Court Opinion

ID: 988818
Source: CourtListenerOpinion
Date Created: 2013-07-03 22:58:13.136691+00
Date Added: 2024-06-11T09:12:34.974293
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: CECIL CARL VARNEY,
Debtor.

CECIL CARL VARNEY,
                                                                    No. 94-2045
Plaintiff-Appellant,

v.

ANGELA LEA VARNEY,
Defendant-Appellee.

Appeal from the United States District Court
for the Southern District of West Virginia, at Huntington.
Charles H. Haden II, Chief District Judge.
(CA-93-513-3, BK-92-30056)

Submitted: February 20, 1996

Decided: March 28, 1996

Before NIEMEYER and WILLIAMS, Circuit Judges, and
BUTZNER, Senior Circuit Judge.

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Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Cecil Carl Varney, Appellant Pro Se. Jane Moran, Williamson, West
Virginia, for Appellee.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Cecil Carl Varney appeals from the district court's order affirming
the bankruptcy court's orders denying a jury trial and granting partial
default judgment for Angela Lea Varney in her adversary proceeding
and from the district court's order denying reconsideration. The
adversary proceeding sought a determination by the bankruptcy court
that a debt owed Angela from Cecil was not dischargeable in his
bankruptcy case. We affirm the district court's orders.

During the January 1990 state court divorce hearing between Cecil
and Angela Varney, Cecil agreed to pay "temporary alimony" of
$1000 per month and to continue to pay on "all of the debts of the
marriage," including mortgage payments, health insurance, and gro-
ceries. Cecil also agreed to pay up to $400 per month on Angela's
personal credit cards. The order incorporating this agreement pro-
vided for these payments during the pendency of the divorce proceed-
ing. Cecil made the agreed payments from February 1990 through
October 1990. Thereafter, he refused to make any payments to Angela
either for the agreed alimony or for the marital debts and credit card
expenses.

The final divorce decree between Cecil and Angela, entered Janu-
ary 1992, awarded Cecil permanent custody of their child and pro-
vided that Angela needed no alimony or maintenance. The decree
noted Cecil's failure to comply with his contractual agreement to pay
Angela $1000 per month for temporary alimony and $400 per month
for credit card debt. Angela was awarded a judgment of $11,000 for
the alimony in arrears, and $5200 for payments of the marital debts,
plus interest.

Cecil Varney filed a voluntary petition for Chapter 7 bankruptcy
relief in January 1992. Angela filed a proof of claim in Cecil's bank-

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ruptcy, seeking payment of the judgment entered in the divorce case.
She also filed an adversary proceeding to determine the dischargea-
bility of her claim in Cecil's bankruptcy case.

The bankruptcy court denied Cecil's request for a jury trial and
scheduled trial of the adversary proceeding for 2:30 p.m. on Novem-
ber 3, 1992. Trial was thrice rescheduled, first for 1:30 p.m. on Janu-
ary 4, 1993, then for 1:30 p.m. on February 1, 1993, and finally for
March 1, 1993, at 10:00 a.m.

On March 1, 1993, Angela and her counsel appeared for the trial
as scheduled. The bankruptcy judge was not present at that time
because of pressing matters in Charleston, and his law clerk attended
the hearing to advise the parties of the delay. When Cecil failed to
appear by 10:30 a.m., the law clerk contacted the judge, who, at
approximately 10:47 a.m., advised the clerk to instruct Angela's
counsel to prepare an order granting default judgment for Angela due
to Cecil's failure to appear for the scheduled trial.

The following day, Cecil filed a motion in opposition to default
judgment or, alternatively, a motion for relief from the judgment. He
explained that he had mistakenly noted the time for the March 1st
hearing as 1:30 p.m., the time the trial was twice previously sched-
uled. Cecil had also caused a subpoena to issue for his witness to
appear at 1:30 on that date. In an affidavit in support of his motion,
Cecil stated that on March 1, 1993, he arrived at the courthouse
between 10:15 and 10:30 a.m. He remained in the law library until
approximately 1:15 p.m., when he proceeded to the courtroom for the
trial which he believed was scheduled for 1:30. It was then that Cecil
discovered that the hearing was scheduled for 10:00 a.m.

At the hearing on Cecil's opposition to the default judgment or for
relief from judgment, the bankruptcy court noted that Cecil admitted
receiving the notice scheduling the hearing for 10:00 a.m. and that he
failed to present any evidence, other than his own testimony, to prove
that he was in the law library at the time of the hearing. The court also
noted that Angela and her counsel were present and ready to proceed
at the time of the trial. The court found that Cecil failed to show
excusable neglect for his failure to appear for the scheduled trial.
Based on factual findings in two state court proceedings that the debt

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to Angela was alimony and support, the bankruptcy court granted
default judgment for Angela on those claims and denied default judg-
ment on Angela's claims which were in the nature of a property set-
tlement.

The district court affirmed the action of the bankruptcy court and
denied Cecil's motion for a rehearing. Cecil appealed to this court
arguing that the agreed payments were not alimony or support and
that he was entitled to a jury trial on the issue. Angela Varney's coun-
sel moved to withdraw as counsel and informed the court that Angela
wished to proceed with the appeal pro se. Angela also moved to sub-
mit the case on the briefs. We grant these motions.

