Francisco, Jr. v. Francisco

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Entered on Docket
Septaniiear(23, 20011

GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

; | FILED

° SEP 2.3 2011
3 UNITED STATES BANKRUPTCY COURT
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UNITED STATES BANKRUPTCY COURT
. FOR THE NORTHERN DISTRICT OF CALIFORNIA
11] In re Case No. 10-45897
12 |} ARLENE C. FRANCISCO, Chapter 7
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14 Debtor.

15 }/ALFRED T. FRANCISCO, JR., Adv. Proc. No. 10-4216
16 Plaintiff,
17 vs.

18 |} ARLEEN C. FRANCISCO,

19 Defendant.

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21 MEMORANDUM RE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
22 On April 29, 2011, the court held a hearing on Plaintiff's

23 }motion for summary judgment. Edward O. Lee appeared for Plaintiff.
24||/Linda J. Cox-Cooper appeared for Defendant.

25 The complaint reveals that this action involves two types of
26|/claims: that Debtor should be denied a discharge in bankruptcy; and
27}|that Debtor’s obligation to Plaintiff should be excepted from any

28 |}discharge that Debtor might receive. The denial-of-discharge

MEMORANDUM RE PLAINTIFF'S
MOTION FOR SUMMARY JUDGMENT -1-

rs 11-03066 Doc#43 Filed: 09/23/11 Entered: 11/02/11 11:38:32 Page 1 of 3

INFORMATION
GPO

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claims are contested. The exception-from-discharge claims are not
contested, as explained below.

Plaintiff and Defendant were husband and wife, and are
currently involved in a marital dissolution proceeding in state
court. The state court has ordered the marriage dissolved, but has
not yet resolved all issues regarding support and division of
marital property and debts. The basis for the exception-to-
discharge claims is that Defendant mishandled and/or
misappropriated marital property. Any such claims can and should
be resolved and liquidated in the pending state-court dissolution
proceedings, and this court will defer to the state court with
respect to the resolution of all such claims.

Defendant’s counsel acknowledges that any order that the state
court may issue against Defendant regarding either support or the
division of property or debt, including any award for the
mishandling and/or misappropriation of marital property, would be
categorically excepted from discharge under sections 523(a) (5) and
523(a) (15) of the Bankruptcy Code. Plaintiff asserts no pre-
petition claims against Defendant that will not be resolved in the
dissolution proceedings. Plaintiff has already obtained an order
granting relief from stay to permit the state-court dissolution
action to proceed. Thus, to assert all of his pre-petition claims
against Defendant, the only relief Plaintiff needs from this court
is a declaratory judgment stating that any award by the state court
in the dissolution proceeding regarding marital property, marital

debts, or support is excepted from discharge.+ At the April 29,

* Judge Newsome’s August 17, 2010 order, which granted relief
from stay to permit the state-court dissolution action to proceed,
denied Plaintiff’s motion to have this court abstain regarding the

MEMORANDUM RE PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT -2-

Cage: 11-03066 Doc# 43 Filed: 09/23/11 Entered: 11/02/11 11:38:32 Page 2of3

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2011 hearing, counsel for Defendant expressly agreed to entry of
such a judgment.

In this setting, Plaintiff has no pecuniary interest in
pursuing the denial-of-discharge claims.” The court will therefore
direct immediate entry of judgment on the exception-from-discharge
claims, stay the proceedings regarding denial of discharge, provide
creditors and the United States Trustee an opportunity to intervene
and take over the denial-of-discharge claims, and dismiss those

claims if none of those parties moves to intervene.

123-1 |

Date Honorable Thomas E. Carlson

dissolution proceeding. The denial of the motion for abstention
does not constitute any limit on the relief from stay granted.
Judge Newsome, who recently retired from this court, most likely
determined that the motion for abstention was duplicative and moot
in light of the complete relief from stay awarded. To eliminate
any confusion, this court hereby clarifies for the benefit of
Plaintiff, Defendant, and the state court that the prior order for
relief from stay, together with the judgement accompanying this
memorandum, authorize the state court to enter and to enforce
whatever orders it determines to be appropriate in the dissolution
proceeding.

2 It is actually in Plaintiff’s pecuniary interest that Debtor
receive a discharge of debts owed other creditors, as Plaintiff
then would not have to compete with those creditors to collect
whatever judgment Plaintiff receives in the state-court dissolution
proceeding.

MEMORANDUM RE PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT -3-

Cage: 11-03066 Doc# 43 Filed: 09/23/11 Entered: 11/02/11 11:38:32 Page 3of3