Japhet Ndukwe Nwosu

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
JAPHET NDUKWE NWOSU,
Debtor.
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Case No. 09-00321
(Chapter 7)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER RE MOTION TO
GRANT RELIEF FROM DISCHARGE, AND LIFT THE AUTOMATIC STAY
Alvin Sharples has a discharged claim against the debtor
Nwosu for injuries arising from a motor vehicle accident. 	He has
filed a motion in which he seeks relief from the debtor’s
discharge and a lifting of the automatic stay so that he can
proceed in a District of Columbia Superior Court action “to
obtain a judgment, the recovery of which will be limited to
Respondent's available liability insurance.” 1
1 	Sharples states that he “has already obtained a
settlement offer from [the debtor’s] liability insurance carrier
for the full amount of his available insurance on the date of the
accident, suggesting he possesses a high likelihood of success
with his claim.” 	Sharples does not explain why he cannot merely
accept that settlement offer, and avoid the necessity of
proceeding to obtain a judgment in the Superior Court. 	But I
will assume that the insurance carrier is conditioning its offer
on the litigation in the Superior Court being concluded by a
judgment.
The document below is hereby signed.
Signed: May 25, 2010.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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I
Although the debtor’s discharge gave rise to an injunction
against collection of the debt as a personal obligation of the
debtor, it is well established that pursuit of a claim against
the debtor in order to pursue collection on an insurance policy
does not run afoul of the discharge injunction. 	Houston v.
Edgeworth (In re Edgeworth), 993 F.2d 51, 54 (5th Cir. 1993);
Patronite v. Beeney (In re Beeney), 142 B.R. 360 (9th Cir. B.A.P.
1992). 	Although he casts his motion as seeking relief from the
discharge injunction, Sharples has relied upon In re Edgeworth,
and in effect asks the court to declare that the discharge
injunction will not apply. 	Such a request for declaratory relief
does not relate to a determination under Fed. R. Bankr. P.
7001(6) of the dischargeabilty of the debt owed to Sharples.
(Indeed, he concedes the claim was discharged.) 	Nor does it
relate to any other category of proceeding enumerated in Fed. R.
Bankr. P. 7001(1) through (8). 	Accordingly, the request does not
require an adversary proceeding by reason of Fed. R. Bankr. P.
7001(9). 	See In re Three Strokes Ltd. Partnership, 397 B.R. 804,
807 (Bankr. N.D. Tex. 2008).
II
The entry of the order granting the debtor a discharge
already terminated the automatic stay of 11 U.S.C. § 362(a) with
respect to suing the debtor. 	11 U.S.C. § 362(c)(2)(C).
2
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Accordingly, any request for relief from the automatic stay in
that regard is unnecessary and will not be granted.
Nevertheless, the automatic stay would still be in place
with respect to any property of the estate that remained such
despite the closing of the case. 	See 11 U.S.C. §§ 362(c)(1) and
554(c). 	Relief from the automatic stay would still be necessary
to pursue proceeds of the debtor’s insurance policy if they were
property of the estate.
Although insurance proceeds sometimes are treated as
property of the estate (for example, when the proceeds are
payable to the debtor), Sharples has not mentioned any facts that
would suggest that the proceeds of the insurance policy ever were
property of the estate. 	See In re Edgeworth, 993 F.2d at 55-56.
Nevertheless, his motion can be seen as seeking relief from the
automatic stay to pursue such insurance proceeds in the event
that they are property of the estate, without the necessity of
determining whether the proceeds are property of the estate. 	I
think that Sharples’ motion is unnecessary, but will nevertheless
grant the motion. 	Because holders of unsecured claims against
the debtor, in general, would not be entitled to pursue a claim
against the insurance proceeds (with only entities who suffered
injuries compensable under the liability insurance policy
entitled to recover proceeds under the insurance policy), cause
exists to grant relief from the automatic stay.
3
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III
In accordance with the foregoing, it is
ORDERED that it is declared that despite the debtor’s
discharge, Alvin Sharples is authorized to sue the debtor to
obtain a judgment for whatever debt the debtor owes him provided
that recovery on that judgment is limited to the debtor’s
available liability insurance. 	It is further
ORDERED that relief from the automatic stay is granted to
pursue recovery of the proceeds of the debtor’s liability
insurance in the event that such proceeds could be deemed to be
property of the estate. 	It is further
ORDERED that this case is closed anew.
[Signed and dated above.]
Copies to: Debtor; Debtor’s attorney; and Michael J. Johnson,
Esq.
4	O:\TEEL\Templates\Nwosu (Japhet Ndukwe) Mem Decsn & Order re Sharples Mtn.wpd
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