Clark v. Caldwell

MEMORANDUM OF DECISION - 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF IDAHO
______________________________________________________
In Re:
Bankruptcy Case
KENNETH L. CALDWELL, No. 02-41931
Debtor.
______________________________________________________
LINDSEY M. CLARK,
Plaintiff, Adv. Proceeding
No. 04-6124
vs.
KENNETH L. CALDWELL,
Defendant.
______________________________________________________
MEMORANDUM OF DECISION
______________________________________________________
Appearances:
Lindsey M. Clark, pro se Plaintiff (appeared telephonically).
Kenneth L. Caldwell, pro se Defendant (appeared in person).
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1 Handicapped by their lack of legal representation, neither party offered any
evidence to support their positions. However, most of the critical facts either appear of
record in the Court’s files, or are undisputed. To the extent necessary and appropriate,
the Court takes judicial notice of it files in this adversary proceeding and in Defendant’s
bankruptcy case, Case No. 02-41931. Fed. R. Evid. 201. The Court gleaned the
remainder of the facts recited in this Memorandum from the parties’representations at the
hearing.
MEMORANDUM OF DECISION - 2
In an inartfully drawn motion, pro se Plaintiff Lindsey Clark requests,
in effect, that the Court issue an order garnishing approximately $5,400 in funds
belonging to pro se Defendant Kenneth Caldwell that are held by a title company,
in partial satisfaction of a money judgment Plaintiff holds against Defendant, issued
by this Court. The Court conducted a hearing on Plaintiff’s motion on May 18.
Defendant appeared in person at the hearing, and Plaintiff appeared via telephone.
This Memorandum of Decision is the Court’s findings of fact, conclusions of law,
and disposition of the motion. Fed. R. Bankr. P. 7052.
BACKGROUND1
On February 8, 2005, after a trial in this adversary proceeding, the
Court entered a judgment declaring that certain debts owed by Defendant to
Plaintiff should be excepted from Defendant’s bankruptcy discharge under 11
U.S.C. § 523(a)(5). In addition, the Court entered a money judgment against
Defendant and in favor of Plaintiff for $17,069.35, plus applicable interest,
representing the amounts owed on the nondischargable debts. Docket No. 35.
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2 Defendant produced a copy of the check at the hearing; it was included as a part
of the record of the motion hearing without objection from either party.
MEMORANDUM OF DECISION - 3
This adversary proceeding was closed on March 1, 2005; Defendant’s
Chapter 7 bankruptcy case was closed on March 23, 2005. Without asking that the
adversary proceeding be reopened, Plaintiff filed a “Motion to Reissue Property
Check” and a notice of hearing on April 26, 2005. Docket Nos. 37, 38.
Plaintiff and Defendant were formerly married. At the hearing on
Plaintiff’s motion, the parties explained that although their divorce action has been
pending in state court since 1998, and that their marriage has been dissolved, their
marital property has not yet been divided by the state court.
On April 8, 2004, AmeriTitle, an Idaho Falls title company, issued a
check for $10,738 payable to both Plaintiff and Defendant.2 These funds represent
the excess proceeds from the sale of the parties’ former marital home at a
foreclosure sale. Plaintiff’s position is that she retained an undivided one-half
interest in the house. Defendant took no position on the nature of Plaintiff’s
ownership, but both agreed that the house was previously their marital home.
Defendant received the check from AmeriTitle, although it is not
clear exactly when. Concerned that doing nothing would somehow prejudice the
parties’ access to the funds, Defendant endorsed the check and submitted it for
deposit. However, the bank declined to honor the check because Plaintiff’s
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MEMORANDUM OF DECISION - 4
endorsement was missing; it returned the check to AmeriTitle in April 2005.
Minute Entry, Ex. A, Docket No. 39.
ARGUMENTS OF THE PARTIES
In her motion, Plaintiff requests that the Court direct AmeriTitle to
reissue the check in her name only, so that she may obtain her one-half of the
funds, and so that she can apply Defendant’s share of the funds to payment of her
unsatisfied money judgment. Defendant objects, arguing instead that Plaintiff’s
motion should not be granted because this adversary proceeding and his bankruptcy
case are closed.