The consensus in the courts which have addressed this issue is that
there is no constitutional right to a jury trial on the issue of dischar-
geability. Billing v. Ravin, Greenberg & Zackin, P.A., 22 F.3d. 1242
(3d Cir.), cert. denied, ___ U.S. #6D 6D6D#, 63 U.S.L.W. 3381 (U.S. Nov.
14, 1994) (No. 94-315); In re Maurice, 21 F.3d 767, 773 (7th Cir.
1994) (11 U.S.C.A. §§ 523(a)(2)(A) & (a)(6) (West 1993)); In re
McLaren, 3 F.3d 958, 960 (6th Cir. 1993); In re Hallahan, 936 F.2d
1496, 1505-06 (7th Cir. 1991) (11 U.S.C. § 523(a)(6) (1988)); In re
Hooper, 112 B.R. 1009, 1012 (Bankr. 9th Cir. 1990).

We agree with these decisions that a proceeding by a creditor to
determine dischargeability is equitable in nature and that a debtor who
filed a voluntary bankruptcy petition has no right to a jury trial in
such a proceeding. See Hallahan, 936 F.2d at 1505-06. We therefore
affirm the district court order affirming the bankruptcy court's denial
of Cecil Varney's request for a jury trial on the issue of dischargea-
bility of his debt to Angela.

We review default judgments and denials of relief from default
judgments for abuse of discretion. Augusta Fiberglass Coatings, Inc.
v. Fodor Contracting Corp., 843 F.2d 808, 810 (4th Cir. 1988);
United States v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982). To obtain
relief under Fed. R. Civ. P. 60(b), the moving party must show that
his motion is timely, that he has a meritorious defense to the action,
and that the opposing party will not be unfairly prejudiced by having
the judgment set aside. The movant must also show that he satisfies
one of the grounds for relief set forth in Rule 60(b). McLawhorn v.

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John W. Daniel & Co., 924 F.2d 535, 538 (4th Cir. 1991); Compton
v. Alton S.S. Co., 608 F.2d 96, 102 (4th Cir. 1979).

Cecil's motion for relief from the default judgment was certainly
timely. Rule 60(b) provides that the motion be filed within a reason-
able time and, for relief based upon mistake, inadvertence, or excus-
able neglect, the motion must be made within one year. Fed. R. Civ.
P. 60(b). Cecil filed his motion the day after the bankruptcy court
directed Angela to prepare an order granting her default judgment.

Prejudice to the non-moving party is a closer question. The bank-
ruptcy court found that Angela would be prejudiced by setting aside
the order of default because she and her attorney had traveled to
attend the hearing at which Cecil did not appear. This inconvenienced
her and the court. While it is not clear that this constitutes prejudice,
see Augusta Fiberglass, 843 F.2d at 812 ("[W]e perceive no disad-
vantage . . . beyond that suffered by any party which loses a quick
victory."), in light of our consideration of the other factors governing
relief under Rule 60(b), we need not resolve this issue.

Cecil's basis for his request for relief from judgment is that he mis-
takenly believed that the 10:00 a.m. hearing had been scheduled for
1:30 p.m. One of the deciding factors in determining whether to grant
relief from a default judgment is the degree to which the moving party
is at fault. Cecil admitted that he personally received and read the
notice rescheduling the hearing for 10:00 a.m. on March 1st and that
he informed his secretaries of the change in the date but not the time.
Because Cecil was responsible for the default, he"must adequately
defend [his] conduct in order to show excusable neglect." Augusta
Fiberglass, 843 F.2d at 811. The bankruptcy court discredited Cecil's
excuse for his failure to appear and determined that his mistaken
belief that the hearing was scheduled for 1:30 p.m. did not constitute
excusable neglect. We cannot conclude that the bankruptcy court's
credibility determination was clearly erroneous or that the bankruptcy
court abused its discretion in finding no excusable neglect. See United
States v. Mitchell, 1 F.3d 235, 240 (4th Cir. 1993); Park Corp. v. Lex-
ington Ins. Co., 812 F.2d 894, 897 (4th Cir. 1987).

The key factor in this case in determining whether the district court
erred in affirming the bankruptcy court's denial of relief from the

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default judgment is whether Cecil has met his burden of showing that
he had a meritorious defense to Angela's claim that the debt to her
was nondischargeable. Section 523(a)(5) of the Bankruptcy Code
excepts from discharge any debt " . . . to a spouse, former spouse, or
child of the debtor, for alimony to, maintenance for, or support of
such child, in connection with a separation agreement, divorce decree
or other Order of a Court of record or property settlement agreement."
11 U.S.C.A. § 523(a)(5) (West 1993). The debt at issue arose from
Cecil's agreement to pay Angela $1000 per month as alimony and
$400 per month for credit card debts. This agreement was incorpo-
rated into an order labeling the payments as alimony and support. The
final divorce decree noted Cecil's failure to comply with his contrac-
tual agreement to pay Angela $1000 per month for temporary alimony
and $400 per month for credit card debt. The temporary nature of the
payments and the reference in the divorce decree to a contractual
agreement do not negate the parties' intent that the payments be ali-
mony and support payments. Further, we find no clear error in the dis-
trict court's affirmance of the bankruptcy court's findings that the
debt was for alimony and support. See Carolin Corp. v. Miller, 886
F.2d 693, 702 (4th Cir. 1989).

In conclusion, we grant Angela Varney's counsel's motion to with-
draw, grant Angela's motion to submit on briefs and affirm the dis-
trict court's order affirming the bankruptcy court's order granting
partial default judgment to Angela Varney in her adversary proceed-
ing objecting to the dischargeability of Cecil's debt to her as incorpo-
rated into the family law master's temporary order. Finding no abuse
of discretion, we also affirm the district court's order denying recon-
sideration. We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.

AFFIRMED

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