGHTH CIRCUIT
                                  _____________
                                 No. 05-6001 NE
                                 _____________

In re: Mark Henry Foss,                 *
                                        *
      Debtor.                           *
                                        *
Mark Henry Foss,                        *   Appeal from the United States
                                        *   Bankruptcy Court for the District of
      Plaintiff-Appellant,              *   Nebraska
                                        *
v.                                      *
                                        *
Hall County Child Support Office,       *
                                        *
      Defendant - Appellee.             *

                                 _____________

                              Submitted: May 9, 2005
                               Filed: May 31, 2005
                                 _____________

Before, DREHER, FEDERMAN, and VENTERS, Bankruptcy Judges.
                         _____________

PER CURIAM.

       Debtor, Mark Henry Foss, filed an adversary proceeding seeking a
determination that his child support obligations were dischargeable. The bankruptcy
court1 granted a motion to dismiss, which had been filed by defendant, the Hall

1
 The Honorable Timothy J. Mahoney, Chief Judge, United States Bankruptcy Court
for the District of Nebraska.
County Child Support Office (Hall County). Mr. Foss appeals that dismissal. We
affirm.

                            FACTUAL BACKGROUND

       Mr. Foss has been found to be the father of two children born of Paula Shultz.
One child was born in 1991, and one child was born in 1999. The State of Nebraska
has provided support to the children in the form of Aid to Dependent Children and
Medicaid. The State brought suit against Mr. Foss to determine paternity and to
establish the amount of support Mr. Foss must pay. On March 4, 2003, the District
Court Child Support Referee entered Findings and Recommendations modifying
previously-awarded child support, finding Mr. Foss was the father of the child born
in 1999, determining the amount of medical expenses still owed, and holding Mr.
Foss in contempt.2 Mr. Foss took exception to these findings, and the matter is now
pending before the District Court of Hall County, Nebraska.

       On July 2, 2004, Mr. Foss filed a Chapter 7 bankruptcy petition, and on
September 13, 2004, he filed an adversary proceeding. In his adversary proceeding
he alleged that the State of Nebraska’s child support guidelines fail to determine an
economically-appropriate award, therefore, they violate federal law and the United
States Constitution. He also alleged that awards made payable to child support
enforcement agencies are dischargeable in bankruptcy. On September 30, 2004, Hall
County filed a motion to dismiss. The county argued that Mr. Foss’ claims are barred
by the Rooker-Feldman Doctrine, that Mr. Foss failed to name all proper party
defendants, that Mr. Foss failed to state a cause of action for which relief could be
granted in federal court, and that these claims are for child support, and are, therefore,
nondischargeable. On November 19, 2004, the court held a hearing. On January 18,

2
 Appellant’s Appendix, pg. 36.
                                            2
2005, the court entered an order granting Hall County’s motion. Mr. Foss appeals that
order.

                             STANDARD OF REVIEW

      A bankruptcy appellate panel shall not set aside findings of fact unless clearly
erroneous, giving due regard to the opportunity of the bankruptcy court to judge the
credibility of the witnesses.3 We review the legal conclusions of the bankruptcy court
de novo.4 In reviewing an order granting a motion to dismiss we must accept all well-
plead facts as true and draw all reasonable inferences in favor of the appellant.5 We
review conclusions of law de novo.6

                                    DISCUSSION

        As a preliminary matter, Hall County requested an extension of time in which
to file its brief because the attorney who represented Hall County in the bankruptcy
court had resigned. Such brief was due on April 5, 2005.The newly-assigned attorney,
through an inter-office routing error, did not receive the appellant’s brief until March
31, 2005. Mr. Foss objected to Hall County’s request for an extension of time. We

3
 Gourley v. Usery (In re Usery), 123 F.3d 1089, 1093 (8th Cir. 1997); O'Neal v.
Southwest Mo. Bank (In re Broadview Lumber Co., Inc.), 118 F.3d 1246, 1250 (8th
Cir. 1997) (citing First Nat'l Bank of Olathe, Kansas v. Pontow, 111 F.3d 604, 609
(8th Cir.1997)). Fed. R. Bankr. P. 8013.