Defendant also argues that he should retain all the funds, including
Plaintiff’s share, which he contends should be used to satisfy debts she owes him.
This argument fails for two reasons. First, Defendant did not attempt to prove any
facts that would support the existence of such a debt. Second, Defendant
unsuccessfully raised a similar claim in the adversary proceeding. Ans., Docket
No. 10. The Court is not inclined to consider this argument again, post-judgment,
in the context of Plaintiff’s attempt to collect on her judgment. To allow otherwise
would offend the preclusive (res judicata) effect of the Court’s judgment.
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MEMORANDUM OF DECISION - 5
DISCUSSION
1. Interpreting the parties’pleadings.
Generally speaking, bankruptcy courts have interpreted pro se parties’
filings liberally. In re Mango, 305 B.R. 762, 769 (Bankr. D.S.C. 2003); Baldridge
v. Cont’l Airlines Holdings, Inc. (In re Cont’l Airlines, Inc.), 257 B.R. 658, 661
(Bankr. D. Del. 2000). In this case, and even though Plaintiff has not expressly
requested it, the Court construes Plaintiff’s motion as a request for issuance of a
writ of garnishment directed to AmeriTitle.
2. This Court’s jurisdiction.
Bankruptcy courts are courts of limited jurisdiction. See 28 U.S.C. §
1334 (describing the limits of bankruptcy court jurisdiction). In other words, the
bankruptcy court may not be the appropriate forum within which to settle a legal
dispute, even when one of the parties to that dispute is or has been a debtor in a
case under the Bankruptcy Code.
Even so, this Court clearly possesses ancillary jurisdiction to enforce
the money judgment it entered against Defendant and in favor of Plaintiff in this
adversary proceeding. McCowan v. Fraley (In re McCowan), 296 B.R. 1, 2 (B.A.P.
9th Cir. 2003). But while the Court may entertain Plaintiff’s motion, as construed
above, it declines to serve as the forum to address Plaintiff’s allegations in the
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3 Plaintiff indicated that she also wished to garnish Defendant’s wages. However,
the record contains insufficient evidence for the Court to address such a request in any
meaningful way. Idaho law permits a judgment debtor’s wages to be garnished, Idaho
Code §§ 8-507–807D, but the statutes require Plaintiff to submit the prescribed forms and
paperwork to the Clerk to do so. In the Court’s opinion, Plaintiff would benefit from
retaining counsel.
MEMORANDUM OF DECISION - 6
motion that Defendant acted fraudulently in his dealings with the check from
AmeriTitle. Nor can the Court grant Plaintiff’s request that it advise her
concerning how best to collect her judgment against Defendant, as she asked at the
hearing.3
Defendant’s objection that Plaintiff’s motion is improper because
both his bankruptcy case and this adversary proceeding have been closed has been
considered and rejected by other courts. In McCowan, the Panel explained in detail
that “it is not relevant to the [jurisdictional] analysis whether the underlying
bankruptcy case has been closed.” 296 B.R. at 4. And in Segner v. Brosseau (In re
Offshore Fin. Corp.), 319 B.R. 845, 847–48 (Bankr. N.D. Tex. 2005), the court
noted that it could “consider a motion to enforce its judgment without reopening the
administratively closed adversary proceeding.” Defendant’s objection will
therefore be overruled.
3. Enforcing a federal money judgment.
Under the Federal Rules of Civil Procedure:
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4 To the Court, it seems that a less complicated and perhaps faster procedure for
collecting her judgment would be for Plaintiff to register her federal judgment with the
state courts, and then to utilize the judgment enforcement remedies under Idaho’s version
of the Uniform Enforcement of Foreign Judgments Act. See Idaho Code §§ 10-
1301–1308.
MEMORANDUM OF DECISION - 7
[The] process to enforce a judgment for the payment of
money shall be a writ of execution, unless the court
directs otherwise. The procedure on execution, in
proceedings supplementary to and in aid of a judgment,
and in proceedings on and in aid of execution shall be
in accordance with the practice and procedure of the
state in which the district court is held, existing at the
time the remedy is sought, except that any statute of the
United States governs to the extent that it is applicable.