First Nat’l Bank of Olathe, Kansas v. Pontow (In re Pontow), 111 F.3d 604, 609 (8th
4

Cir. 1997); Sholdan v. Dietz (In re Sholdan), 108 F.3d 886, 888 (8th Cir. 1997).
5
 Roumeliotis v. Popa (In re Popa), 214 B.R. 416, 418 (B.A.P. 1st Cir. 1997).
6
 Rose v. U.S. Dept. of Ed., et al (In re Rose), 187 F.3d 926, 928 (8th Cir. 1999); Popa,
214 B.R. at 418.
                                           3
overrule that objection and will, therefore, consider Hall County’s brief, which was
filed on April 20, 2005.

        The bankruptcy court found that the Rooker-Feldman Doctrine prohibits lower
federal courts from reviewing state court decisions. The Rooker-Feldman doctrine is
a jurisdictional rule that applies to final judgments or orders, not to pending litigation
in state courts.7 While the District Court Child Support Referee entered Findings and
Recommendations, the District Court had not entered an Order as to those Findings
and Recommendations prior to July 2, 2004, when Mr. Foss filed this bankruptcy
petition. Therefore, it would appear that the Rooker-Feldman Doctrine would not
apply. However, the bankruptcy court also found that this matter should be dismissed
because there is currently pending in the District Court of Hall County, Nebraska
litigation with regard to each and every concern raised by Mr. Foss in this adversary
proceeding. We concur that abstention is appropriate and we affirm on that basis.

        Congress confers jurisdiction on the district courts by virtue of 28 U.S.C. §
1334:

        (a) Except as provided in subsection (b) of this section, the district
        courts shall have original and exclusive jurisdiction of all cases under
        title 11.8

That jurisdiction is not, however, exclusive:

        (b) Notwithstanding any Act of Congress that confers exclusive
        jurisdiction on a court or courts other than the district courts, the district
        courts shall have original but not exclusive jurisdiction of all civil

7
 Goetzman v. Agribank (In re Goetzman), 91 F.3d 1173, 1177 (8th Cir. 1996).
8
 28 U.S.C. § 1334(a).
                                              4
          proceedings arising under title 11, or arising in or related to cases under
          title 11.9

The district courts are authorized to refer all civil proceedings arising under title 11,
or arising in or related to cases under title 11, to the bankruptcy courts.10 Congress,
however, provided that the bankruptcy court, after the referral, could abstain from
exercising its jurisdiction if either justice or comity required such abstention:

          (c)(1) Nothing is this section prevents a district court in the interest of
          justice, or in the interest of comity with State courts or respect for State
          law, from abstaining from hearing a particular proceeding arising in or
          related to cases under title 11.11

The issues presented here are either related to the bankruptcy case, or arise in the
bankruptcy case. The bankruptcy court, therefore, had jurisdiction to decide the
issues. But, the court, likewise, had discretion to abstain in the interest of comity with
State courts or out of respect for state law.12 “‘Congress wisely chose a broad
jurisdictional grant and a broad abstention doctrine over a narrower jurisdictional
grant so that the district court could determine in each individual case whether
hearing it would promote or impair efficient and fair adjudication of bankruptcy

9
 Id. at §1334(b).
10
  28 U.S.C. § 157(a). See also Williams v. Citifinancial Mortgage Co. (In re
Williams), 256 B.R. 885, 891 (B.A.P. 8th Cir. 2000) (where we discussed the
framework of core, noncore, and related to proceedings).
11
     28 U.S.C. § 1334(c)(1).
12
     Luker v. Reeves (In re Reeves), 65 F.3d 670, 675 (8th Cir. 1995).
                                               5
cases.’”13 Courts have established certain factors to provide guidance when
considering abstention.14 We have identified these factors to include the following:

          (1) the effect or lack thereof on the efficient administration of the estate
          if a Court recommends abstention;
          (2) the extent to which state law issues predominate over bankruptcy
          issues;
          (3) the difficult or unsettled nature of the applicable law;
          (4) the presence of a related proceeding commenced in state court or
          other nonbankruptcy court;
          (5) the jurisdictional basis, if any, other than 28 U.S.C. S 1334;
          (6) the degree of relatedness or remoteness of the proceeding to the
          main bankruptcy case;
          (7) the substance rather than the form of an asserted core proceeding;
          (8) the feasibility of severing state law claims from core bankruptcy
          matters to allow judgments to be entered in state court with enforcement
          left to the bankruptcy court;
          (9) the burden [on] the bankruptcy court's docket;
          (10) the likelihood that the commencement of the proceeding involves
          forum shopping by one of the parties;
          (11) the existence of a right to a jury trial; and
          (12) the presence in the proceeding of nondebtor parties.15

The bankruptcy court correctly applied the relevant factors to the facts of this case
and determined it should be dismissed. Mr. Foss filed this bankruptcy case to avoid

13
     Id. (quoting In re Salem Mtg. Co., 783 F.2d 626, 635 (6th Cir. 1986)).
14
 In re Chicago, Milwaukee, St. Paul & Pacific Railroad Co., 6 F.3d 1184, 1189
(1993).
15
Will. v. Citifinancial Mortgage Co. (In re Williams), 256 B.R. 885, 893 (B.A.P.
 th
8 Cir. 2000). See also, In re Phelps Technologies, 238 B.R. 819, 821 (Bankr.W.D.
Mo.1999); Tarkio College v. Bower (In re Tarkio ) 137 B.R. 34, 36 (W.D. Mo.1992);
In re Tucson Estates, Inc. 912 F.2d 1162, 1166 (9th Cir.1990); In re Chicago,
Milwaukee, St. Paul & Pacific Railroad Co., 6 F.3d at 1189.
                                               6
further garnishment of his wages related to the child support determination. Domestic
issues related to paternity and child support are the exclusive province of state courts.
The District Court Child Support Referee has already entered Findings and
Recommendations, and Mr. Foss has taken exception to those recommendations. That
matter is now pending before the District Court. A federal bankruptcy court would
have no jurisdiction to consider either the constitutionality of state child support
statutes or the dischargeability of that obligation absent the filing of a bankruptcy
case. While Mr. Foss purportedly seeks a determination as to whether his child
support obligation is dischargeable, he also seeks to challenge the constitutionality
of the State of Nebraska’s entire system for providing support and medical care to its
children. Thus, the substance of his complaint is related to this state court procedure.
The bankruptcy court could have severed this adversary proceeding and abstained
as to the constitutionality of the state statutes. After the District Court made its ruling,
and Mr. Foss had exhausted all of his administrative remedies and appeals, he could
have returned to the bankruptcy court for a determination as to the dischargeability
of any remaining child support obligation. Such a procedure is not judicially
economic, however, when the District Court has concurrent jurisdiction to determine
the dischargeability of such obligation under § 523(a)(18) of the Bankruptcy Code.16
Finally, the bankruptcy court considered the fact that Ms. Shultz and the two children,
as well as Hall County, are represented in the pending state court litigation. For all
of these reasons, the bankruptcy court did not abuse its discretion when it dismissed
this case so as to allow it to proceed in the District Court of Hall County, Nebraska.
We, therefore, affirm the order of the bankruptcy court dismissing this adversary
proceeding.

                                  ________________

16
 11 U.S.C. § 523(a)(18); Grogan v. Garner, 498 U.S. 279, 284 n.10, 111 S. Ct. 654,
658 n.10, 112 L. Ed. 2d 755 (1991).
                                             7