In aid of the judgment or execution, the judgment
creditor or a successor in interest when that interest
appears of record, may obtain discovery from any
person, including the judgment debtor, in the manner
provided in these rules or in the manner provided by the
practice of the state in which the district court is held.
Fed. R. Civ. P. 69(a), incorporated by Fed. R. Bankr. P. 7069.
The Ninth Circuit Court of Appeals has held that this Rule essentially
allows a federal court to use any judgment enforcement procedure permitted by the
state in which the federal court sits.4 Cigna Prop. & Cas. Ins. Co. v. Polaris
Pictures Corp., 159 F.3d 412, 421 (9th Cir. 1998) (citing Peacock v. Thomas, 516
U.S. 349, 359 (1996)). A federal court may not need to comply strictly with the
state procedures, but substantial compliance is required. United States v. Harkins
Builders, Inc., 45 F.3d 830, 833 (4th Cir. 1995). And while the language of the
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MEMORANDUM OF DECISION - 8
Rule allows a court to permit the collection of a judgment through other means by
“directing otherwise,” the Ninth Circuit has interpreted this language narrowly. A
judgment creditor may use a procedure other than applicable state procedures only
when “established principles so warrant.” Hilao v. Estate of Marcos, 95 F.3d 848,
854 (9th Cir. 1996) (internal citations omitted). For example, when a writ of
execution would be an inadequate remedy, a judgment creditor may request other
relief. 13 James Wm. Moore et al., Moore’s Federal Practice ¶ 69.02 (3d ed.
2005).
In this case, Plaintiff may invoke the judgment enforcement
procedures authorized by Idaho law. Garnishment is one such procedure. Idaho
Code §§ 8-507–507D. Because garnishment, as a form of execution on
Defendant’s assets, is an adequate remedy, Plaintiff can not resort to remedies
beyond those authorized by Idaho law.
Plaintiff has sufficiently demonstrated the facts necessary for a writ
of garnishment to issue to AmeriTitle as to Defendant’s one-half share of the
$10,738 it holds. Ms. Clark has shown the Court that she is the plaintiff in this
adversary proceeding; is over the age of eighteen; the Court entered a judgment in
her favor against Defendant on February 8, 2005, in the amount of $17,069.35 plus
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5 For an example of the forms used in the Idaho courts, the Court has consulted,
and the parties may refer to “Application and Affidavit for Writ of Execution,” at
http://www.adaweb.net/adaweb.nsf/11aa9b915991b8c1872567380081a8d9/49f50808f974
0c3087256c0f005fd3e5/$FILE/Affidavit%20for%20Writ%20of%20Execution.pdf (Civil
Form provided by Ada County’s Court Assistance Office listing these requirements).
MEMORANDUM OF DECISION - 9
applicable interest; and Defendant has not satisfied this judgment.5 Although
Plaintiff has not quantified the amount of the interest that has accrued on the
judgment debt, a detail generally included in a garnishment request, the Court
considers the showing in support of her motion to comply substantially with Idaho
law.
CONCLUSION
Plaintiff’s motion, as construed by the Court, should be granted. The
Court will enter a separate Order directing AmeriTitle is issue a check payable to
Plaintiff only for her one-half share of the funds held by AmeriTitle, and directing
it to hold the remaining funds for thirty days. During this thirty-day period,
Plaintiff may pursue a garnishment of Defendant’s share of the funds. Any
proposed garnishment of Defendant’s share of the house sale proceeds must
substantially comply with Idaho law, despite Plaintiff’s choice to pursue collection
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6 Again, the Court is in no position to advise Plaintiff regarding the proper
procedure to accomplish a federal court garnishment. The parties may find useful
background information at http://www.usmarshals.gov/process/civil.htm (website for the
United States Marshal’s Service). Each party should consult with an attorney.
MEMORANDUM OF DECISION - 10
through the federal courts.6 If Plaintiff fails to effectively garnish the funds within
the thirty-day period, AmeriTitle may disburse these funds directly to Defendant.
Dated: June 8, 2005
Honorable Jim D. Pappas
United States Bankruptcy Judge
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